Kuwait Diary

Kuwait Diary -- April 20th, 2003

Dear readers,

I started writing this diary on March 20th, 2003 just after the early morning ‘decapitation’ strikes on Baghdad. Today, on April 20th, 2003, I am entering the last regular update on this diary, with a bit of analysis. I am glad to have lived through the worst of it in Kuwait. I am glad to be alive and still kicking. Those bloody missiles flying overhead did make a huge noise. I may enter another piece at a later date, but unless some earth shaking developments take place, this is it. Finally, my wife came back from India yesterday, now that it's safe and the missiles have stopped flying. I really didn’t think that I’d miss her so much. God, I really did. Writing this diary kept me going for a while and so did the wonderful support from readers. My dangerous bachelor days are over. Yaay!

In terms of human lives, the coalition lost 156 soldiers, while the Iraqis lost some 1650 soldiers. An estimated 2700 civilian lives have been lost and around 5000 civilians have been seriously injured or wounded. 18 news reporters or camera crewmembers have died in the line of duty. In all, an estimated 4500 people lost their lives in this war to remove one awful dictator and 54 of his henchmen, now immortalized on playing cards. While the military has been congratulating themselves on the relatively small number of losses, the US administration will only be fooling themselves if they believe that this is a small, one time cost.

While conciliatory gestures are being made, there are wide divisions in critical organizations, which keep the world stable. NATO is split, the United Nations is split, the European Union is split and the Arab world itself is deeply divided. There are a small number of Arab countries that have supported the US (though officially, none have supported the war). These are the wealthy states of Kuwait (which Saddam had invaded in 1991), Saudi Arabia, UAE, Qatar and Bahrain. As we will discuss later, the Saudi want the US off its territory. The rest of the Arabs, from Egypt to Jordan, from Syria to Iraq, want the US out of the region immediately.

If you were in Baghdad, and had survived after the most awesome bombing of the first war of the 21st century, if you didn’t have electricity and water for 2 weeks, if your money and savings had become worthless, if you didn’t have a job, if your home had been ransacked by arsonists, if your history of ten thousand years had disappeared overnight from the national museum, if the only official building untouched in the bombing and arson was the ‘oil ministry’ building, and, God forbid, if your children had lost life or limb, then you wouldn’t really be a well-wisher of the occupying forces, would you?

Dictatorships are easier to have one-to one-relationships with. As the US found out in Turkey, collective decision making out of a democracy is far tougher to control. Even if better sense prevails and the US wants to get out of Iraq quickly, they will not be able to, without running the risk of a hostile Islamic state sitting in a critical region. So, Jay Garner the US administrator will stay on and administer the country. The Iraqis are out on the streets protesting US occupation (liberation is a word hardly being used). The newsreaders on CNN and some other networks are happy to see that “the Iraqis are using their first taste of freedom of speech, to launch protest marches.” That seems to be an end in itself. The raw anger and rage behind these protests are going unnoticed. Anger is beginning to explode like a mushroom cloud. The US defense department is circulating pictures of Iraqis embracing the US troops and the propaganda war continues. The Arab states that supported the US, are at the receiving end of Arab wrath. A friend told me yesterday, “If you feel unloved, lonely, depressed, guilty and have a sense of paranoia surrounding you, then you must be a Kuwaiti.”

There were bigger geopolitical issues behind this war than, as some would believe, the need to simply control oil resources. Anyone who has operated in the financial market knows how predators zoom into under-performing companies, do a structured buyout and then turn around these companies either for a massive profit or asset stripping. The bottom line is that the target-entity needs to have a future stream of earnings potential. Iraq, with its second largest oil reserves in the region, certainly has this potential. Even operating at 40% of potential capacity, it can easily generate (if allowed without sanctions) US$ 25 billion per annum. So, unlike Afghanistan, which is being fast forgotten, Iraq has the money, baby!!

On the other hand, the US and most European countries and Japan are in the midst of a major recession with the highest rates of unemployment ever recorded. Japan has had 11 consecutive years of recession. Only the Asian countries of China and India are growing above 6% per annum. The devastation of Iraq is a golden opportunity to sell reconstruction goods and services, paid for by Iraqi oil revenues. So war is supposed to kick-start US domestic and International demand, paid for by Iraqi oil revenues, controlled by an interim US Administration. Under it, Iraq will sell its oil to the world markets. This is what you really heard when they said that Iraqi oil is their own and money from oil sales will better Iraqi lives.

In reality, the revenues from the sale of oil will pay for the reconstruction services offered by the coalition countries, thereby creating profits for companies and jobs for the supplier countries and subcontractors. The total cost of reconstruction is some US$250 billion, including the cost of this war which is around US$ 30 billion. Thus at a revenue stream of US$ 25 billion per year, it will take around 10 years for Iraq to pay back the reconstruction cost. Obviously lenders like the World Bank, Gulf cooperation council and other country and world bodies will need to get involved. Also, as is well known the old concept of ‘tied aid’ will operate. Thus any US AID money that goes into Iraq, will have a tied ‘buy American’ clause attached. The Bush Administration reminds people, this is US tax payer money and this ‘should’ be tied to US goods and services. Well, if this war had not taken place, then there would have been no devastation of a country and US tax payers would not have been required to contribute to its reconstruction. A real Catch 22 situation it is, isn’t it?

