The Gulf War and Its Aftermath: First Reflections Author(s): Fred Halliday Source: International Affairs (Royal

Institute of International Affairs 1944-), Vol. 67, No. 2 (Apr., 1991), pp. 223-234 Published by: Blackwell Publishing on behalf of the Royal Institute of International Affairs Stable URL: http://www.jstor.org/stable/2620827 . Accessed: 05/08/2011 08:24
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The Gulf War and itsaftermath: first reflections

FRED

HALLIDAY

FredHalliday traces thereasons behind SaddamHussein'sinvasion of Kuwait in Augustiggo and drawsoutsomeof thepolitical and security consequences of the war and theceasefire for theGulfstates andforthe WeVstern allies. The crisisunleashedby Iraq's invasion of Kuwait must count not only as one of the major international postwarcrises,but as a unique occurrencein several If it bears comparisonin the level of conflict respects. with Korea and Vietnam and in drama with Cuba, it differs fromall of these in being the first major postwar crisisnot to have an overridingEast-West dimension. For the first time, one member of the United Nations has been not merelyinvaded, but completelyoccupied and annexedby another.With thiscame thedisplacement of hundredsof thousandsof people fromKuwait and Iraq, disruptionin the trade of two major oil producers,and worldwide economic and international financialuncertainty.The coalition of forces led by the United States in response to the invasion the 'Desert Shield' that became a 'Desert Storm' thendeployed a forceof well over halfa millionpersonnelin Arabia. The scale of the war can only be graspedby looking at it on various levels. The casualtylevel was farlower than in the major post-I945 wars (compare Korea with 4.5 million killed, Vietnam with over 2 million, Lebanon with 250,000, the Iran-Iraq War with 500,000 or more); but in terms of the mobilizationinvolved and weaponry used, thiswas, afterKorea, the greatest conflict since the Second World War. interstate The riseof new technologies thiswar at themilitary aside,what distinguished The first was the extremeasymmetry in level were threeothercharacteristics. casualties tens of thousandskilled on the Iraqi side, a few dozen on the side of the coalition.The precedents were thoseof pre-i9I4 colonial wars,in which superior technology and organization made metropolitan armies almost invulnerable and able to inflict terrible costson theiropponents.The infliction of casualtiesnorthof Kuwait fromthe 24 to the 26 Februarywas an inflated versionof the fatethatbefellthe Tibetan armyat the battleof Guru in March generalsand lamas alike,theylost700 dead I904: led intobattleby intransigent Force. The second as againsthalfa dozen wounded in theBritish Expeditionary
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FredHalliday distinguishing characteristic was the manner in which the war ended a decisivecalling of a halt by Bush, at a momentwhen in strictly military terms he could have pressedon to Baghdad. Here, the analogy thatpresenteditself, of an equally politicaldecision to halt when the road ahead lay clear, was the Chinese decision to stop its war with India in October I962. In both cases a Clausewitzian caution prevailed over militarymomentum. The third, and perhaps most dramatic distinguishing featureof this war was the ecological disaster which accompanied it, followingthe Iraqi decision to blow up the oil wells in Kuwait duringtheirretreat. This was not the first time thatwar had been accompanied by ecological destruction:the destructionof forestsand in the FirstWorld War, the impact of two nuclear bombs in the farmlands Second World War, and the widespreaduse of chemicaldefoliants in Vietnam were seriousenough. In thiscase, however,therewas no military purposein an unprecedentedly destructive action which did much to pollute the atmosphere across a wide area of West Asia. As a Middle East conflict it had threeunique features. First,it was the first conflict significant involvingthe armiesof Arab states.Second, the inter-Arab division was compounded by the fact that the whole of the Arab world, includingNorth Africa,was involved,and by implicationboth in the war and in any futurepeace