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The US, Oil and the New World (Dis)Order
By Garry Leech
Zed Books LtdCopyright © 2006 Garry Leech
All rights reserved.
Iraq: seeking the riches of Babylon
On 16 March 2003, four days before the United States invaded Iraq, US Vice-President Dick Cheney declared that the conflict would be over in 'weeks rather than months' and that 'from the standpoint of the Iraqi people, my belief is we will, in fact, be greeted as liberators'. Six weeks later, President George W. Bush landed on the aircraft carrier USS Abraham Lincoln and, standing under a sign that read 'Mission Accomplished', declared that major combat operations in Iraq had ended. At that time, 109 US soldiers had been killed in the campaign to overthrow Iraqi leader Saddam Hussein. But one year later, a USA Today/CNN/Gallup poll, the most extensive nationwide survey conducted up until that point, showed that 71 per cent of Iraqis saw the US-led coalition forces as 'occupiers' rather than 'liberators'. In September 2004, the number of US troops killed in Iraq surpassed the 1,000 mark as resistance to the US military occupation continued to intensify. Of greater concern for the Iraqi people, and a contributing factor to the escalating insurgency, was the fact that the country's 'liberators' were primarily responsible for the deaths of 100,000 Iraqis during the first eighteen months of the occupation.
While it became evident that the Bush administration had underestimated the degree to which Iraqis would resist the occupation, it did not prevent the US president from attempting to implement his plan for 'democracy promotion' and the imposition of neo-liberal, or 'free market', economic reforms in Iraq. Such policies were intended to facilitate the access of US energy companies to Iraqi oil, a commodity that had remained beyond the grasp of foreign corporations since Baghdad nationalized the oil industry in 1972. With 112 billion barrels of proven reserves, Iraq contains the second-largest supply of oil in the world after Saudi Arabia. Iraq and its vast oil reserves figured prominently in US foreign policy during the latter decades of the twentieth century. Washington's stance towards Baghdad shifted dramatically during this period from undermining the Iraqi regime in the 1970s to supporting it during the 1980s and then seeking its overthrow in the 1990s.
The rise of Saddam Hussein
Until 1967, a consortium of foreign oil companies ironically named the Iraq Petroleum Company (IPC) held a virtual monopoly over Iraq's oil-producing capabilities. The IPC consortium consisted primarily of British companies including Shell Oil, although US energy giants Standard and Mobil equally shared a 23.75 per cent stake (Tripp 2000: 60). As a result, Iraq was dependent on Western oil companies, and by extension Western markets, for decades. The 1967 Arab–Israeli war, however, helped set the stage for Iraq to finally nationalize the IPC.
Baghdad responded to US and British support for Israel during the war by severing diplomatic relations with the two Western powers and establishing closer ties with the Soviet Union. A military coup on 17 July 1968 that brought the Ba'ath Party to power did not affect the country's blossoming relationship with the Soviet Union. In fact, if anything, the new Ba'athist government, led by Hasan al-Bakr and Saddam Hussein, developed even closer ties to the communist superpower.
The new regime backed up its socialist rhetoric by introducing subsidies for basic commodities, providing social services and establishing agricultural cooperatives. These government initiatives, along with the development of a patronage network in the primarily Sunni Muslim regions of the country, helped the Sunni-dominated Ba'th Party to consolidate its control over Iraq's political and economic affairs. Still, President al-Bakr was concerned with the Iraqi economy's ongoing vulnerability to IPC decisions regarding oil production. In 1969, al-Bakr decided to address this issue by negotiating a deal with the Soviet Union to help the recently established Iraq National Oil Company (INOC) exploit new oilfields. When these fields began production in 1972, following the signing of the Soviet–Iraq Treaty of Friendship and Cooperation, the IPC decided to punish Iraq by immediately halving oil production in its Kirkuk fields in the north of the country. Unhappy with the latest in a long history of IPC attempts to hold Iraq's economy hostage whenever the consortium's business interests were threatened, al-Bakr finally nationalized the oil consortium in June 1972.
Iraq had prepared itself for any possible economic retaliation by the IPC and Western governments by having Saddam Hussein negotiate a trade agreement with the Soviet Union, guaranteeing that the communist superpower would purchase Iraqi oil. The nationalization was hugely popular among the Iraqi people and the timing of it proved fortuitous as it occurred just over a year prior to the dramatic increases in global oil prices that resulted from the 1973 Arab–Israeli war. The signing of the oil agreement with the Soviets, however, also situated Iraq in the middle of the cold war.
In 1972, Washington responded to Iraq's burgeoning relationship with the Soviets by providing covert aid to Mustafa Barzani and his Kurdistan Democratic Party (KDP). KDP rebels were seeking to establish an independent Kurdistan in northern Iraq that included the oil-rich city of Kirkuk. The US-backed Shah of Iran, himself suspicious of the Ba'athist regime's growing ties with Moscow and its nationalist and socialist rhetoric, also provided aid to the Iraqi Kurds. US and Iranian support for the KDP contributed to an escalation of the conflict between the Iraqi military and Kurdish rebels. Both Iraq and Iran became increasingly concerned that the Kurdish issue might lead to a war between the two countries. In order to address these concerns, Saddam Hussein and Iranian officials met in Algiers in 1975 and agreed that Iraq would recognize Iran's territorial claims in the border region of Shatt al-Arab in return for Tehran ending its support for the Kurds. Not willing to undermine the Shah's position, the United States also stopped aiding the Kurds. When US Secretary of State Henry Kissinger was asked about the morality of abandoning a people that the United States had encouraged to rebel just because it was no longer politically expedient, he simply declared 'that covert military activity is not to be confused with missionary work'.
