Dr. Susmit Kumar
Immediately after the end of the war, Kuwait started economic warfare against Iraq. Kuwait had paid $30 billion to Iraq during that war, and after the war demanded it back. Iraq, however, had lost close to $80 billion. Eight years of warfare had made both Iran and Iraq short of the money needed to reconstruct their devastated economies, and they needed higher oil prices. The very day after Iraq agreed to a cease-fire with Iran, however, Kuwait drastically increased its oil production, violating OPEC agreements. Crude oil prices fell from $21 to $11 a barrel, costing Iraq $14 billion a year. Then Kuwait demanded a 50 percent increase in OPEC quotas, a demand that was rejected at the June 1989 OPEC meeting. Despite this, Kuwait doubled its oil production to over 2 million barrels per day. Kuwait had also been extracting oil from Iraqi territory using slant-drilling technology while Iraq was engaged in war with Iran. Rumors circulated that Kuwait was engaging in these tactics because of a U.S. plan to contain Saddam Hussein so that he could not get enough money to rebuild his army. Iraq tried to solve the issue with Kuwait diplomatically from 1989 to 1990. Both the Saudi and Jordanian kings also tried to intervene, but Kuwait refused to listen to their proposals. In a March 1990 OPEC meeting, new production quotas were set, but both Kuwait and the UAE refused to adhere to them, increasing their production. When in July 1990 Iraq amassed its troops near the Kuwait border, a Jordanian delegation, headed by King Hussein, went to Kuwait on a peace mission. The Kuwaitis were unconcerned, however, and Kuwaiti king Sheikh Sabah told the Jordanian delegation:
“We are not going to respond to [Iraq] … If they don’t like it, let them occupy our territory … we are going to bring in the Americans.”
U.S. ambassador April Glaspie met Saddam Hussein a few days ago before the Iraqi invasion of Kuwait in 1990. According to a declassified version of Glaspie’s cables about her meeting with Hussein, released at the Bush, Sr., library and placed online by the Margaret Thatcher Foundation:
“Saddam said … [about his] suspicions that the U.S. was not happy to see the [Iraq-Iran] War end… U.S.G [U.S. Government] maneuvers with the UAE will encourage the UAE and Kuwait to ignore conventional diplomacy. ..Iraq suffered 100,000s of casualties and is now so poor that war orphan pensions will soon be cut; yet rich Kuwait will not accept OPEC discipline… Iraq is sick of war, but Kuwait has ignored diplomacy… U.S.G maneuvers with the UAE and Kuwait encouraged them in their ungenerous policies… If Iraq is publicly humiliated by the U.S.G, it will have no choice but to “respond,” however illogical and self-destructive that would prove…Iraq is in serious financial difficulties with $40 billion debts. Iraq, whose victory in the war against Iran made a historic difference to the Arab world and the West, needs a Marshall Plan. But you want the oil price down. The spearheads (for the U.S.G) have been Kuwait and the UAE… The U.S.G not force Iraq to the point of humiliation at which logic must be disregarded. .. Iraqis know what war is, want no more of it – “Do not push us to it; do not make it the only option left with which we can protect our dignity.” 
Ms. Glaspie then asked Saddam about the concentration of Iraqi troops near the Kuwait borders: “Is it not reasonable to for us to be concerned … that many units of the Republican guard have been sent to the [Kuwaiti] border? .. What are your intentions?”  The U.S. government has not yet declassified the full set of cables.
According to the New York Times version of this meeting, based on Iraqi documents, she said:
“We [the U.S.] have no opinion on the Arab-Arab conflicts, like your border disagreement with Kuwait. I was in the American Embassy in Kuwait during the late 60’s. The instruction we had during this period was that we should express no opinion on this issue and that the issue is not associated with America. James Baker [U.S. Secretary of State] has directed our official spokesmen to emphasize this instruction. … Frankly we can see only that you have deployed massive troops in the south. Normally that would not be any of our business. But when this happens in the context of what you said on your national day, then when we read the details in the two letters of the Foreign Minister, then we see the Iraqi point of view the measures taken by the UAE and Kuwait is, in the final analysis, parallel to military aggression against Iraq, then it is reasonable for me to be concerned. As for this reason, I received an instruction to ask you, in the spirit of friendship not in the spirit of confrontation regarding your intentions.”
The First Gulf War
Iraq invaded Kuwait on August 2, 1990, ending in the U.S.-led multinational forces’ liberation of Kuwait and the decimation of the Iraqi military. Iraq had also sent most of its fighter aircraft to its archenemy, Iran, to save them from destruction; Iran never returned them. Although the U.S. provided the bulk of the military force for this war, it proved profitable for the U.S. economy for years to come. Not only was 80 percent of about $61 billion in war costs paid for by allies like Saudi Arabia, Kuwait, the UAE, Germany, and Japan; following the war Saudi Arabia, the UAE, and Kuwait bought arms and ammunition worth more than $400 billion from Western countries, mainly the U.S. and the U.K. Moreover, prior to the war U.S. forces could only monitor the oil-rich Middle East region from ships at sea since its Middle East allies were reluctant to allow them to have permanent bases on their soil. The war changed all this and allowed the U.S. to establish permanent bases in countries like Saudi Arabia, the UAE, and Kuwait, who had become afraid of the evil Saddam Hussein.
Following the war, no-fly zones were established in north and south Iraq to protect minority Kurds and Shiites. These zones were monitored mainly by the U.S. and the U.K., although France participated in the beginning. The U.N. Security Council approved economic sanctions against Iraq until Iraq had destroyed its weapons of mass destruction, a demand that, according to weapons inspection teams from the U.S. and U.K., Iraq never fulfilled.
In 1991, President Bush had declared a preference for regime—not behavior—change. Robert Gates, his deputy national security advisor, said sanctions would remain as long as Saddam ruled Iraq. In 1994, Secretary of State Warren Christopher was asked whether U.S. support for general sanctions was aimed at deposing Saddam. He replied, “We want compliance with all the U.N. resolutions. And I don’t believe he can do that and stay in office.” Under these conditions, Saddam had no incentive to comply with the changes demanded of him.
In 1996, U.N. Ambassador Madeleine Albright was asked by a television correspondent about the U.S.-led economic sanctions against Iraq: “We have heard that half a million children have died. I mean, that is more children than died in Hiroshima. And, you know, is the price worth it?” To this Ambassador Albright responded, “I think that is a very hard choice, but the price, we think, the price is worth it.”
1 Hayes, Thomas, “Big Oilfield Is at the Heart of Iraq-Kuwait Dispute,” New York Times, September 3, 1990.
2 Schuler, Henry, “Congress Must Take a Hard Look at Iraq’s Charges Against Kuwait,” Los Angeles Times, December 2, 1990.
3 Emery, Michael, Open Magazine Pamphlet Series No. 9, 8 referenced in Clark, Ramsey, The Fire This Time, International Action Center, New York, 1994, p. 18.
4 Gulf War: U.S. Embassy Baghdad to Washington (Saddam’s message of friendship to George Bush) at Margaret Thatcher Foundation website at http://www.margaretthatcher.org/archive/displaydocument.asp?docid=110705
6 “Excerpts from Iraqi Document on Meeting with U.S. Envoy,” The New York Times International, September 23, 1990.
7 Mann, Michael, Incoherent Empire, Verso, London, UK, 2003, p. 221.