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Igniting Iraq’s Invasion of Kuwait – Loans, Land, Oil and Access

Iraq invaded Kuwait on August 2, 1990 largely for economic reasons, but the contiguous Gulf countries had long-standing territorial conflicts as well. The decision to attack was based on the need to erase Iraq’s massive debt: Iraq had largely financed its 1980-1988 war with Iran through loans and owed some $37 billion to Gulf creditors by 1990. It argued that Kuwait and the United Arab Emirates should consider the loans as payments to Iraq for protecting the Arabian Peninsula from Iranian expansionism, but they refused to forgive the debt.

At the same time, Iraqi leader Saddam Hussein accused Kuwait of over-producing crude oil for export and depressing prices, depriving Iraq of critical oil revenues, and of slant drilling into the Rumayla field on the shared border. After Kuwait refused to cancel the debt, Saddam threatened to reignite a long-standing quarrel over ownership of the strategically important Bubiyan and Warbah Islands, demanding that Kuwait cede control of the islands to Iraq. This was the latest in a continuum of territorial disputes: previous Iraqi rulers had claimed that Kuwait itself was historically part of Iraq and not an independent nation.

American diplomats viewed the contentious relationship between Iraq and Kuwait – one impoverished but militarily mighty, the other rich but weak – in the years leading up to the invasion. As an Economic Officer in Kuwait City from 1966-1969, James Placke came to appreciate the impact of Kuwait’s past as a British protectorate. While serving as the Deputy Director of the Northern Gulf Desk at the State Department, Joseph McGhee observed Iraq’s historical grievances against Kuwait.

Deputy Chief of Mission in Kuwait Walter McClelland and DCM in Baghdad Joseph Wilson witnessed the fractious relationship between Kuwait and Iraq that lead up to the invasion. Charles Stuart Kennedy interviewed all of them: Placke in July 2001, McGhee in August 1997, McClelland in November 1995 and Wilson in January 2001.

To read more about the Gulf War, April Glaspie and the start of the Iraq warthe Arabian Peninsula, or other economic conflicts, please follow the links.


 “Now was the time to reestablish rightful Iraqi control”

James Placke, Economic Officer, Embassy Kuwait City, 1966-1969

Kuwait had run its own internal affairs for a long time, but Britain still had responsibility for security and foreign affairs. As part of the whole decolonization around the world, they gave Kuwait its independence and helped them develop and adopt a constitution and had a great deal to do with shaping the way the country is organized today.

I can remember the Iraqi tanks being loaded on flat cars in Baghdad to go south to “liberate the lost province” [Kuwait] in 1961. The Kuwaitis of course immediately appealed to Britain who had just left to come back and save their bacon, or rice in this case. All it took was one paratrooper battalion which the British sent back and that was enough to turn the Iraqis off.

But the notion that Kuwait is rightfully part of Iraq is not a new one; it didn’t originate with Hussein. It’s been there for many decades and indeed now generations and it’s still there and I’m sure that we haven’t heard the last of that controversy.

[Kuwait was] a small, essentially politically and militarily weak state in an Arab environment where Pan-Arabism was the ideology of the day to which they subscribed vociferously to try to identify with the larger Arab world. They used two things: they used international politics and money to try to cement their independence.

Politically they joined every organization that would have them. They joined the GATT [General Agreement on Tariffs and Trade] for example. I’m not even sure they knew what the GATT was, but they joined it. They joined every conceivable international organization to legitimatize their independent identity. They used their financial resources to give as many of the other influential states in the region as possible a stake in their continued independence and welfare.

The loans — of course with no expectation that they would ever be repaid — went to Egypt particularly, to Syria, to Jordan. Egypt and Syria especially, who were the then-leaders of the Arab world and who were on the outs with Iraq… They internationalized themselves in a way that was unique, but they adapted to their circumstances and it worked. It worked for a long time, until the invasion of 1990.

“Iraq to this day never has dropped its claim that Kuwait should be part of Iraq”

Joseph McGhee, Deputy Director, Northern (Persian) Gulf Desk State Department, 1989-1991

MCGHEE: There were, historically, problems with Kuwait. Under the Turkish Empire, Mesopotamia was ruled from Constantinople in two big chunks. One of them was in the north and was ruled from Baghdad and the other was in the south and was ruled from Basra. Kuwait was part of that southern chunk.

It became independent after World War I when the British took over the mandate from Mesopotamia. They chose to build up the ruling family in Kuwait, the Sabahs, basically because of their preference to rule whenever possible through the local elite.

At the time Kuwait gained independence in the 1960s, the Iraqis (Iraq had been quasi-independent before that) were adamantly opposed to it from the very beginning. They claimed that Kuwait was historically part of Iraq and should continue to be part of Iraq. In fact, shortly after Kuwaiti independence the British had to put in troops and sent a couple of destroyers to Kuwait City to keep the Iraqis from moving in.