Many Kurdish leaders accused the United States, and Kissinger in particular, of betraying them. The KDP's Dr Sami Abdul-Rahman declared: 'It was the most cruel betrayal in our history – which is full of betrayals. Kissinger was instrumental in this betrayal. And it was totally unfair to promise the Kurdish people help and support and to give the impression that if the Iraqi government attacks we will help you – which they did at the beginning. Then in the middle of the road, to drop you.' With the cessation of US and Iranian aid, many Kurds accepted a government amnesty offer while others fled across the border into Iran in the face of an Iraqi military offensive. The KDP split into two factions with Jalal Talabani leading the newly formed Popular Union of Kurdistan (PUK). After fleeing Iraq, the KDP's Barzani went into exile in the United States, where he died in 1979.
In an attempt to ensure that the Kurdish conflict did not flare up again, the Iraqi government relocated close to half a million Kurds from their villages and towns in the north to Shiite communities in the south. At the same time, the Ba'athist regime encouraged Arabs to move northward in order to boost the Arab population in the oil-rich city of Kirkuk.
There was not only conflict between the Iraqi government and the Kurds; there also existed a history of confrontation between the minority Sunnis and the majority Shiites – the two Muslim groups constitute approximately 25 per cent and 65 per cent of Iraq's population respectively. Many Arab tribes in southern Iraq, particularly around the cities of Najaf and Karbala, were converted to Shiism in the mid-nineteenth century. Over the next half-century, they sought to establish an independent Shiite state in southern Iraq, a quest that ended when Britain determined the borders of the new Iraqi state in 1921. The country's Sunnis continued to maintain political dominance over the Shiites under British rule and following independence. Unlike in neighbouring Iran, where the majority of the population were Shiites of Persian origin, Iraq's various Arab Shiite sects failed to establish a central religious hierarchy. Consequently, according to Middle East historian Yitzhak Nakash (2003: 87), 'Successive Iraqi governments achieved a clearer separation between religion and state in Iraq than that achieved in Iran, thus preventing the mujtahids [Islamic legal scholars] from emerging as a major player in Iraqi national politics.'
In February 1977, large numbers of Shiites protested against their continued marginalization from the patronage networks that were benefiting from the government's vast oil revenues, which had reached $8 billion annually. The government responded to the protests by arresting thousands of Shiites and executing eight Islamic scholars. At the same time, Saddam Hussein, who had become a master of the carrot-and-stick strategy, incorporated certain Islamic values into the government's mostly secular policies and expanded his patronage network to include more Shiite communities. During this period, Hussein also consolidated his control over the state's security forces and in September 1977 assumed authority over the country's oil policies.
When the Ayatollah Khomeini's revolutionary movement in Iran overthrew the Shah in February 1979, Baghdad became concerned that Iraq's Shiite population might be influenced by the Islamic revolution that had occurred next door. In a pre-emptive strike, Hussein's security forces ruthlessly cracked down on underground Shiite groups such as al-Da'wa, and arrested clerics, including the Ayatollah Sayyid Mohammad Baqir al-Sadr, who had been speaking out against the Sunni dominance of the governing elite. Hussein's security forces then violently suppressed the Shiite protests that followed al-Sadr's arrest, executing several Shiite clerics, arresting thousands of Shiites and sending many more into exile. The Shiites in the south rose up and, with the country in a national crisis, al-Bakr resigned as president. Hussein was sworn in as the country's new leader and immediately turned his security forces against anyone in the Ba'ath Party he thought might challenge his ascension to the presidency. Hundreds of immediate and potential future enemies within the party were executed. According to Middle East expert Charles Tripp, the forty-two-year-old Hussein 'had triumphed by using the disconcerting combination of charm, generosity and ruthless terror that was to serve him so well in maintaining his position as ruler of Iraq for longer than any predecessor' (Tripp 2000: 223).
After consolidating his position within the party, Hussein targeted those Shiites who, spurred on by the new regime in Tehran, continued to revolt against the government. The new president ordered his security forces to round up thousands of Shiites, many of whom were executed. The extent of Hussein's ruthlessness became apparent following an assassination attempt against Deputy Prime Minister Tariq Aziz, when the new president ordered the execution of Ayatollah al-Sadr, his sister and hundreds of Shiites. Never before had an Iraqi government killed such a prominent cleric. Hussein then expelled as many as 100,000 Shiites from the country.
