Ostensibly, the war between Iraq and Iran is about boundaries, about freeing the Shatt al-‘Arab from Persian occupation, about restoring the two Tumb islands and Abu Musa in the Gulf to the Arab nation, and — admittedly always a more distant prospect — liberating Khuzistan (“Arabistan”) from the alien yoke. In fact, Iraq’s decision to start the war in September 1980 was a gamble which, over the last three and a half years, has tragically and horribly misfired. Saddam Hussein and his colleagues thought that they could take advantage of the apparent chaos within Iran to overthrow the government of Ayatollah Ruhollah Khomeini and install in its place a regime more “moderate” and “acceptable” to the ruling families of the peninsula and to the Western powers. Such a move would have the added purpose of stifling the potentially dangerous Shi‘i opposition which had been growing within Iraq, especially since the Iranian revolution of 1978-1979. It would also elevate Saddam Hussein to a position of leadership within the Arab world. Instead, the Iraqi regime has found itself fighting an apparently interminable war of attrition which the Iranians seem to have no obvious interest in bringing to a quick end.

Saddam’s War

Iraq’s decision to go to war, and the course the war has taken, cannot be separated from the political ambitions and limitations of Saddam Hussein. Hussein’s presidency, in turn, has been shaped and defined by the war to an overwhelming degree. Saddam Hussein had been president of Iraq for little over a year when the war began; his fifth anniversary as undisputed leader of the republic precedes by just a month the fourth anniversary of the war. The president, moreover, has seized every opportunity to identify himself with the war and its outcome. From the very first days of the fighting he encouraged the state-controlled media to refer to the conflict as “Saddam’s Qadisiyya,” invoking the Arab Muslim victories of the seventh century which led to the collapse of the Sasanid empire of Persia. His Iranian foes have contributed to this identification by specifying his removal and “punishment” as a non-negotiable condition for ending the war.

Saddam Hussein’s leading role in Iraqi politics had begun long before his rise to the presidency in July 1979. The regime which he now heads and has made his own came to power in 1968. Ahmad Hasan al-Bakr, who was president for 11 years, served initially as the leading figure, but Saddam Hussein had emerged as the principal actor on the political stage by the middle of the 1970s, by which time he had become vice president. All the other coup makers of 1968 except he and al-Bakr had either been demoted or eliminated.

The events of July 1979 form an important backdrop to the decision to go to war in September 1980. The key political institution in Iraq since 1968 has been the Revolutionary Command Council (RCC). The size and composition of this body varied over time, but the core remained small in number — around half a dozen men who headed key security posts in the state apparatus and the Baath Party. On July 12, 1979, the secretary-general of the RCC was dismissed from the government and the party and arrested. On July 17, President al-Bakr resigned and transferred formal power to Saddam Hussein. On July 28, Saddam Hussein announced that he had uncovered a “plot” against himself and the regime, led from within the RCC itself. A special tribunal composed of seven RCC members began a six-day trial of 68 Baath Party members for “conspiring against the Party and the Revolution” on behalf of Syria. On August 7, the tribunal handed down 22 death sentences, 33 prison terms and 13 acquittals. The executions were carried out the next day in the presence of Saddam Hussein; those killed included five RCC colleagues and several long-time but inactive Baath Party foes who had been serving out prison terms for earlier “plots.”

The consequence of this putsch was to eliminate potential rivals within the leading cadre of the Baath Party and to concentrate further state and party power in the hands of Saddam Hussein and several close relatives and associates. The new, much smaller RCC included Saddam Hussein’s cousin, ‘Adnan Khayrallah, as defense minister and deputy commander of the armed forces, and a close companion from his underground days, Sa‘doun Shakir, as interior minister. The two other influential men in Saddam’s entourage are Tariq ‘Aziz and Taha Yasin Ramadan, both from Mosul. ‘Aziz handles most matters of foreign affairs and is regarded as the main ideologue of the regime’s inner circle. Ramadan is in charge of the “Popular Army” and the military bureau of the party, and oversees key financial negotiations and decisions. These men stand or fall with Saddam Hussein; if he goes, they will almost certainly go with him.

The tendency towards centralization and concentration of power has been accompanied ideologically by the jettisoning of much of the “traditional” rhetoric of Baathism, particularly references to Arab unity and Arab socialism. In its place, the government has sedulously fostered a vast personality cult around the person of Saddam Hussein himself. Not only is the war called “Qadisiyyat Saddam.” One of the most densely populated areas of Baghdad, Madinat al-Thawra, built in the early 1960s by the government of ‘Abd al-Karim Qasim, was renamed Madinat Saddam in October 1982. [1] In Baghdad, Saddam Hussein’s picture has been visible on walls and on public buildings for the past five years. He can be heard and seen nightly on Baghdad radio and television, and his speeches fill the pages of al-Thawra and al-Jumhuriyya. Iraq’s reversals on the battlefield have done nothing to lessen this campaign. In Basra, bombed-out shops are plastered with color posters hailing Saddam Hussein as “the second great conqueror of the Persian enemy.” [2] Rather than compromise his position, it appears that the prospects of an Iranian victory have only helped him to consolidate his primacy, at least for the time being.