process of the threenon-Arab statesof the region, Israel, Iran and Turkey, the lattertwo hithertoexcluded from inter-Arabpolitics. Third an insightobscured by the degree of anti-American sentiment found for a long time in the region this was the first time that US forceshave in in the region, the two much smallerinterventions major numbersintervened in Lebanon (of i958 and I982-4) excepted. For the Middle East there has been no comparable crisisinvolving both forcessince the FirstWorld War, which saw the regional and extra-regional of Britishand French collapse of the Ottoman Empire and the intervention forces, together with their Arab allies, in what became Iraq, Syria, and Palestine. Subsequent interventions-in the Second World War, Suez, the Britishwars in Oman are, by comparison,secondary.The differences and On theone hand, thiswar will not have comparisons are, however,instructive. thedegreeof impactthatfollowed theFirstWorld War, in thatthe map, in the sense of the statedivisions,of the region will not be significantly altered,nor of theregimes indeed should,in themajorityof thecases,thepoliticalcharacter in power. On theotherhand, thepastcontainsseveralwarningsforthepresent. Like Desert Storm,campaignsof theFirst War involved a mainlyexternalforce like the armed forcesof with some tokenArab politicalattachments: thelatter, some occupied countries in the Second War, forpoliticalnot military purposes. of the FirstWorld War was one of the maintenanceof Moreover, the history a disparatecoalition by means of public unitybut privatedivergenceof goals. Specifically,behind the goal of defeatingthe Turks, contradictory promises were made: the Sykes-Picot agreement, the Husayn-Macmahon correspondence,the Balfour Declaration. It does not requiremuch imagination(or to see that comparable and equally contradictory commitments have distrust)
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The Gulf War and itsaftermath been made to a varietyof actorsin thiswar, and thatthe politicalconsequences thereafter may equally arouse rancour and dismay. The coalition may have survivedthe war: it is less likely to survivethe peace. Three broad political lessons of wars would seem to be especially worth rememberingin this context. The first is that, in all wars, statesfightfor a varietyof goals and thesemay well change as the war progresses. The motives of thestates thatfoughtin theSecond World War were economic,strategic and ideological all at the same time: the same mixtureapplied now. The shifting of war aims is common, as the debates among the Allies about what to do with Germanyin both world wars indicated.Secondly,relations betweenalliesboth before and after wars are never easy, and there is always an element of competitionbetween them. The Arab participants in the coalition have their own variantagenda, as do thenon-Arabstates. Equally theUnited States,while seekingto rallythe maximum international supportin the West, may also be able to use its military predominancein the war and the postwar situationto exertleverage againstits allies,notablyJapan and Germany,and to argue that ordershould follow itspriorities. any new international Third,even when wars do not alterfrontiers, theydo bringabout greatstrains withincountries which of war produce politicaland ideological changes.As with may in theaftermath the I948, I967 and I973 Arab-Israeliwars, the impact of thiswar on the Arab world will only be visible yearsafterit has ended. Pan-Arab and Pan-Islamic sentiment did not produce the insurrection thatSaddam anticipated.Whether theseare reallyspentforcesor.whethertheyare capable of further impact on the region, cannot yet be assessed. These general considerationsshould be enough to indicate the extent to which the uncertainties of the current war in the Gulf are common to all such conflicts. They should suggesttheirown admonitions.Whatever the outcome and whateverthe durationof theconflict, thiswar will not 'solve' theproblem of theGulf,nor of theMiddle East more generally. A rangeof policy issueswill emerge fromit which will remain to bedevil governments-as they did after the two world wars and afterthe various Arab-Israeli wars.

Why did Saddam invade?

