Global Intelligence Update August 17, 1999
New Government to Break Iraqi Embargo?
Summary:
Reports are mounting that Iraqi President Saddam Hussein may be preparing to step down, thus paving the way for the removal of sanctions against Iraq. He does not particularly need to go, as he is quite effective at breaking UN sanctions. However, his would-be partners would prefer to do business above board, and may be urging him to retire. It's a win-win deal for all involved, from Russia to Iraq to the U.S. All that remains is for Saddam to figure out how to frame retirement as his last great victory.
Analysis:
Qatar's Al-Jazeera satellite television on August 16, citing other press reports, said that Hussein will form a new government within the next few days composed primarily of technocrats. The television station added that he plans to choose current Finance Minister Hikmat al-Azzawi, who was appointed deputy prime minister two weeks ago, as Iraq's new prime minister. It also reported that Azzawi has held talks with a number of university professors - some of whom are from outside the Baath Party - to seek their help in running technology and economic ministries. The reported goal of the new government is to solve Iraq's economic and social problems and to improve relations with other Arab states. The most startling part of the report, however, was the claim that most of the ministers in the new government will be new, with veteran members, such as Deputy Prime Ministers Tariq Aziz and Muhammad Hamzah al-Zubaydi playing no part in the new government.
While there is no confirmation of the report out of Iraq, it does come on top of multiple reports that Saddam has been shuffling top security positions [ http://www.stratfor.com/MEAF/commentary/m9908112100.htm ] and grooming his youngest son Qusay to replace him [ http://www.stratfor.com/MEAF/commentary/m9908062000.htm ]. This could be nothing more than an ongoing and massive U.S. psychological operation (PSYOP) aimed at unnerving the Iraqi leadership. The Qatari report did accompany a denial, by the Iraqi Culture and Information Minister, that a recent uprising in the Iraqi military had been forcefully put down, with a number of officers killed. Reports that Qusay is now heir apparent were denounced by Saddam's older son, Uday, though he was notably alone in that denial. However, despite Uday's denials and yet another in a string of rumored coup attempts, it seems that Saddam is pursuing a new strategy to break the impasse in Iraq's international relations. Evidence is building that Saddam may just be serious about stepping aside.
In 1997, Al-Azzawi, in what even the Iraqi News Agency (INA) described as a rare public appearance, announced a new Iraqi policy of opening up unofficial trade channels, based on the fact that there seemed to be no end in sight to the UN-imposed sanctions. Apparently, this policy seems to have worked. Since mid-1998, there have been numerous reports of rampant sanctions busting. Iraq has recently announced a plan to massively increase oil exports, something impossible without substantial foreign investment in oil production and infrastructure development. But Iraq has already apparently received aid on the infrastructure- development front [ http://www.stratfor.com/MEAF/commentary/m9908170057.htm ], and is pushing ahead with negotiations with prospective production partners as though the UN sanctions were already lifted.
The UN cannot lift sanctions on Iraq without the approval of the U.S. Washington, in turn, cannot allow the sanctions to be lifted because - regardless of the status of Iraqi arms production - it has so demonized Saddam Hussein that it simply cannot normalize relations with the Iraqi leader. As far as Saddam is concerned, there is no problem. He can still export all the oil he can produce, and can import anything he needs, albeit with a surcharge. Sure, he wants the sanctions-busting surcharge lifted, but otherwise he really has little reason to step aside.
Iraq's would-be partners, however, would prefer to do business without repercussions from the U.S. India was already forced to withdraw a loan offer to Iraq under pressure from the U.S. and its allies, and Russia and China have had to put off open investment in Iraq. Saddam's allies may therefore be pushing him to take a cozy retirement and let his son and a politically-correct cabinet take over. Washington might even give this one a nod, as it would prefer to deploy its military assets in more pressing venues, such as East Asia and the Balkans. In return, Washington could offer to accept Qusay and give up its support for the Iraqi opposition. For now, we only have rumors, but the rumors keep adding up. The only thing that remains is for Saddam to find a way to paint this as a final victory over Iraq's oppressors, and not a final surrender to sanctions.
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Carl