Iraq’s war with Iran (1980-1988) proved longer and costlier than Saddam Hussein had ever imagined.[1] At the end of the war Saddam Hussein found himself ruling a country that had exhausted its once huge oil reserves, that had become loaded with debt, and that badly needing to reconstruct. Iraq’s debt belonged to the Sunni Arab Gulf states. To finance the war he had presented himself to the other Gulf states as their shield against radical Shi’a Iran and has asked for money. Apparently Kuwait, the Arab Emirates, and Saudi Arabia had seen it in the same light, because they loaned Iraq $40 billion.

The post-war negotiations with Iraq’s creditors were mismanaged on both sides. Iraq asked for too much: forgiveness of the $40 billion debt, plus $30 billion in new money to pay for reconstruction. Since the Iranian danger had been blunted over the course of the Eighties, Iraq’s creditors were not much inclined to give the country easy terms or, for that matter, anything at all. Both Saddam Hussein’s request for loan cancellation and for an additional $30 billion loan (which was just as unlikely to be repaid as the original $40 billion in loans) fell on deaf ears. If Iraq could not get loan cancellation and additional loans, then it would have to pay its own way through oil sales. The falling price for oil put a severe crimp in what Iraq could earn.   In these negotiations the Emir of Kuwait took a particularly strong stand for the sanctity of international economic agreements by insisting upon repayment of the existing debt at the same moment that he was violating his oil quota.

In July 1990 Saddam Hussein sent Foreign Minister Tariq Aziz to put his case to the Arab League. The Iraqis made the same argument to the Arab League that the French and British once had made to the Americans after the First World War: We spent blood in the common cause while you gave only money, so you should cancel the money debt in exchange for us cancelling the “blood debt.” The Americans had not bought that line in 1919 and the Gulf states didn’t buy it in 1989.

On 17 July 1990 Saddam Hussein gave a belligerent speech that seemed to threaten action. That same day he sent the Kuwaiti government a letter in which he demanded a halt to the slide in oil prices, cancellation of Iraq’s debt to Kuwait, and an Arab package of aid to Iraq. Failing this, said Saddam Hussein, “we will have no choice but to resort to effective action to get things right and ensure the restitution of our rights.”[2]

To give meaning to this communication, Saddam Hussein ordered 30,000 troops massed close to the Iraq-Kuwait border. This threat, which Kuwait shared with Saudi Arabia and—undoubtedly–with the Americans, led the Saudi government to attempt to mediate. On 25 July 1990 Saddam Hussein had an interview with the American ambassador, April Glaspie, in which he gave her an ambiguous threat and she gave him an ambiguous warning. A week later, on 2 August 1990, the Iraqi army rolled into Kuwait.

The role of Saudi Arabia and its Gulf State clients in the coming of the First Iraq War is not much discussed these days in the American media. This role included financing Iraq in its long, predatory war against revolutionary Iran. It included pursuing a foolishly selfish policy on Iraq’s war-debts. It should surprise no one that, if it will take “boots on the ground” to defeat the Sunni fanatics of ISIS in their war against the pro-Iranian governments in Baghdad and Damascus, there will not be Saudi feet in them. Nor, probably, American feet. That just leaves the Iranians. Or the partition of Iraq.

[1] John Keegan, The Iraq War (2005).

[2] Quoted in Keegan, The Iraq War, p. 75.