State and Opposition

The Iraqi regime is well known for the severity with which it persecutes its domestic opponents. In a report which opposition organizations claim only presents the tip of the iceberg, Amnesty International said that it had the names of 520 people executed for political offenses between 1978 and 1983. Offenses for which the death penalty is prescribed include being a member of a party other than the Baath Party without revealing that fact; criticizing the conduct of the war; recruiting Baath Party members to another political party, and political activity other than the Baath Party by former members of the armed forces. That latter provision, which dates from July 1978, operates in the context of universal conscription: any ex-conscript — any healthy adult Iraqi male — is liable to be sentenced to death for engaging in “any political activity other than that of the Baath Party.” [3] In addition to those who have been executed, thousands of Iraqis have either “disappeared” or are known to be in prison.

In addition, the regime has carried out a systematic policy of mass deportation and “relocation.” Following an attempt on the life of Vice Premier Tariq ‘Aziz in March 1980, some 40,000 Shi‘a — said to be of “Iranian origin” — were deported to Iran. This process has continued intermittently ever since, with the result that there are now more than 100,000 Iraqi Shi‘i refugees in Iran and Syria. In April 1980, the leading Iraqi Shi‘i religious figure, Ayatollah Baqir al-Sadr, his sister Bint al-Huda and other members of their family were executed. In June 1980, the Revolutionary Command Council announced that “any Iranian family which is proved to be disloyal to the [Iraqi] revolution and to the homeland is subject to deportation, even if it holds the Iraqi nationality certificate.” In the present conflict, those “Iranians” of military age are being separated from their families on the grounds that they might be conscripted into the Iranian army, and there have been reports of coffins deposited at the entrances of houses which are empty because the dead man’s “Iranian” relatives have been deported. Another aspect of this campaign is the encouragement to Iraqis to divorce their “Iranian” wives. The RCC passed a resolution in April 1981 that: “Any Iraqi national who is married to a woman of Iranian origin is eligible for 4,000 dinars if he is a member of the armed forces or 2,500 dinars for civilians if he divorces his wife, or if she is deported.” [4]

The regime does not have recourse to the deportation option to deal with another main source of opposition, the Kurdish national movement. Kurdish politics are complicated, and the various factions grievously divided. The regime seems to have thought that the Algiers agreement of 1975 [5] had solved the “Kurdish question” once and for all. Nevertheless, the repressive measures which it adopted in carrying out its policies led to renewed clashes between the army and the Kurdish guerrillas in 1977. In 1978 and 1979, over 600 Kurdish villages reportedly were burned dawn and some 200,000 Kurds “relocated” in other parts of the country, as part of a scorched earth policy aimed at creating a cordon sanitaire some 12 miles deep and 500 miles long along the borders with Iran and Turkey. The University of Suleimaniya, the only institution of higher education in the area, was closed down in 1981; in the same year, the executions of nearly 200 Kurds were reported in Baghdad and Mosul. Fortunately for the Iraqi regime, their Iranian counterparts seem intent on pursuing as harsh a line as they themselves toward “their” Kurds.

In spite of the fact that the regime had been more or less under a state of siege for most of 1983, with Saddam Hussein choosing not to venture outside the presidential palace, its self-confidence does not seem to have been substantially shaken. Of course, the regime has so cowed the population with its enormous internal security forces, surveillance operations and the atrocious punishments which it metes out to opponents that the absence of expressed opposition cannot be taken to imply that the war, or the regime, are in any way “popular.” Nearly 1.5 percent of the population (200,000 out of 14 million) have either been killed, wounded or captured, and the regime has had to resort in almost macabre fashion to a range of financial compensations for the families of those killed at the front. [6]

But it has been impossible for the regime to make the kind of spiritual, national and moral capital out of the conflict which its enemy has been able to utilize so effectively. In spite of a huge program of mosque construction [7] and the use of religious symbolism, the regime has not succeeded in elevating the struggle beyond the level of survival. [8] For most ordinary Iraqis, the war now seems to have developed into a desperate but essentially straightforward struggle for the preservation of Iraq rather than a campaign that can be “won” in any meaningful sense. Although it has certainly caused untold suffering and destruction on both human and material levels — the number of casualties means that virtually every family is affected to some extent — few outside the ranks of the most militant Shi‘is would actually welcome the prospect of an Iranian victory. For all Saddam Hussein’s cruelty and rapacity, it is very difficult for Tehran to persuade ordinary Iraqis that Khomeini’s regime offers a more attractive alternative.

The only point at which signs of opposition from within the party appeared was in the spring of 1982, when Saddam Hussein was forced by the course of the battles to withdraw his troops from Iran and to prepare to meet an Iranian move into Iraq. Rumors abounded that Iraq’s backers in the Gulf were preparing to meet Iranian demands for reparations and were encouraging Saddam Hussein to step aside in order to bring Iran to the negotiating table. Whatever the substance of these reports, Hussein used the Baath Party’s Ninth Regional Congress to reassert his unchallenged command. He dismissed the RCC and appointed a new, smaller one. He purged the cabinet and the senior officer corps. The former minister of health, Riyad Ibrahim Hussein, was executed, apparently for suggesting that Saddam Hussein step down in favor of former president Ahmad Hassan al-Bakr. There is no way of gauging how serious this all was. In any event, state power remained firmly in the grip of Saddam Hussein and his main cohorts — Khayrallah, Shakir, ‘Aziz and Ramadan.

