Foreign policy 1968–80

The Baʿath Party came to power, to a large extent, on the waves of deep popular frustration that followed the Arab defeat by Israel in the Six-Day War. The party soon became, rhetorically, the most extreme anti-Israeli regime in the Arab world, promising to quickly conduct a successful war to wrest Palestine from Israeli control. The Baʿath retained, and even reinforced, a large and expensive expeditionary force in Jordan, yet it vitiated its own agenda by alienating virtually every regime in the Arab world. The party was extremely unpopular inside Iraq because of its disastrous experience in 1963, and both the public and the military were still to a large extent under the influence of Nasser. The party believed that, by besmirching the Egyptian leader, it could gain public support. It called on Nasser to resign for having failed the Arab world in the war and for having rejected Iraq’s demand to launch another, immediate attack. Relations with Baʿathist Syria also became tense. The oil monarchies of the Persian Gulf were wary of Baʿath social, national, and anti-Western radicalism, fearing Iraq might inspire revolutionary activities in their countries, and, indeed, the Baʿath regime called for Baʿath-style revolutions throughout the Arab world.

Beginning in the spring of 1969, relations with the Iranian monarchy also deteriorated over control of the Shaṭṭ al-ʿArab and over Iranian support for Iraq’s Kurdish rebels. Relations remained cordial, though reserved, only with Jordan, because Iraq needed Jordanian cooperation in order to keep Iraqi forces in that country. During a clash between the Jordanian government and the Palestine Liberation Organization in September 1970, the Iraqi government decided to avoid a confrontation with Jordanian troops (despite earlier promises to aid the Palestinians) and withdrew its forces east, into the Jordanian desert. This won them harsh criticism from the Palestinians and from Arab radicals in general. However, it could not save their relations with Jordan, which during the next few years reached a nadir.

Beginning in 1974–75, under the direction of Saddam, Iraq’s relations with its neighbours started to improve. The young vice president realized that the country’s near total isolation was threatening the regime’s hold on power. The crucial turnaround took place in 1975 when Iraq and Iran signed the Algiers Agreement, in which Iraq agreed to move the maritime boundary between the two countries to the thalweg—conditioned on Iran’s withdrawal of support for the Iraqi Kurds. This was followed by improved relations with most gulf states, and in 1975 Egypt’s new president, Anwar Sadat, and Sudan’s president, Gaafar Mohamed el-Nimeiri, each visited Baghdad. In the years that followed, relations with Jordan and Turkey also improved dramatically.

Besides Israel, the only close neighbour with which Iraq did not experience improved relations was Syria. Tension between the two Baʿathist regimes increased throughout the 1970s, and both sought to undermine the other. In 1976, as part of a dispute over oil-transfer revenues, Iraq stopped shipping oil through Syrian pipelines, opting rather to use a newer pipeline across Turkey. That this ongoing dispute conflicted with the Baʿathist’s pan-Arab rhetoric apparently was of little importance: the main task for Saddam was to keep the Baʿath Party in power in Baghdad, and the destabilizing influence of the Syrian branch of the party was something he could not afford. Only by denigrating the Syrian regime—as Saddam frequently did—by accusing it of betraying the party’s ideals and of colluding with Israel could he clearly signal members of his own branch of the party that involvement with Syria would lead to charges of treason.

Throughout the 1970s, while Iraq’s anti-Israeli rhetoric reached a crescendo, the Baʿath regime in Baghdad also began to play down its commitment to any immediate war against Israel. As Saddam explained it to his domestic audience, the Arabs were not ready for such a war, because there was a need to first achieve strategic superiority over the Jewish state. Saddam’s vision was that Iraq first would concentrate exclusively on economic, technological, and military growth, turning itself into a “fortress.” Only when Iraq was ready would it turn outside, “radiating” its influence to the Arab world. Only then, under Iraq’s leadership, would the Arabs be ready to confront Israel. In fact, there was a notable leap in almost every sector of Iraq’s economy and in military expansion during the late 1970s. This military development also included Iraq’s first meaningful investment in nuclear and biological weapons research.