There is a further US$ 300 Billion of previous debt owed to countries like Russia, France, Germany and even India for work performed before the first gulf war. If Iraq uses its oil revenue to also repay some of this debt, then as a country, Iraq will be indebted for a long time to come. But, while the US was never involved with the lucrative Iraqi economy in the past, it may turn out to be the sole contract supplier in the present scenario. Both Britain and Australia, strong coalition partners, see themselves being let down badly. While many in Britain are reconciling themselves to the stranglehold on reconstruction contracts by friends of the US defense department, by keeping up a brave face, the famous British stiff upper lip and saying that they want no part in the ‘tainted’ contracts, the Aussies have already seen some protests at home, not only on issues of the reconstruction contracts, but in existing trade contracts as well.

According to news reports, Australia and the United States, the staunchest of allies during the war in Iraq, are shaping up for a hotly-contested trade battle over rebuilding the war-ravaged nation. Trade issues are expected to be high on the agenda when Prime Minister John Howard visits Bush's Texas ranch early next month to discuss the post-war Iraq. Howard has been urged by Australian businesses to seek assurances that US firms will not receive preferential treatment on rebuilding contracts and issue a "hands off" to US farmers intent on taking a share of Australia's lucrative wheat market in Iraq. Howard had said earlier this month that his government's approach to reconstruction would proceed "with a very clear eye to Iraq's long-term future, but also to our national interest in terms of peace and security and commercial interests".

Australian Trade Minister Kark Vaile was more blunt. "We are prepared to compete with the Americans," he said. "When there is an interim administration established, and then ultimately an Iraqi administration, we just expect to see a fairly operating market." The direct implication is that it is not expected to be very fair just now, under the US interim administration. So much for friendship!

With victory secured and the role of the United Nations in the rebuilding process still unclear, US Commerce Secretary Donald Evans said all coalition countries should be able to play a role in rebuilding Iraq. But opposition trade spokesman Craig Emerson said it was clear Australia would face an uphill battle to win Iraqi contracts over US rivals. The main bone of contention is Australia's 800 million dollar a year wheat export market in Iraq, which Australia argues US growers are muscling in on under the guise of providing aid.

"We have been concerned about the US's use of a mixture of aid and commercial services to break into new markets," Agriculture Minister Warren Truss said. "We would expect the US to respect the markets that we have in Iraq." Alan Tracy, president of American wheat lobby US Wheat Associates, was unrepentant, promising the Australians a tough battle in the Iraqi market.
"When that time comes, hopefully sooner rather than later, the US will cede the market to no one," he said.

"Australian wheat growers have been exporting to Iraq for more than 50 years. They have put a lot of effort into building and securing a significant market for their wheat in Iraq and the Gulf region," he said. "The US has never exported significant quantities of wheat to Iraq but undoubtedly there will be pressure from the US farm lobby to get American wheat into Iraq." Vaile said he expected a level playing field for more than 200 firms that have already lodged expressions of interest with aid agency Aus-Aid for war rebuilding in Iraq, many in the construction and oil industries. Australia has said it wants responsibility for Iraqi agriculture under the transitional authority being set up by the coalition partners, which would place it in a powerful position to protect its markets.

As the dust settles on post-Saddam Iraq and reveals a new security landscape in the Gulf, a key question for the United States is whether it should maintain or withdraw its forces in Saudi Arabia. Even before the war, the Saudi royal family, uneasy about a fundamentalist backlash in the kingdom, let it be known through leaks to the New York Times that it expected US forces to leave once the fighting was over. Indeed, the most compelling rationale for keeping US troops in Saudi Arabia, the threat posed by a belligerent Iraq, was swept away last week in the collapse of the regime of Saddam Hussein. The 12-year-old Operation Southern Watch, the centerpiece of the US military presence in Saudi Arabia, became an overnight anachronism.

US air forces still use Saudi Arabia's Prince Sultan Air Base (PSAB) to fly missions in support of US forces in Iraq. It's two-year-old command center directs air operations in an area where there is still sporadic combat. But with no hostile border to guard and no no-fly zone over southern Iraq to patrol, the US air forces in Saudi Arabia no longer have a clearly defined mission. The base also is a reminder of their tenuous position in the kingdom. The US military withdrew to the super-secure installation after a 1996 terrorist truck bombing that devastated a military housing complex near Dhahran killing 19 airmen. More than 10,000 US military personnel were in Saudi Arabia during the war, operating mainly from Prince Sultan Air Base but also at locations along the border. Before the war, there were about half that number, a small presence that cast a giant shadow over US-Saudi relations.