Some changes in the regime did occur in October 1983, when Saddam Hussein dismissed his half-brother Barzan Tikriti and several other Tikritis from their positions. There followed predictable rumors of a coup attempt, but it seems that the significance of these moves lay elsewhere. The fact that Barzan was initially replaced as head of the mukhabarat by a popular and competent general suggested a new degree of political assertiveness on the part of the military leaders who resented Barzan’s corruption and meddling. The general in question, Hisham Fakhri, was soon required back on the southern front, where he was in overall command of Iraqi forces. He was replaced as mukhabarat chief by Fadil al-Barrak, a Tikriti from Saddam Hussein’s tribe, and perhaps even from the president’s village, al-‘Awja. By midsummer, Gen. Fakhri had dropped from prominence, replaced as head of the Third Army by Gen. Mahir ‘Abd al-Rashid. The new commander is a former head of army intelligence and does hail from Saddam Hussein’s village, al-‘Awja. [9] Perhaps the decisive factor, though, was Barzan’s sponsorship of the renegade Palestinian terrorist Abu Nidal. This was at a time when Baghdad was actively seeking a decisive US “tilt” toward Iraq in the war, and Washington insisted that disavowal of Abu Nidal was an essential precondition to any such move. Abu Nidal was reportedly expelled from Iraq shortly thereafter. [10]

The Shi‘i Factor

One absence of opposition deserves some mention, considering its implications as to the nature of the “Islamic revival.” Tehran’s religious propaganda directed specifically at the Shi‘is who make up nearly 60 percent of the population seems to have had remarkably little impact. Iraqi Shi‘i conscripts do not appear to have deserted in any numbers to join the ranks of their Iranian co-religionists. [11] Thus a major factor in Saddam Hussein’s decision to invade Iran in the first place — the belief that Khomeini’s ideology would find a widespread echo among Iraq’s Shi‘i masses — seems not to have been justified by events. A number of tentative conclusions suggest themselves. It may well be that the regime’s propaganda has successfully identified “supporters of Khomeini” with “the enemies of Iraq,“ so that most of Khomeini’s potential supporters have been alienated or isolated. In other words, Iraqi Shi‘a unambiguously consider themselves Iraqis first and Shi‘a second. Another factor is that the kind of Islamic society which has evolved in Iran seems to have little attraction for Iraqi Shi‘a. Over a period in which the Middle East has experienced a resurgence of religiously based political movements, it is ironic that this war, with its strong sectarian undercurrent, has revealed and highlighted a dominant Iraqi patriotism.

To this one must add several caveats, though. First, sectarianism has to some extent been overcome by a virulently racialist campaign from Baghdad against everyone and everything “Persian.” The hegemony of the state-run media in Iraqi society insures that the most vicious and ridiculous caricatures and slanders will long outlast the conflict on the battlefield, and has helped to poison the possibilities of coexistence for generations to come. Second, although Iraq’s Shi‘a have proven that politically they are loyal citizens, the experience of the war and the social fissures that will emerge in its aftermath will probably heighten, at least at a personal and individual level, the divisions between Sunni and Shi‘i Iraqis.

Third, the war between the Iraqi government and the. underground Shi‘i movement has not yet ended. The latest installment reaching the outside world occurred in the spring of 1983. In May, the government executed six leading Shi‘i clergymen, all members of the al-Hakim family. Ayatollah Muhsin al-Hakim, who died in 1970, had been a leading scholar in Iraq’s Shi‘i community. Mohammed Bakr al-Hakim, his son, has been the most prominent collaborator with the Iranians. He has been living in Iran and agitating from there on behalf of the Islamic Republic. He is the head of the Tehran-based Supreme Assembly of the Islamic Revolution in Iraq, which has since established a presence in Hajj ‘Umran, an Iraqi garrison town on the northern front which Iran occupied in the summer of 1983. (His activities reportedly include touring POW camps in Iran to urge captured Iraqi soldiers — many of them Shi‘a from the so-called Popular Army — to volunteer to help overthrow Saddam Hussein. [12] According to one account of the executions, the Iraqi government invited leading clergymen from Najaf to attend a Baath-sponsored conference on Islam in Baghdad in April. Most, including those in the al-Hakim family, and another leading figure, Ayatollah Khoei, refused. One month later, the government arrested 90 members of the al-Hakim family, ranging in age from 9 to 76. The six, including three brothers of Muhammad Baqir, were hanged on May 20, in front of their relatives. One relative was released from prison to carry the message to Muhammad Baqir al-Hakim in Tehran that more would die if he did not halt his propaganda. Ayatollah Khoei was reported under virtual house arrest in Najaf, his telephone links to the outside world cut off. [13]

The situation on the Kurdish front is considerably more complicated. Iran and Iraq have been supporting Kurdish insurgents in each other’s territory while pressing the military campaign against their own Kurds. Iraq, for instance, has supported the Kurdish Democratic Party of Iran under Abdul-Rahman Qassemlu. Iran has supported the Barzani-led Kurdish Democratic Party of Iraq. The major Iraqi Kurdish faction opposed to the Barzanis, the Patriotic Union of Kurdistan (PUK) of Jalal Talabani, has conducted intermittent negotiations with Baghdad for at least the past year. A ceasefire between the government and the PUK went into effect in December 1983, but the expected January 1 announcement of a government of national reconciliation never occurred.