Economic development to 1980

Perhaps the greatest assets of the Baʿath regime were the ambitious plans for reconstruction and development laid down by its leaders. The struggle for power during 1958–68 had left little time for constructive work, and the Baʿath Party sought not only to transform the economic system from free enterprise to collectivism but also to assert the country’s economic independence. The immediate objectives were to increase production and to raise the standard of living, but the ultimate objective was to establish a socialist society in which all citizens would enjoy the benefits of progress and prosperity. On the other hand, the regime’s socioeconomic program was an effective way of controlling the population. Critics of the regime have defined this system as combining “intimidation and enticement” (al-tarhīb wa al-targhīb): along with building a huge and extremely brutal internal-security apparatus, the regime expended the country’s vast oil revenues to create an extensive welfare system and to extend roads, electric grids, and water-purification systems to much of the countryside.

The five-year economic plans of 1965–70 and 1971–75 concentrated on raising the level of production in both agriculture and industry and aimed at reducing dependence on oil revenues as the primary source for development. But agriculture lagged far behind target goals, and industrial development was slow. The five-year plan of 1976–80, formulated in the years after Iraq’s oil revenues had suddenly quadrupled, was far more ambitious. Development goals in virtually every category were intended to increase, reaching two and even three times the levels of previous plans. Altogether the allocation for development compared with previous plans increased more than 10-fold, eventually reaching some one-third of the general budget. Ideologically, the regime now sought to legitimize itself through economic development rather than through extremist revolutionary rhetoric, as it had done previously. In practice, however, the funds may have been available to meet these goals, but the country’s inadequate infrastructure made implementation unachievable. Also, though many large industrial plants were constructed, production was inefficient, and Iraqi state products could compete on the world markets only in situations where Iraq had a meaningful advantage, such as in products that directly exploited the country’s petroleum surplus.

Baʿath leaders considered nationalizing the oil industry their greatest achievement. Between 1969 and 1972 several agreements with foreign powers—the Soviet Union and others—were concluded to provide the Iraq National Oil Company (INOC) with the capital and technical skills to exploit the oil fields. In 1972 operation started at the highly productive North Rumaylah field, and an Iraqi Oil Tankers Company was established to deliver oil to several foreign countries. Also in 1972 the Iraq Petroleum Company (IPC) was nationalized (with compensation), and a national company, the Iraqi Company for Oil Operations, was established to operate the fields. In 1973, when the Yom Kippur War broke out, Iraq nationalized American and Dutch companies, and in 1975 it nationalized the remaining foreign interests in the Basra Petroleum Company.

The initial step in agrarian reform had been taken with the Agrarian Reform Law of 1958, which provided for distributing to peasants lands in excess of a certain maximum ownership. A decade later less than half of the land had been distributed. In 1969 a revised Agrarian Reform Law relieved the peasants from payments for their land by abolishing compensation to landowners, and a year later a new Agrarian Reform Law was designed to improve the conditions of the peasantry, increase agricultural production, and correlate development in rural and urban areas. The results were disappointing, however, because of the difficulty officials had in persuading the peasants to stay on their farms and because of their inability to improve the quality of agricultural production. The Baʿath regime also completed work on irrigation projects that had already been under way and began new projects in areas where water was likely to be scarce in the summer. In the five-year plan of 1976–80, funds were allocated for completion of dams on the Euphrates, Tigris, Diyālā, and upper Zab rivers and Lake al-Tharthār.

Recognizing that a rapid transition to full socialism was neither possible nor in the country’s best interest, the Baʿath provided for a sector (albeit a small one) for private investors, and a third, mixed sector was created in which private and public enterprises could cooperate. This three-tier economy, however, provided fertile ground for official corruption, and senior government officials received illicit commissions for approving deals between the public and private sectors.