The long-termbackground to the Iraqi invasion needs no rehearsal.Iraq has long had a disputewith Kuwait, on occasion denyingthelegitimacyof Kuwait as a separate state altogether,on others questioning the delimitationof the frontiers between them. In I96I it took the formerapproach, in I973 it laid claim to some Kuwaiti islands.At thesame time,Iraq had been a restless power: thelegitimacy of theBa'thistregime,and of Saddam Hussein in and credibility particular,depended upon his attaining new foreign policy successes and enhancingIraq's international position. It was in the late I970S thatIraq began to pursuethisnew international role as the champion of Arab radicalismagainstEgypt,in particular againstSadat's Iran. From I980 to I988 opening to Israel,and as theopponentof revolutionary
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FredHalliday Iraq foughtIran to a standstill. Following that ceasefire, it was expected that, exhausted,Iraq would accept peace and rebuild.But it did not: having forced Iran to accept peace on its terms,it then blocked the peace processby raising new demands,in particular fortherevisionof the Shattal-Arab riverboundary, and began to assert itselfmore forcefully in the Arab world. Iraq sought hegemony,not coexistence. The decision to invade Kuwait came againstthisbackground,and reflected fivebroad elementsof the situationin the earlypartof I990. First,the impasse with Iran. Iraq's attempt to impose a capitulationist peace on Iran did not succeed. Iran refused or to releaseIraqi to renegotiate theShattal-Arab frontier, prisonersof war. Afterthe new Iranian governmenthad consolidatedin late I989 afterKhomeini's death, it was clear that Iraq had been blocked on its frontiers. eastern Second, theeconomic crisis withinIraq. In thelate I970s, Iraq, by then discovered to have oil reservessecond only to Saudi Arabia's in the region,was in a strongeconomic position.But eightyearsof war turnedit into a net debtor (to the tune of around $70 billion), and despite government to promotetheprivatesectorand domesticagriculture, attempts Iraq remained in a weak position even afterI988. The fall in world oil prices compounded this. The seizure of Kuwait offered a solution at several levels a distraction from domestic resentment at economic mismanagement,the possibilityof acquiring Kuwaiti assets and investments, and the seizure of the oil wells themselves. Third, the Cold War had ended. The fall of the communist regimes in EasternEurope, and in particularthe fate of Ceau?escu in Romania, led to a in democratization widespreaddebate in the Arab world about possiblefuture Iraq and elsewhere. Despite theirhelp to him in the past, Saddam suspected both Soviet and US intentions towards him. This led him to adopt a more and fromearly I990 he was hostileattitudeto the United Statesin particular, openly criticizing Washington.He called forthewithdrawalof US forcesfrom the Gulf and an Arab financial boycottof the United States.He no longer felt he needed the US backing he had used against Iran: he now saw benefitin the West. confronting Fourth, Iraq's dispute with Kuwait. On top of the long-standingborder as a resultof fournew issues,in I990 Kuwaiti relationswith Iraq deterioriated questions the Iraqi demand thatits debt to Kuwait incurredin the war with Iran be cancelled; the relateddemand thatKuwait pay compensationforIraq's in thatwar; the charge thatKuwait, along with the defenceof Arab interests Amirates,had deprived Iraq of oil revenues by producing above its OPEC quota and so pushingdown the price of oil; and the charge thatKuwait had taken oil unfairlyfrom the Rumaila field, which straddlesthe two states' frontier. stalematein the Arab-Israelicontext.The situationin the Arab world Fifth, was not an instigatorycause of Iraq's invasion of Kuwait, but it was an importantpart of the background and provided an opportunityfor Iraq to itsclaimsto regionalleadership.For the two yearspriorto August I990 reassert
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The Gulf War and itsaftermath the Arab world had been dominated by the failureto make progressin the Arab-Israeli dispute. The Palestinianintifadah from November I987 and the PLO's concessionof Israel's rightto exist in November I988 raisedhope of a breakthrough.Instead,nothing happened, while the majorityof Arab states maintainedpolite relations with the West. On top of that,in the course of I989 and I990 therecame the beginningof mass Soviet Jewishemigrationto Israel. A climate of frustration, focused on the Palestinianissue, developed, one that Iraq could take advantage of. In thisexplosive situation,negotiationsbetween Kuwait and Iraq failed to make progress. The Kuwaitis were over-confident; theyseem to have imagined never that Iraq would invade, and they were not minded to conciliateeven wheretheIraqishad, by generalagreement, some cause,as on theoil pricesissue and over Rumaila. The Iraqis saw an opportunityto asserttheirpower, and when negotiationsfailed they took a sudden decision to invade. 