Negotiations with the PUK broke down in January when 16 Kurds — 11 of them PUK members — were executed by firing squad for desertion from the armed forces. Suleimaniya, where the executions took place, was the site two months later, in March 1984, of large demonstrations against conscription into the Popular Army and better terms for Kurdish deserters. (These demonstrations were apparently not organized by the PUK, and in fact it seems that the PUK has largely been cooperating with the government to control the area. This at least is the charge of Iraqi expatriates supporting the uprising.) Troops fired on the demonstrators, killing three. PUK-led negotiations broke down again when the government attacked a second rally, and the PUK responded with a raid on an army garrison. Unrest was also reported in a second Kurdish city, Erbil. The current state of relations between the government and the PUK is not known, although negotiations apparently are continuing at some level. [14] The KDP of the Barzanis, meanwhile, is reportedly operating out of an Iranian-sponsored base in Hajj ‘Umran. [15]

Opposition to the War

One reason that opposition to the war and to the regime generally has been so muted is the divisiveness among the major opposition groupings — communists, Kurds and Shi‘a. The opposition front formed in Damascus around the Iraqi Communist Party includes neither the PUK nor the KDP, and the Iranian experience has patently underscored the limitations of any alliance of communists and fundamentalist Shi‘a. At a popular level, the main grounds of opposition to the government revolve around the war itself, but wartime conditions leave any organized opposition vulnerable to charges of treachery. Whatever difficulties Iraq had been experiencing prior to the war, there was nothing on the scale of the socioeconomic crisis that beset Iran and laid the groundwork for the revolutionary movement there.

Isolated incidents such as car bombings occurred sporadically during the war. The most serious apparently was the truck-bombing of the Ministry of Planning in August 1982, which killed 69 and injured many more. There has been at least one reported assassination attempt against Saddam Hussein, in the town of al-Dujayl in July 1982; parts of the town were razed in collective reprisal. [16] The president, who made well-publicized visits to the front and to the countryside in the first years of the war, grew uncharacteristically reclusive in the summer and fall of 1983, no more the latter-day Harun al-Rashid, even foregoing events like the fifteenth anniversary of the 1968 coup which brought the regime to power. [17]

There is no doubt that this war has hurt Iraq badly, and that its attrition has been political as well as economic. On at least one day last spring, an observer counted more than 60 coffins in an hour move through the Imam Ali mosque in Najaf. By all accounts signs of war and deprivation are relatively few in Baghdad and most other parts of the country removed from the front lines. Basra is the major exception. Officially the city still has 300,000 inhabitants, and no one has fled. Yet empty houses can be seen everywhere, and more than half the shops appear closed. Government offices and establishments like banks are fully staffed; employees there reportedly have been told that if they miss more than three consecutive days of work they will lose their jobs. [18]

There are some signs that opposition to conscription — not just among Kurds — may be a growing problem. In early March 1984, armed militiamen reportedly sealed off several Baghdad working-class districts and went about “recruiting” young men for the so-called Popular Army, which now numbers around 400,000. The Popular Army’s assignments usually involve protecting various installations and strategic sites around the country, freeing up the regular army for combat. About one quarter of the Popular Army, though, are now reportedly backing up regular units at the front. [19] Desertion seems to be a problem among the regular units as well. The road from Basra to Baghdad is studded with military checkpoints, officially looking for terrorists and Iranian infiltrators. But the military police check only the papers of draft-age Iraqis. Witnesses report more than one occasion when young men fleeing a checkpoint on foot have simply been cut down by machine-gun fire. Basra’s cabarets are frequently raided by police looking for deserters seeking anonymity in the dimly-lit clubs. [20] In 1983 the RCC issued a decree forbidding companies from hiring deserters or draft dodgers. For private firms, the penalty is state seizure of the company. [21]

Social and Economic Consequences

Iraq’s war strategy was keyed to insulate Iraqi society from the war as much as possible by minimizing casualties and by maintaining civilian development projects, subsidies and imports at a positively lavish level. The first element proved to be a military handicap, in that it contributed to Iraq’s failure to move decisively to seize key objectives in the opening weeks of the war. The second element could only be sustained as long as it could be financed. On the assumption that the war would be short, the government drew down its accumulated foreign exchange reserves from an estimated $35 billion to perhaps as low as $2 billion by early 1983. It received an additional $25 billion or so from its Gulf allies, mainly Saudi Arabia and Kuwait, in the first two years of the war. In 1981, the country actually increased its non-military imports by $5 billion, although oil exports and revenues had dropped to less than half their pre-war levels. This meant that Iraq was running a trade deficit of nearly $10 billion during the first full year of the war.