Not surprisingly, relations between Iraq and Iran began to deteriorate. Despite his ongoing confrontations with certain sectors of Iraq's Shiite population, Hussein tried to create a sense of national identity among both the Sunni and Shiite population by emphasizing the country's distinctly Iraqi and Arab traits. He attempted to instil in the population a consciousness of Iraq embracing leadership in the Arab world. In an effort to rally the Iraqi people around a nationalist cause, and believing that the new Iranian regime was vulnerable because it had not yet consolidated its hold on power, Hussein decided to reassert Iraq's sovereignty over the Shatt al-Arab region ceded to Iran five years earlier. Hussein was also taking advantage of the post-revolution rupture in US–Iranian relations and the resulting cut-off in US military aid to Tehran. In late September 1980, believing that an overwhelming display of force would lead the Ayatollah Khomeini to quickly call for negotiations, Hussein ordered Iraq's military to invade Iran.
Iran did not respond to the attack in the manner that Hussein had anticipated. In fact, the new Iranian regime successfully rallied the Iranian people to defend the nation. By 1982, the Iranian military was effectively counterattacking, eventually regaining control of the territory initially seized by Iraqi forces. The conflict turned into a war of attrition, with each country targeting the oil facilities of the other in an attempt to cripple its economy. In 1982, the conflict took a turn for the worse when Iraq began using chemical weapons on the battlefield in a desperate attempt to stave off an Iranian offensive. By the time the two nations agreed to a ceasefire in 1988, the Soviet Union and much of the West, particularly the United States, Great Britain and France, were aiding Iraq. The US Navy had become directly engaged in the Persian Gulf in order to ensure the safe passage of oil tankers. In the process, US forces virtually destroyed Iran's naval capabilities and even shot down an Iranian airliner, killing 290 people.
Meanwhile, in 1985, the rival KDP and PUK parties in Kurdistan formed an alliance and with support from Iran became increasingly effective at attacking Iraqi forces based in Kurdish regions. Hussein responded by dispatching his cousin 'Ali Hasan al-Majid to the Kurdistan region to orchestrate a brutal response to the Kurdish rebels. In 1987, captured rebels were summarily executed, while villages were destroyed and their inhabitants sent to government-run camps. By the following year, the Iraqis were no longer transferring the local population to camps; instead they had launched a scorched-earth campaign called al-Anfal (the spoils of war) that involved the destruction of villages and the massacre of all inhabitants. The Iraqi military also expanded its use of chemical weapons beyond the targeting of armed opposition on the battlefield to the general Kurdish population, including women and children. During a March 1988 attack on the Kurdish town of Halabja, Iraqi forces killed at least three thousand residents with chemical weapons.
By August 1988, KDP and PUK resistance was almost non-existent. As many as 80 per cent of Kurdish villages had been destroyed and 60,000 Kurds killed. As Tripp points out: 'The devastation of al-Anfal had demonstrated not only to the Kurds, but to all Iraqis, in the circles of power and elsewhere, the fate of those who stepped out of the "national ranks", as defined by Saddam Hussein himself' (Tripp 2000: 245–6). The cost of the Iranian and Kurdish conflicts proved staggering, with some quarter of a million Iraqis and Kurds killed and the incurrence of a national debt of $80 billion (ibid.: 248).
US–IRAQI relations in the 1980s
Following the overthrow of the Shah in 1979 and the seizure of fifty-two US hostages, Washington severed diplomatic ties with Iran and cut off aid to the new revolutionary regime. The United States viewed Iran's Islamic fundamentalist government and its anti-Western views as a new destabilizing force in the oil-rich Middle East. Washington's break with Iran meant that the United States had lost a major oil supplier. Securing an alternative source of oil became even more critical when the Reagan administration announced an embargo of Libyan oil in 1982. Consequently, the United States turned to Iraq. Despite its officially 'neutral' stance with regard to the Iran–Iraq war, the Reagan administration began aiding Iraq in order to ensure a steady flow of oil from the region – although diplomatic relations were not officially renewed until 1984. Throughout the 1980s, US oil imports from Iraq rose dramatically from fewer than five hundred barrels a day in 1982 to over half a million barrels a day by the time Hussein invaded Kuwait in 1990.
James Akins, an attaché at the US embassy in Baghdad from 1963 to 1965 and later the US ambassador to Saudi Arabia, claimed that following the overthrow of the Shah in Iran, 'The power structure of the Middle East changed dramatically with the most important country in the Gulf becoming, not one of the pillars of American policy in the area, but one of the strongest opponents of America, and the entire world, because of our close association with the Shah. 'From the beginning of the war, the United States provided Iraq with military intelligence about Iranian troop movements. In March 1982, the same month that the Reagan administration imposed an oil embargo on Libya for its links to international terrorism, the United States removed Iraq from its list of state supporters of international terrorism, thereby allowing US companies to export 'dual-use' chemical and biological technology to Hussein's government. The 'dual-use' categorization included equipment and technology that could be used for both civilian and military purposes. Over the next few years, dual-use equipment sold to Iraq included not only chemical and biological technology, but also aircraft and helicopters.
Excerpted from Crude Interventions by Garry Leech. Copyright © 2006 Garry Leech. Excerpted by permission of Zed Books Ltd.
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