2 August followed. It is possible to argue that Saddam had decided weeks or months before to invade Kuwait. But while the logic of events had built up over months,with contingencyplans for such a move having been preparedyears before,it is quite plausible that Saddam took his decision on the spur of the moment, much as he seems to have done in I980 when he decided to attack Iran. The fallout for Gulf politics The core of the currentcrisisis Iraq itself, and the link that has long existed between the dictatorialregime of the Ba'th Party within and the aggressive policies it has pursued abroad. Iraq is a countrywith a strong,well-educated middle class includingin its ranksmany skilledprofessionals: theycould form thecore of a system thatcould addressthecountry's developmentproblemsand put the oil revenuesto good use. Saddam Hussein has abused thisclass,but his abilityto survive and to transform Iraq as he has done restspartlyupon the he received from reluctantsupport has it. The question that is now posed is whetherin the aftermath of Ba'th rule more rational,competentand peaceoriented governmentcould emerge in Iraq, commanding the support of a democraticmajority. The outcome depends upon a number of factors, as yet incalculable. First thereis the question of the longer-runimpact of the defeat,and in particular whetherit leads to the effective breakdown of Ba'thist control,and law and order,in the country.In the lattercase therecould well emerge a situationof civil war, with rival ethnic,religiousand politicalgroups vying forpower or, in Lebanese fashion, bitsof territory. Such an eventuality controlling particular could also bring in outside powers, not least Iran and Turkey. A second possibility is a relatively weak, unstable military regime at the centre, of theperiod between thefallof themonarchand theadventof the reminiscent is the replacement Ba'th to power between i958 and I968. A thirdpossibility of the Ba'th by a strongnationalist/military regimeemergingfromthe army,
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FredHalliday a more and more benignthantheBa'th but basicallyconstituting lessaggressive human versionof the same. This may well be what sectionsof thearmed forces the want,and it may also be what thoseoutsidewho are considering themselves such those and for states, coalition for the want: would of the country future as Egypt, Syria and Saudi Arabia who are advisingthem on postwar Iraq and mustbe to go regime,thetemptation elementsof an alternative are harbouring for the most calculable substitute. There are, however, a range of opposition forcesthat aspire to replace the currentregime in Baghdad by a more open, civilian, and pluralisticregime. of the opposition-dissident Ba'th and army The four main constituents communists,Kurds and Islamists have formed a coalition with a officers, political programme that would allow for a transitionto a democratic of the I970 thiscalls fortheimplementation Among otherthings, government. fora Kurdishsecessionand which could avertpressure on Kurdistan, agreement breakup of Iraq by giving the Kurds some autonomy. Were thisprogramme a stable,democratic thenthe long-rungoal of establishing to be implemented, and peaceful governmentin Iraq would be achieved. Justas war destroyed in Germany and brought democracy and prosperity dictatorship militaristic and Japan,so it could in Iraq. But the prospectsfor such an outcome are not notably Syria and is frail, and various outside forces, good. The coalitionitself the Iran, have theirown candidatesfor power; the coalition and particularly Saudis are unlikelyto want to accept democracy in Iraq, so near themselves; and the conditions inside Iraq are not going to be propitious to such a democratictransition. The question of democratic politics is, however, also posed for the other of Saudi Arabia and forthe monarchies and in particular statesof the peninsula, Kuwait. In both cases the royal familieshave in the past made promises of but have not implementedthem later on. The reformwhen under pressure, human rightsrecords of these regimes have been criticizedby international before that of the republican bodies, although they pale into insignificance regimesthey adjoin, namely Iraq, Syria and Iran. The lack of revolutionary because it democracy played a part,however, in the onset of thiscrisis: first, against enabled Saddam Husseinto pose as thechampionof popular resentment the 'Croesuses', the parasiticrich monarchsof these states,both within the peninsulaand among Arabs in otherpoorer states;and second, because in the case of Kuwait the disastrousdiplomatic mishandlingof the crisisby the alprovocation of the Iraqis over the oil issue Sabah familyand the unnecessary was in part motivatedby a desire to use conflictwith Iraq to quell domestic dissent. Unlike Saudi Arabia, Kuwait has a constitutionwhich allows for democratic politics and limits the powers of the Amir: this has been little respectedby the Amir, however, and in I986 he dissolved the duly elected parliament.On past showing and despite promises to the convention of to Kuwaiti politiciansheld in Jidda last October the al-Sabah were reluctant and allow a democraticopening in Kuwait, or to subjectthe country'sfinances Given the seriousincidenceof corrupt work to public scrutiny. reconstruction