This “guns and butter” policy began to change in the spring of 1982. The war was not going well, as Iraqi troops were forced to retreat back across the border. The economic consequences were compounded by Syria’s decision to close the Banyas oil pipeline, thus further reducing Iraq’s export earnings. Saddam Hussein’s first public call for austerity came on April 11, the day after the Syrian move. This was not immediately translated into spending reductions, however. The investment budget remained at the previous year’s level of $23.6 billion. In early 1982 the government was still rushing construction projects in preparation for hosting the Non-Aligned Conference scheduled for that September. (The mayoralty of Baghdad spent $7 billion to refurbish the city during the first two years of the war.) [22] It was not until the fall of 1982 that the government took concrete steps reflecting the severity of the economic crisis it faced. It devalued the currency by 5 percent, reduced the percentage of their salary that foreign workers could convert from dinars to hard currencies from 75 to 50 percent and trimmed allowable remittances for over 1 million Egyptian and other Arab workers in the private sector from 1,000 to 700 dinars per year. Foreign companies reported slowdowns in payments and delays in final acceptance of contracts, as all hard currency expenditures were routed through the labyrinthine bureaucracy of the Central Bank. The trade deficit for 1982 was down only slightly over the previous year, to just over $7 billion, as contracted development projects fell from $20.1 billion to $4 billion.

As Iraq moved into 1983, its financial problems were heightened by the decline in “loans” from its Gulf allies, which had been running at an estimated $1 billion a month. This partly reflected those states’ own attempts to cope with the decline of oil exports and revenues of that period, and partly their unhappiness with the prospect of subsidizing Saddam Hussein’s unimpressive military adventure for the indefinite future. This made 1983 a year of “fragile economic equilibrium,” to use the diplomatic phrasing of the US interests section in Baghdad. [23] State organizations fell increasingly behind in payments to foreign contractors, and prospective contractors and exporters were required to secure their own financing. Week after week the Western economic press repeated foreign contractors’ tales of woe and hard times. Those with the most “exposure” in Iraq were the French, West Germans and Japanese. In many cases those governments stepped in with guaranteed credits, banking politically on the survival of the regime. Payments were deferred and rescheduled into 1985. Arab contractors, who could not resort to credits or guarantees from their governments, were reported to be “flooding” Arab and international banks based in the Gulf to secure financing for their Iraq projects. Their search was largely in vain, despite guarantees from the Iraqi central bank. [24] The major international banks apparently held a similar opinion of Iraqi credit-worthiness: when Iraq tried to raise a $500 million Eurodollar loan in the fall of 1982, five of the eight lead managers ended up being Arab banks. [25]

Though statistics are not available, it appears that Iraq was able to reduce its deficit in 1983 to between $2 and $3 billion. The conventional estimate is that the war is costing $1 billion a month, a very rough order of magnitude at best. The figure is no doubt lower during periods of relative lull, and probably quite a bit higher during major offensives. The government still makes lump sum payments to the families of those killed in the war, though the amount has apparently decreased considerably, to around $2,000 now. Relatives also receive free new cars, small plots of land and interest-free or very low interest loans for building. [26]

It is difficult to specify Iraq’s present economic state. Initial cutbacks of imports were presumably cushioned by stocks on hand; these have now been depleted. Shortages of a number of basic commodities have been reported by many observers, though many items are still plentiful. As one Baghdad resident put it recently, “One day it’s coffee, the next day it’s eggs, but something is always missing.” Visitors in the summer of 1983 reported long lines for gasoline at service stations guarded by armed soldiers. [27] Debts rescheduled earlier will start to come due this year. On the other hand, expansion of the oil pipeline through Turkey, expected to be completed this summer, will increase hard currency export earnings, and other oil export routes are being negotiated through Jordan and Saudi Arabia.

Other economic indicators are equally imprecise. Inflation has been estimated as high as 40 percent during earlier periods, but is now apparently in the 25 percent range. [28] For the first time since it came to power, the government has been forced to raise revenues from the people. It seems to have approached this in the most gingerly fashion. Tax collection procedures have reportedly been tightened up, but at the same time many tax rates have been reduced. [29] New revenue schemes include a state lottery and legalized horse race betting. Duty-free shops and foreigners’ supermarkets have been opened to anyone who can pay in foreign currency. In the summer of 1983, the government launched a campaign to solicit donations in cash, gold jewelry and volunteer overtime work. Deputy Prime Minister Ramadan called the donations a “referendum” on the government’s performance. It seems to have been implemented in the unique democratic tradition of this regime: uniformed soldiers solicit from door to door, and lists of donors are read periodically over the state television to help motivate the recalcitrant. According to one account, “The ability to produce an official receipt for a large contribution is an important asset.” [30] Another story reports that President Hussein’s wife joined the campaign by “parting with heaps of valuables” on television. Rather than enhance the campaign, though, this display led to “widespread public questioning” about how the first couple, both of humble backgrounds, had managed to accumulate such an impressive stash of jewelry. [31] Still another vehicle has been the sale of “Qadisiyyat Saddam” bonds to workers. [32] All of these devices seem to have netted the regime perhaps half a billion dollars in cash and some 4,000 kilograms of gold and jewelry.