Their departure would help resolve Saudi Arabia's deep ambivalence about having foreign troops on its soil, and steal some thunder from Saudi exile Osama Bin Laden's terrorist crusade against the United States. A study released this week by the Rand Corporation, a think tank with ties to the US Air Force, noted that the US military presence not only in Saudi Arabia but throughout the region has become 'a lightning rod for political discontent'. "This generalized discontent, which is focused on existing regimes and the United States, threatens remaining US allies, especially Saudi Arabia, in ways that the US strategy of military presence plus reinforcement cannot address." Moves toward political reform in Saudi Arabia and Iran may offer an opening to move away from the heavy reliance on US military force.
Iraq's neighbors, led by Saudi Arabia, told the United States yesterday at an Arab council meeting, to get out of the country and keep its hands off Iraqi oil. Ministers of Iraq's immediate neighbors Turkey, Iran, Kuwait, Saudi Arabia, Jordan and Syria, as well as Egypt and Bahrain, said the United States had to restore order and then leave so that Iraqis could form their own government. They issued a joint statement in Riyadh opposing a US call to lift UN sanctions on Iraq and said Baghdad must be allowed to have a government of its own first.

The ministers said they wanted the United Nations to play a central role in post-war Iraq, echoing similar demands made by European Union leaders at their summit in Athens last Thursday. Among those was Washington's key European ally Britain.

"The Iraqi people should administer and govern their country by themselves, and any exploitation of their natural resources should be in conformity with the will of the legitimate Iraqi government and its people," Saudi Foreign Minister Prince Saud al-Faisal said early on Saturday, reading from the statement. The late-night meeting was held against the backdrop of protests in Baghdad as thousands of demonstrators poured out of mosques on Friday demanding the United States leave the country.

"If what they (United States) intend is the exploitation of Iraqi oil, it will not have any legitimate basis," Faisal said.

Washington has called for a quick end to the 12-year-old UN economic sanctions, imposed after Iraq invaded Kuwait in 1990, so that oil sales can fund reconstruction. Lifting sanctions threatens to trigger another diplomatic tussle as it raises the issue of who controls Iraq's oil sales (it is now the UN through the Food for Oil progrm), and so effectively runs the country.

A belief that Iraqis would accept only a US leadership role was at odds with feelings on the streets of Baghdad on Friday when Muslims poured on to the streets, calling for an Islamic state to be established. It was the biggest protest since US forces ended Saddam's harsh three-decade rule. This is a really scary prospect if allowed to happen. Carrying Korans, prayer mats and banners, masses of Iraqis marched in a protest that organizers said represented both Iraq's majority Shiite Muslims and more powerful Sunnis. "Leave our country, we want peace," read one banner. "No Bush, No Saddam, Yes, Yes to Islam," read another. The situation is about to take one more unpredictable turn and the US has to play its cards really well.

Finally, the primary reason for having a devastating and terrible war as a solution to the Iraq dilemma, was the presence of weapons of mass destruction, chemical and biological, the chemical agents for which had been supplied by British and US companies to Saddam in the first place, after Saddam had been set up by the then US administration to counterbalance the results from the overthrow of the US' staunch ally, the Shah of Iran. And, Iran became an Islamic state.

So this war still has to be morally justified. Rumsfeld’s top priority is to send a 1000 strong US team to find WMDs. However, these plans are being challenged by the United Nations' chief inspector Hans Blix. The Pentagon wants its own "Iraq Survey Group" of military personnel, U.S. government intelligence analysts, civilian scientists and private contractors to look for any illegal weapons sites. But Blix wants his team to return, saying it would increase the credibility of any weapons discoveries. He withdrew the U.N. team days before the war started. Blix told the BBC, "We would be able not only to receive the reports of the Americans and the Brits of what they have found or not found, but we would be able to corroborate a good deal of this. "The world would like to have a credible report on the absence or eradication of the program of weapons of mass destruction."

George W. Bush wants the immediate lifting of U.N. trade sanctions on Iraq, imposed in 1990 after Iraq invaded Kuwait. But this may not happen until the U.N. Security Council declares Iraq free of weapons of mass destruction. Rumsfeld says it will take Iraqis coming forward with information before such weapons turn up. Not finding these weapons will be a huge embarrassment for Mr. Bush. The dynamics of the UN security council, which has the power to lift sanctions, will be interesting to watch. Will it lift sanctions if WMDs are not found? If sanctions are not lifted immediately, the US interim administration in Iraq cannot sell oil in the world markets. Another bout of political wrangling therefore, is around the corner.

Are we surprised? This is what the war was waged for in the first place. Too bad that civilians, women and children had to die. To bad, that Ali has lost both his arms and will live as a vegetable for the rest of his life. Too bad that 10 000 years of the history of world civilization has been wiped out. To the military planners, all this was acceptable. It’s collateral damage after all. For many of us, there may have been another way. Will the lessons ever be learned? I will go back to the quote I started this diary with, “Victory acquired by battle is inferior. Victory achieved by battles is not spoken of highly by the wise.” When the fog of patriotism clears and the misplaced thirst for revenge is satiated, when the victorious soldiers are back into the arms of their friends and families, perhaps better sense will prevail. At least till the next time.....