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The Gulf War and itsaftermath administration and incompetenceshown by the royalfamilyin the I98os, there was considerableconcern among Kuwaitis about the patternof the postwar systemin theircountry. The issue of democracyis equally posed for Saudi Arabia itself.One of the on the al-Sabah not to liberalizehas been fromSaudi Arabia, and it pressures can be assumed that currentpreferences of many Saudi princes are for a of strongAmiri control withinKuwait once it is liberated.Yet in restoration neitherSaudi Arabia nor Kuwait are the rulingfamiliesof one mind, and, as in othercountries, thedifficulties of promotingdemocracycannotbe attributed of therulers. Democracy takestimeto develop in any merelyto theself-interest in to do so Britain,theUnited Statesand France,and society it took centuries is relativelyrecent in a range of major countriesincluding Germany, Italy, Spain, Greece and Japan,let alone EasternEurope. In additionto the social and economic tensionspresentin these societies,thereare threeparticularreasons why a move to democracymay be especiallyhard. First,theseare fragmented withoutcommon politicaland social values: Iraq and Syriahave been societies, ruledby small minorities while respectively), (Sunni Arabs and Alawite officers is a modern creation, the result of the Saudi Arabia, it is often forgotten, Second, the conquest of the peninsula by the Saudi tribes in the I920S. continuedinterstate tension,focusedboth on the Arab-Israeliand on the Gulf arenas,militates againstconfidencein democracy: the degree of militarization of these societies' internaland external systemsencouraged army rule and repressive security. Third, thereis the fact,unique to the region,thatmany of those pressingfrom below for democracy have themselvesan undemocratic programme: the Islamistforces, which in most cases appear to be the strongest forpower in a more open context,aim not to establish a democratic contenders norms,but to governmentor one thatrespectshuman rightsor international impose theirown populistbut coercive regimes,as the example of Iran shows. of recentelectionsin Jordanand Algeria indicatethatin exchange The results for the established and often stale undemocratic regimes, vigorous and popularly backed undemocratic regimes are waiting to take their place. orientationsof these regimes (which are Quite apart from the international very hostile to the non-Islamic world) and their probable incompetence in administration and internationaleconomic management, such successor however democratically elected, would not bring the expected governments, whetherpolitical or economic, to the peoples in question. benefits, There is, of course, one additional reason for the lack of development of democracyin the region over the whole of the modern period, and thatis the policy pursued by outside powers. In a curious combination of self-serving Westernand Soviet policy has acceptedtheidea, engaginglyasserted by myths, most Middle Easternrulers, thatin some way or otherthe region is not 'ripe' thereare different forms fordemocracy,or alternatively thatin some countries of consultation and legitimacyin operation,unseenby externalobserverswith the policy pursued criteria. One has only to contrast theirinept,universalistic, in EasternEurope or the by the United Statestowardscommunistdictatorships
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FredHalliday regimesin the Middle Third World with thattowardsa rangeof undemocratic East, traditionalmonarchiesand nationalistrepublicsalike. Patchy as the US record may be throughout the world, and overshadowed as it is by between of strategy and convenience,thereis a markedcontrast considerations and (since the the degree of pressureand sanctionexertedagainstSoviet-style Third World dictatorships, and theenduringindulgence mid-Ig7os) right-wing of undemocratic regimes in the Middle East. The Soviet Union, with its supportfor 'national democratic' and 'socialist oriented' regimes(Iraq, Syria, Libya, South Yemen, NasseristEgypt) has no bettera record. It was, indeed, the fearthat thisindulgence might come to an end that was one of the main againstthe United Statesin late i989 and reasonsforSaddam's sudden turning