Labor Shortages

Of the various shortages that have accumulated from the war to handicap the Iraqi economy, the most significant and far-reaching have been shortages of labor, and skilled workers in particular. For more than a year, the large numbers of men at the front were disguised by many thousands of migrant workers from Egypt, other parts of the Arab world and Asia. In 1982, foreign firms were complaining that conscription of staff was hindering work. The large numbers of expatriate workers, though, represented a foreign exchange drain of about $4 billion in workers’ remittances. This was a major target of the government as it moved to implement its austerity programs in late 1982 and 1983. There was considerable attrition among foreign workers, as large construction and development projects were concluded or wound down after 1982. In the summer of 1983, 60 percent of the expatriate university faculties were dismissed. The government also lowered the percentage of migrant workers’ wages that could be converted into foreign currencies. These restrictions gave additional impetus to the exodus of foreign workers. The number of Asian workers in Iraq fell by an estimated 50 percent in 1983, while the number of Egyptians — the largest group of foreign workers — declined an estimated 30 percent, mainly as a result of remittance restrictions. [33] The number of Egyptians now in Iraq seems to be around one million (including some 15,000 serving as “volunteers” in the Iraqi army). Early in 1983 Iraq negotiated an agreement with the government of the Philippines whereby some 60 percent of Filipino workers’ wages would be in the form of a promissory note to the Marcos regime. There are about 38,000 Filipino workers in Iraq, the largest number of non-Arab foreign workers, mainly in nursing and other medical and technical positions. [34]

Iraq’s severe shortage of labor insures that the economy will depend on significant numbers of foreign workers for some time to come, since it “lacks the skilled manpower necessary to operate and maintain modern plants and facilities now being completed,” and remittances “still probably exceed $2 billion per year, a major burden when Iraq’s hard currency earnings have fallen to $7-8 billion per year.” [35] Recent agreements with foreign contractors have apparently included recruitment of expatriate workers for jobs ranging from construction and operation of cement plants to cleaning the new Saddam Hussein International Airport and al-Shahid, the martyrs’ monument in Baghdad. [36]

Another feature of Iraq’s labor shortage has been the large-scale recruitment of Iraqi women into office and factory jobs. One British contractor observed in the summer of 1983 that young men had become extremely rare in government offices. “Nearly all experienced young men have been drafted,” he said, “and have been replaced by well-qualified, but inexperienced, young women.” [37] According to the General Union of Iraqi Women, women represented 19 percent of the industrial work force in 1980, a proportion expected to reach 28 percent by 1985. [38] In one factory producing electric lamps, half of the 400 workers are now women, and half of the men are Chinese! [39] The Labor and Social Affairs Minister recently noted that his ministry was able to keep within its current budget, thanks to the volunteer labor of 32,000 women. [40]

One specific consequence of the various restrictions placed on converting foreign workers’ remittances has been a flourishing black market in foreign currencies. The official rate of exchange is still $3.10 per Iraqi dinar; the unofficial rate in the spring of 1984 was one dollar. (According to one Iraqi opposition source, an earlier factor in Iraq’s currency decline was the large export of currency to Kuwait by senior Baathist officials following Iraq’s battlefield reversals in the spring and summer of 1982.) [41] In March 1984 there were reports that several bank officials had been executed for currency manipulation in the course of an anti-corruption drive. [42]

The Private Sector

The Baath regime’s depiction of itself as socialist confuses the dominant economic role of the state with the relations of various classes to the means of production. A survey of the period between 1963 and 1978 shows the continuing vitality of the private sector in agriculture, industry and services, particularly in transport and construction. The nationalization of oil in 1972, which took the country’s principal resource out of the hands of “imperialist monopolies” and put it under the full control of the national government, has also had wide-ranging political as well as economic consequences. In particular, it has facilitated the Baath Party’s drive to concentrate power exclusively in its own hands. Within five years (1973-1978), the state’s income from oil rose almost tenfold: by 1976, the contribution of crude oil to total revenues had risen to 87 percent. Thus the state, which for most practical purposes was completely in the hands of Saddam Hussein, emerged more emphatically than ever as the principal focus, and principal agent, of capital accumulation. [43]

It was at this stage, particularly after 1977, that the rift developed between the Baath and the Communists, with whom they had been in uneasy alliance since 1971. Following closely on the regime’s agreement with Iran in 1975, which effectively broke the back of the Kurdish resistance and thus lessened the Baath’s dependence on other political allies, the huge increases in oil revenues facilitated a great enlargement of the Baath’s power. Potential opposition could either be fiercely repressed — as with the Communists, the Shi‘i opposition groups and the Kurds — or, far more easily, bought off with wage and salary increases, very low cost loans for land and housing, scholarships in Iraq and abroad and, particularly important, constant improvements in pay and working conditions for the military and security services.