In the ‘70s there was a dispute over oil, in the course of which the Iraqis moved south and occupied several oil fields in northern Kuwait. They pumped oil out of them for four or five years before finally giving them back to the Kuwaitis in return for a cash payment. There was a long history to this dispute.

I would say that at the time, in ‘88 and ‘90, it appeared to be rather quiet because, among other things, the Kuwaitis had actively financed the Iraqi war effort against Iran to the tune of some ten billion dollars in loans paid out of Kuwaiti oil revenues.

There were disputes that grew out of this. Notably, a number of the Arab countries that had helped pay for Iraq’s war effort against Iran had written off their loans to Iraq, but the Kuwaitis for reasons of bookkeeping and plain old bloody-mindedness refused to write them off. They were trying to hold the Iraqis’ feet to the fire over putting together some sort of repayment schedule for this.

This was an irritant, but when you looked at the situation in the fall of ‘89 and early in 1990 that’s all it seemed to be, an irritant. After all, when Iraq was in dire shape the Kuwaitis had come through with money if not with other wherewithal. All in all, the relationship seemed to be somewhat better than usual although Iraq had never, and to this day never has, dropped its claim that Kuwait should be part of Iraq.

[The Iraqis had previously] seized some oil fields and pumped oil out for their own use. Over time they had negotiated with the Kuwaitis and they left. There was this possibility out there [that this was why Iraq appeared to be preparing to engage in military action] because there was a specific precedent for it. They had done this before and there was some thought that maybe this was what they were going to do again: just grab a couple of oil fields, intimidate the Kuwaitis, pump the oil out and then leave somewhere down the road.

“Kuwait was located over an enormous oil field that no one knew about at the time”

Consul General Walter McClelland, Deputy Chief of Mission, Embassy Kuwait City, 1970-1974

MCCLELLAND: Iraq and Iran were always threats to Kuwait. Not many years ago Kuwait was just a walled city, a small sheikhdom, that the British carved out when they were trying to bring peace to the area. It just happened that Kuwait was located over an enormous oil field that no one knew about at the time.

So Iraq has always considered Kuwait as one of its provinces — and the Iraqis would announce this from time to time. Then there would be heightened tension, borders would be closed, etc. It was only talk when I was there, but it kept the Kuwaitis — and us — a bit nervous.

The “boundary” is only a disputed imaginary line in the desert. When Iraq finally did attack Kuwait, it had clearly been a possibility for a long time. Iran is also very close, just on the other side of the Shatt-al-Arab. The Persians always hated the Arabs and vice versa, so we always felt that Iran would like to take over Kuwait; however, the threat was not quite as direct, and Iraq was somewhat in the way.

Until maybe a day or two before the invasion, the CIA was saying they did not think that the Iraqis had any intention of crossing the border, despite major force movements toward the border region. In the last day or so, some of the people in the agency started to say they believed the Iraqis would go across.

Even then, the belief still was that it would be a shallow incursion aimed at taking control of the oil field along the border. There’s an oil field that lies on both sides of the Iraq-Kuwait border. The latest CIA coordinated intelligence view before the invasion was that the Iraqis aimed to gain full control of that oil field, and perhaps two islands that are between the two countries.

The Iraqis had long felt these islands, tiny Warba and the larger Bubiyan, blocked their free access to the Gulf. This result would be one of those things that seemed awful, but what could be done about it?

Could you get an international coalition and other measures, including Congressional support, to save Bubiyan Island for the Emir of Kuwait? Merely by asking the question, you knew the answer would be negative.

“Later he was known as the Butcher of Kuwait”

Joseph Wilson, Deputy Chief of Mission, Embassy Baghdad, 1988-1991

WILSON: They were drilling from Kuwait territory into oil that Iraq thought belonged to it, across the border basically. Iraq was looking at its southern frontier. It realized that it was going to be a long time, if ever, before it could use Basra again as its principal outlet to the Gulf, despite the fact that it had built a huge port facility in a place called Um Qasr, which was maybe 20 or 25 miles to the west of Basra situated on a very narrow part of the Gulf.

At the other side of this narrow strip of Iraq was Kuwaiti territory, and at the opening to the Gulf stood two islands – Bubiyan (seen left) and Warba. The Iraqis wanted Kuwait to give the Iraqis the right to garrison troops on that side of the outlet to enhance their security of the port and access to the Gulf.

This all came to a head in July when the Iraqis sent a delegation either to Jeddah or Riyadh to meet a Kuwaiti delegation to negotiate an agreement on all outstanding issues. The Iraqis sent down Ali Hassan Al-Tikriti, who was known for overseeing the gassing of the Kurds in the north – he was called “the Butcher of Kurdistan.” Later he became known, when he was the temporary governor of the “19th Province,” i.e., Kuwait when it was annexed to Iraq, as “the Butcher of Kuwait.”