early I990. It remainsto be seen, however, whethertherewill be any clearer Western and Soviet commitmentto democracy in the region, and whether, even if thereis, it will lead to clear or long-sightedpolicy implementation. The many faces of regional security The term'regional security'is usuallyused as a portmanteauto cover at least elements of security the maintenance of peace between three different regional statesby means of some kind of acceptable military'balance' and a formal set of treatyarrangements;the stabilityof the regimes themselves against internaland external opposition; and the management of external relationswith the region, in both strategicterms(i.e. so as to keep out rival outsidepowers) and economic ones, most notablyoil. The mythof thosewho propound securitysystemsis that such systemsbenefit all forces equally, not so. The regimesin power benefitat the expense whereasthisis necessarily of their(oftencoercivelysuppressed)subjects; the regional powers associated withinany alliance system; with such a system compete forgainsand influence and great powers from outside propose 'security' systemsthat are to their particular advantage and seek to minimizeor completelyexclude the influence of theirrivals.This latterpoint was as clear to Dr Kissingerin the post-I973 in theMiddle East as it was to Mr Brezhnevin EasternEurope in i968. situation In the case of the Middle East thisissue is clearlyof vital importance.The in the contemporary world in thedegree of theinterstate regionis pre-eminent war and the attendantarms races and tension; and its interstate competition is more complex than anywhere else in the world because it involves not as was the case with the Cold War in Europe, but a just a bipolar conflict, set of interlockingconflicts Arab-Israeli, Iran-Iraq, Iraq-Syria, Iraq-Saudi Egyptian-Libyan, Arabia, Saudi-Yemeni, Syrian-Lebanese,Syrian-Jordanian, and so forth.The historyof formal Moroccan-Algerian, Palestinian-Syrian, and informal treaty organizations in the region is one of weakness, and failure:by the Arab League in the I940s, by the Baghdad incompleteness Pact-CENTO in the ig5os and I960s, by the'Twin Pillar' approachin theGulf in the I970s, by the Gulf Cooperation Council and the Arab Cooperation Council, which failed to protecta member stateand founderedon 2 August
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The Gulf War and itsaftermath

I990. The problems are well known: no organization can be created that includesIsraeland the Arabs,or even the Arabs and Iran or Turkey; the Arabs themselvesare divided, as the rival GCC-ACC lineup prior to the Kuwait invasion showed, followed by the breakup of the ACC itself;the Arabs as a whole are reluctant to sign formaltreaty with the Westernpowers agreements in supporting thathave a directinterest themand in guaranteeing access to oil; and Arab public opinion is hostileto Westerntroop deployments even where, as in Saudi Arabia, thesetroopsare thereto protectthe countryfromexternal attack. The abilityof local and externalforcesto build a system thatmeetsthe goals is therefore of legitimateregionalsecurity limited,and thiswill be exacerbated by some of thelikelyconsequencesof theGulfWar-widespread anti-Western the weakened legitimacyof Middle East coalition feelingin major Arab states, states,the enhanced position of Iran (which will use its power to oppose of Israelto make any concessionson it does not like), the refusal arrangements discordamong the greatpowers about what the Palestineissue,and increasing kind of solution to come up with. The defeatof Iraq, however, and the sense of urgency which many even the Saudis will feel, may lead to some development, within obvious guidelines. These might include, first,the maximum use of indigenousmilitaryforces,notably those of Egypt; second, the deploymentof multilateral peace-keepingforcesunder UN, Arab League or Islamic auspices,at least to act as a buffer between Kuwait and Iraq; third, the deploymentas faras is practically possible of Westernmilitary capabilities on sea and in the air, with actual troops (as distinctfrom prepositioned equipment) kept out of the region, possibly in Turkey or other NATO to seek (if not find) a solution to the countries; fourth,a concerted effort Palestinianquestion; and fifth, greaterattentionto programmesof economic and social developmentdesigned to rebuild destroyedcountries, notably Iraq, and to remove the widespreadproblemsfoundin much of the restof the Arab world. The difficulties with this programmefor securityare evident,however. In the first between the long-termneed to establish, place thereis a directconflict develop and maintainviable democraticregimesin the region and the more immediateconcernsof security. Faced with thischoice, thereis a presumption i.e. the thatthe Arab regimesand theirWesternbackerswill choose stability, of democratization. will to statusquo, over the riskier path They point what happens when the lid does come off in Iran, Jordan,Algeria, Tunisia to reinforce theircase. Second, any remotely foreseeablesecuritysystemwill fail to address the Palestinian question.The Israelisdo not appear to be going to compromise.The PLO may be discredited,not least among the Gulf Arabs, but will not to emerge. If there disappear,let alone allow a viable alternative representative forthe PLO it is the more intransigent is a substitute Hamas, inspiredby Iran. alone are not going to do much to quell Palestinian Welfareprogrammes anger. There is no 'developmental fix' as faras the Palestinianissue is concerned,no 231I