The regime could finance this political base-building thanks to the almost unlimited funds available for all kinds of educational, welfare, industrial and other capital projects. Although the benefits of oil revenues were far from equally distributed — the poorer quarters of Baghdad suffered from housing shortages and poor transportation services, and the situation in the countryside was substantially inferior to that in the cities — there is little evidence of any widespread economic discontent in the period before September 1980. According to recent visitors to Iraq, the government appears to have given special attention in its domestic spending to improving living conditions in rural areas. Madinat al-Thawra (now Madinat Saddam), a poor Shi‘i quarter in Baghdad where the al-Da‘wa al-Islamiyya had a strong base, has also received government investment funds over the past several years.

In fact, the regime’s policies, by accident or design, have tended not only to blunt the edge of potential opposition but also, as Isam al-Khafaji has shown, to facilitate the emergence of significant new social groups with vested interests in the maintenance of the political and economic system. Such groups are active participants in the economy, and are by no means restricted to the “bureaucracy,” even in the broadest sense of the term.40 Thus economic opportunities burgeoned initially in the construction and services sectors, [44] particularly in the interstices of large development projects involving foreign firms, where local contractors and subcontractors were able to play important intermediary roles. In general terms, the private sector was expanding at least at the same rate as the public sector until 1978, the last year for which full national statistical tables are available. [45]

Although official statistics are not available to chart developments since the war broke out, all signs are that this tendency has continued unabated. As of 1981, according to the Iraqi Federation of Industries, half the firms and 57 percent of invested capital in the private sector were in construction and associated industries; 20 percent of invested capital was in food industries, with textiles, leather and printing industries following in that order. [46]

What seems to have changed under the impact of the war, and with the encouragement of the government, is a shift from quick return investments in property and real estate to light and medium industries. The government decreed a revised industrial investment law in December 1982 (Law 113 of 1982) raising the dinar ceilings for private sector investments and increasing tax benefits, particularly for joint stock companies. Mixed-sector companies reportedly achieved record production figures in 1983. [47] One factor no doubt was the cutback in non-essential imports as a result of the financial strains caused by the war, placing more reliance on local production of consumer durables, other commodities, and services. At the beginning of 1984, the government announced that budget allocations for the private industrial and trade sectors would increase by 171 percent. “We believe this increase will play a positive role in the development of the private sector’s participation in the process of production of essential commodities,” said Trade Minister Hasan ‘Ali. [48]

‘Ali also stated that in December the government had signed 300 contracts with private Iraqi and other Arab firms to invest in agricultural development. This attention reflects the rather dismal performance of the agricultural sector in recent years, when increasing yields per hectare have been offset by declines in total cultivated area. Food imports account for an estimated 15 percent of total imports. [49] Private holdings have always been a prominent feature of Iraq’s agrarian reform experience. Over half of all holdings were privately owned in 1973, and much of the remainder rented. In the last few years, between 70 and 80 percent of the loans provided through the Ministry of Agriculture and Agrarian Reform went to private interests. Law 35 of 1983 permits leases of up to 4,000 hectares to private individuals.

This emphasis on the private sector has not been confined to the realm of production. Farmers no longer are required to belong to or to market through agricultural cooperatives or state farms. They are now allowed to sell direct to public sector or private wholesale markets. As of June 1983, 80 percent of the wholesale markets in Baghdad had been leased to private traders. [50] Late in 1983 the government issued licenses to private merchants authorizing them to import food products up to $16,000 worth each. [51]

In the services sector, one area where the government has encouraged “privatization” is in health care. According to one recent report, “treatment is already available — to those with the money — from several private hospitals and clinics, and more incentives have recently been introduced for private-sector health care.” [52] Law 25 of 1984 allows groups of at least four doctors with a minimum of 15 years experience each in the public sector to set up private hospitals eligible for government-backed loans of up to $1.6 million, free land title and three years’ income tax exemption. By one account, the government is not so much initiating a new direction as recognizing that private medical practice is thriving, to the point where “90 percent of doctors moonlight and earn enormous fees in private practice.” [53] All of this leads us to speculate on the prospective title of Majid Khadduri’s next installment of his running political chronicle: Will Free Enterprise Iraq succeed Socialist Iraq as Saddam Hussein takes his place as the Pinochet of the Arab world?

The War in Perspective

Iraq’s wartime experience in the economic sphere, as in the political sphere, seems to have accentuated certain basic tendencies that had become apparent in Iraqi society prior to 1980. The same can be said of Iraq’s foreign policy, both in the region and internationally. Iraq’s increased dependence on the financial favors of its Gulf neighbors will outlast the war, as will its reliance on the Western industrial states — France, Germany, Japan and the US — to help reconstruct and expand the country’s economic infrastructure. This in turn will most likely continue to be reflected in Baghdad’s accommodating “moderation” on issues like Israel and Palestine as well as other regional questions. In virtually every respect, this war has had the effect of integrating Iraq more inextricably into the world market, increasing its dependence on both its richer Arab neighbors and its major trading partners of the West (and Far East). In much the same way that Anwar al-Sadat’s infitah can be traced to the years before Nasser’s death, so too Iraq’s position after nearly four bloody years of war, destruction and unprecedented carnage represents an acceleration of trends and tendencies that had become apparent at least as far back as a decade ago.

The regime’s continued hold on state power will depend crucially on the outcome of the ground war. To this point, Saddam Hussein, like his adversary in Iran, has used the war to solidify his base and enhance his legitimacy. It is difficult now to anticipate the possible medium and long-term consequences of the war for Iraqi society, except to observe that it has been a profound and traumatic watershed in the evolution of that country, the repercussions of which will be felt for years to come.


[1] Middle East Economic Digest, October 22, 1982.
[2] Philadelphia Inquirer, March 11, 1984.
[3] Amnesty International, Report and Recommendations of an Amnesty International Mission to the Government of the Republic of Iraq, January 22-28, 1983 (London, 1983), p. 21.
[4] Middle East Currents (London), January 6, 1982.
[5] The treaty is reproduced as Appendix E in Majid Khadduri, Socialist Iraq: A Study in Iraqi Politics Since 1968 (Washington, 1978).
[6] Arab Economist, May 1982.
[7] Especially in Najaf and Karbala; see Middle East Economic Digest, April 9, 1982.
[8] One feature of Saddam Hussein’s demagoguery which he shares with the Ayatollah is a fondness for invoking “an international Zionist conspiracy.” “Had it not been for the noble Iraqi army,” he declaimed in January 1983, “our land in this region would have been an arena of Persian, Zionist and foreign troops…. This war is…an international Zionist conspiracy aimed not only at Iraq but at the entire region.” BBC Summary of World Broadcasts, January 8, 1983.
[9] Washington Post, July 30, 1984.
[10] Guardian, November 24, 1983.
[11] Al-Rafidayn, an opposition newspaper published in London, reported that 25 young men were executed in Baghdad and 150 in Falluja for refusing to go to the front. February 25 and March 23, 1984.
[12] Newsweek, August 22, 1983.
[13] Guardian, June 28, 1983.
[14] Ibid., December 29, 1983; March 16 and May 24, 1984.
[15] Washington Post, March 27, 1984.
[16] Economist, January 29, 1983.
[17] Newsweek, August 15, 1983; Guardian, November 7, 1983.
[18] Philadelphia Inquirer, March 20, 1984.
[19] Le Monde, translated in Manchester Guardian Weekly, April 29, 1984.
[20] Philadelphia Inquirer, April 1, 1984.
[21] Middle East Economic Digest, April 29, 1983.
[22] Foreign Economic Trends, February 1983. This report is prepared annually by the US interests section in Baghdad and published as part of an International Marketing Information Series by the US Commerce Department. The 1984 edition incorrectly identifies the interests section as “American Embassy Baghdad.”
[23] Foreign Economic Trends, April 1984.
[24] Middle East Economic Digest, April 29, 1983.
[25] Financial Times, October 3, 1983.
[26] Le Monde, translated in Manchester Guardian Weekly, May 6, 1984; The Middle East, June 1984; Guardian, January 6, 1984.
[27] Washington Post, August 2, 1983.
[28] Foreign Economic Trends, April 1984.
[29] Ibid.; Middle East Economic Digest, March 4, 1984.
[30] Financial Times, December 9, 1983.
[31] Christian Science Monitor, August 3, 1983.
[32] Middle East Economic Digest, May 11, 1984.
[33] Foreign Economic Trends, April 1984.
[34] Financial Times, October 3, 1983; Middle East Economic Digest, March 11, 1983.
[35] Foreign Economic Trends, April 1984.
[36] Middle East Economic Digest, April 20, 1984.
[37] Middle East Economic Digest, August 5, 1983.
[38] Middle East Economic Digest, September 9, 1983.
[39] Middle East Economic Digest, September 16, 1983.
[40] Al-Anba’ (Kuwait), April 12, 1984; in Foreign Broadcast Information Service, April 17, 1984.
[41] Middle East Currents (London), October 26, 1982.
[42] Washington Post, March 24, 1984.
[43] Marion Farouk-Sluglett, “‘Socialist’ Iraq, 1963-1978: Toward a Reappraisal,” Orient 23/2 (June 1982), p. 216.
[44] For an interesting discussion of the category of bureaucracy, see Hugh Roberts, “The Algerian Bureaucracy,” in Talal Asad and Roger Owen, eds., Sociology of Developing Societies: The Middle East (London and New York, 1983), pp. 95-114.
[45] The number of building permits rose from 30,000 in 1968 to 167,000 in 1980. Isam al-Khafaji, al-Dawla wal-Tatawwur al-Ra’smali fil-‘Iraq, 1968-1978 (Cairo, 1984), p. 72.
[46] Marion Farouk-Sluglett, op. cit.
[47] Middle East Economic Digest, April 29, 1984.
[48] Middle East Economic Digest, May 11, 1984.
[49] Middle East Reporter (Beirut), January 14, 1984.
[50] Middle East Economic Digest, August 12, 1983.
[51] Ibid.
[52] Middle East Reporter (Beirut), January 14, 1984.
[53] Middle East Economic Digest, April 20, 1984.

How to cite this article:

Marion Farouk-Sluglett, Peter Sluglett, Joe Stork "Not Quite Armageddon," Middle East Report 125/126 (July-September 1984).

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