FredHalliday killingthe intifadah with kindness, even assumingtherewas agreementwithin Israeland the Arab world on helpingratherthan punishingand marginalizing the Palestinians. Third,themajor regionalpowers have theirown postwaragenda, each of an incompatiblekind. Turkey does not, unlessthereis a complete breakdown of governmentin Baghdad, want to acquire Iraqi territory; the oil of northern Iraq has only 20 yearsto go and Ankara does not want anotherfour million role in the region,as Kurds withinitsborders.But it does want a new security an ally of theUnited Statesand as an influential power in a regionwhere (Turks will point out) all the trouble is caused by quarrels between theirerstwhile colonies. Iran not only does not want Turkey to have a role in the Gulf,but it wants to exclude Egypt, Pakistan and the Western forces as well. In the current climate in Iran it is almost inconceivable that any Tehran governmentcould join a formal treatyorganization with Western powers or the conservative Arabs, however loosely defined.For Iran the issue is simple: the Kuwait crisis shows theneed forthe traditional regionalhegemon to reassumethe mantleof maintainingorder. The area is not called the Persian Gulf for nothing. Saudi Arabia, on the otherhand, sees the war as both a threatand an opportunity:it invasionby Iraq, and it will allow US troopsto remainfor feared,reasonably, a considerableperiod. It wants to make sure, however, that it controls the of politicalcontrol thattherewill follow re-establishment postwarsettlement: in Kuwait, establishmentof a more friendlyArab nationalist regime in Baghdad, the polite exclusion of Iran, the return of Turkey to pre-crisis abstention.On the issue of Israel, Iran retainsthe classic rejectionist stance, to accept the legitimacyof any Jewishstate.The Saudis have also to refusing look to the disarrayin which the world Islamic communityfindsitself, with even groupsthatwere hitherto fundedby the Saudis, such as FIS in Algeria and various Egyptianforces,now supportingSaddam Hussein. forsecuringaccess to oil and maintaining On the outside,the preconditions 'stability' are not so propitious either. The United States will not bear the financial and human costs of a large Gulf deploymentsingle handed, not least because of domesticoppositionon financial grounds,but its OECD allies have and financial to play military an ambivalentattitude-on the one hand refusing rolescomparableto theUnited States,on theothersuspecting thatonce thewar is over the US will use the 'leverage' it has acquired over Gulf oil suppliesto exact concessions fromJapan and Western Europe in futureeconomic and The paradox is thatthe otherOECD statesare suspicious security negotiations. of what theysee as a re-establishment of US hegemony,but are ready for the fromthe Pentagon United States to accomplishit. The US public, as distinct and the White House, is not that concerned about hegemony or dying for Kuwait, but does want to see a reassertionof hegemony as against their commercial competitors. intrusive increasingly

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The Gulf War and itsaftermath The economic dimension strategyand internalpolitics within these Beyond the issues of international to the oil industry and the place of the lie a setof questionspertaining countries has focusedon the regionin the world economy. In one sense,externalinterest was paid to wrong aspect of the economic impact of thiswar. Most attention whetherit would provoke a risein oil prices,but afterthe initialuncertainties of August the world supplymade up the fivemillionbarrelsa day of lost Iraqi did not disruptoutput and Kuwaiti output,and the outbreakof war inJanuary or transportation from the lower Gulf. Far more importantwere two others aspects of the crisis: the impact on the budget less immediatelyquantifiable, deficits and hence on the overall economic prospectsof the United Statesand confidence. commercialand financial Britain,and the impact on international sinceno one could say what the war was going The former is hard to quantify, to cost the coalition states,in particularthe United States. With an annual of $300 billion,theadditionalexpenditures associatedwith military expenditure the war (of, say, $So billion mostlycovered by contributions by other states) mightnot seem so large. Compared to the costsof the othermajor crisisthat hit the US government'sfinancialcalculationsin I990, the savings and loans of thelatter's theKuwait crisisappeared small indeed,estimates cost over crisis, a number of years running from $soo to $i,Soo billion. Nevertheless,the of theUS and Britishbudgetsmay well have long-term distortions deflationary Even more so, the fallin businessconfidenceand the impact on certain effects. especially vulnerable sectors-airlines,tourism-meant thatthebroad,long-run however stable and macroeconomicimpactof the war have been considerable, the oil price will have been shown to be. fourparticular possibleto identify Againstthisbackground,it is nonetheless of the war must confront. economic issuesthat any assessment Oil prices:The war was in part caused by an oil price dispute within OPEC, between the high-pricegroup including Iraq and the low-price grouping of Kuwait, Abu Dhabi and Saudi Arabia. One lesson which has probably been learntby OPEC states,in the Gulf at least,is thatsuch playing with oil prices is too dangerousto be worth it. A consensusin favourof holding oil pricesis of Iran into the Gulf, therefore integration likelyto emerge.If thereis a greater and a desireto promotethe rebuildingof Iraq undera new regime,supportfor relatively higherpricesis also likely. in holding priceswill, of Production levels:This politicaland economic interest course,run up againstthe factthatwhen Kuwaiti and Iraqi productioncome on streamagain they will eitherpush down prices or entail that otherswho have raised output since August lower theirproductiononce again. This may take time a year or two to achieve. In the longer run from i995 onwards the world oil marketwill more and more come to be dominatedby a core of Gulfstates:Saudi Arabia, Kuwait, Abu Dhabi, Iraq. They will be able 233

FredHalliday to maintainprices, provided they are united, and the knowledge that their dominationis going to increasemay act to consolidateOPEC discipline sooner. Before I990 the USSR produced about I2 million barrelsof oil Sovietoutput: a day, of which 3-4 million were exported. In addition it supplied substantial amountsof gas to WesternEurope. The crisiswithinthe USSR has hit output of oil and gas in several ways: levels of output have fallenbecause of strikes, and maintenancedecisions,output of managementis not taking investment investment goods (centredin Azerbaijan) has been hit by strikes. This has led to a marked fallin productionand exports.Output in JanuaryI99I was over 8 per centdown on I990, and thecurrent Soviet budgetpredicts thatoil exports will fallby So per cent in 1991. Some Soviet expertsnow predictthatby I992 or I993 the USSR will be a net oil importer.For EasternEurope the changes since theyinvolve both cutbacksin withinthe USSR are doubly threatening, physicalsuppliesand risesin price to world levels, as well as, from i January Soviet insistencethat all payment be in dollars. This means that East I99I, European demand foroil on the world marketwill increasein the monthsand yearsahead. Even if Soviet and Gulf prices are the same, the East Europeans may calculate that non-Soviet supply is more reliable than the intermittent exportsof a troubledUSSR. and conflict thathave long prevailedin the Security ofsupply:Given thetensions Gulf, not least the Iran-Iraq War and the attendanttankerwar, it is striking how littleoil supplieshave been disrupted over recentyears.The Kuwait crisis has followed the same pattern.There remains,however, a long-termconcern in the outside world thatGulf oil supplieswill be threatened, if not by direct withinstatesand by interstate attack,then by political conflict wars, and that measuresneed to be taken to insulateas far as possible this supply from the in which it takesplace. No system can operateagainstthe politicalenvironment in theregion,and it is in their wishesof governments to ensure long-runinterest that oil keeps flowing. Any broader system of regional security,with or without the presence of external militaryforces, will need to address this forsecuresupplyinvolve the protection question. The technicalpreconditions of productionand refining facilities and the guardingof tankershippinglanes and pipelines.Given past and recentexperience,thisshould not be too difficult is theoverallpoliticalenvironment: herethe to organize.What is more difficult focusreturns to the questionaddressedabove, of the regimesin thesecountries and the abilityof the oil-importing statesto findreasonablecommon ground of oil ultimately The security derives with legitimateand stable governments. fromthe political strength and legitimacyof the statesin the region.
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