Security Issues in the Middle East

The Institute for
Foreign Policy Analysis
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Principal Investigators
James R. Holmes
David Kearn
John D. Moore
Toshi Yoshihara
Project Director
Andrew C. Winner
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America's Defense Strategy Review:
  • Implications for the Middle East Upon entering office, President George W. Bush empowered the Pentagon with a broad mandate to conduct a sweeping top-to-bottom reassessment of U. S. defense policy. The sweeping reevaluation will inform the forthcoming Congressionally-mandated 2001 Quadrennial Defense Review (QDR), which offi cially articulates America's defense priorities, the size and composition of the military, and a budgetary blueprint. To this end, Secretary of Defense Donald

Rumsfeld launched a secretive review process, com-posed of some eighteen high-level panels, to provide
policy recommendations for the new administration on America's future military strategy.
Given that this process could inaugurate the most far-reaching changes in American defense policy
in over twenty years, it has received close scrutiny (and, in some cases, stimulated deep anxieties) in
and outside of the United States. Of particular inter-est to many observers is a wide-ranging analysis of
post-Cold War strategy conducted by Andrew Mar-shall, the director of an internal Pentagon think tank.
Rumsfeld handpicked Marshall, an infl uential and forward-looking fi gure in the defense establishment,
to reevaluate the strategic environment, devise new military strategies, and recommend the acquisition
of cutting edge technologies. Marshall's fi nal con-clusions, which will likely be radical and highly
controversial, could fundamentally shake up the status quo.
One issue that he will no doubt challenge and seek to alter is the U. S. Defense Department's long-standing
prerequisite for the military to fi ght and win two major theater wars (MTWs)— premised on
a confl ict on the Korean peninsula and a reprise of the Gulf War— nearly simultaneously. This two-war
construct has helped defense planners measure how much equipment the Pentagon must procure
and maintain— in defense parlance a "force sizing" instrument. With its origins in the last Bush admin-istration,
this concept has been a critical benchmark for the last ten years. Clearly, any changes to this
requirement would have direct implications for energy security in the Gulf region.
In the 1997 QDR, the Pentagon forcefully called for maintaining the capability to fi ght two MTWs.

The report argues, "As a global power with world-wide interests, it is imperative that the United States
now and for the foreseeable future be able to deter and defeat large-scale, cross-border aggression in
two distant theaters in overlapping time frames. A force sized and equipped for deterring and defeat-ing
aggression in more than one theater ensures the United States will maintain the fl exibility to
cope with the unpredictable and unexpected. Such a capability is the sine qua non of a superpower
and is essential to the credibility of our overall national security strategy." The defense review also
noted that such a capacity would reassure allies and friends in Asia, the Middle East, and Europe.
Despite the paradigm's longevity, debates and controversy have tenaciously surrounded this
requirement ever since its inception. Subsequent reviews and assessments of the 1997 QDR have char-acterized
the two-MTW construct as unimaginative. Some have argued that the emaciated states of the
Iraqi and North Korean militaries do not warrant the level of U. S. forces currently planned for both
theaters. For example, Iraq has fewer than one half of the ground troops and tanks it possessed prior
to the Gulf War. Others maintain that this focus on conventional war scenarios underestimates the
threat of unorthodox or "asymmetric" threats, such as ballistic missiles armed with biological agents or
terrorist attacks akin to the USS Cole incident. The MTW principle also severely stresses the military's
ability to fulfi ll a growing number of lesser opera-tions in the post-Cold War era. The need to fi ght
other smaller wars and to deploy for peacekeep-ing operations has stretched American forces to the
limit— although the rationale for such missions has been challenged by the new administration. Some
have even charged that this force sizing ruler enables the Pentagon to maintain the comfortingly familiar
Cold War force structure and justify the acquisition of big-ticket military platforms.
Andrew Marshall has been among the leading critics of the MTW model. Indeed, many have specu-lated
that the two-MTW strategy would be among the fi rst casualties of the review process. The pros-pect
for such a radical shift raises several important questions, many of which could directly impact
America's military posture in Middle East. How will the United States jettison or reconfi gure the two-


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MTW standard? What will America's future military posture look like? Most importantly, how will such
a change affect U. S. forward-deployed forces in the Middle East and their ability to cope with threats
in the region? While the 2001 QDR (expected for release in Sep-tember)
is far from complete, many government and non-governmental studies have analyzed America's
defense alternatives. The following options, though not exhaustive, highlight the wide range of choices
that the United States could pursue: į Maintain the two-war construct but widen the
time frame between the two confl icts. This would allow the Pentagon to plan for the second war
with troops at lower levels of readiness. į Create a new basis for the two-MTW approach.
The fi rst confl ict would still be premised on a major conventional war. The second scenario
would function as a forward-looking "future MTW" that fundamentally transforms America's
military. į Build a force sized to deal with a single MTW and
other multiple small-scale contingencies. This would shift resources from the maintaining a
force for a second confl ict to other missions, including defense against asymmetric threats.
į Shape a force to fi ght against a notional future
opponent based upon a comprehensive threat assessment. Without identifying a particular

nation or region, the United States could then maintain the fl exibility to cope with the rise of a
potential near-peer competitor (widely presumed to be China) in the long term.
These policy alternatives suggest that the United States may radically alter its global commitments
and force structure in the coming years. Each will no doubt impact America's forward presence and
ability to cope with unexpected crises throughout the world. For example, reductions in troop levels
in Europe, Asia, and the Middle East could accom-pany America's new defense strategy. Does this then
signal a weakening American resolve to protect its national interests and those of it allies in key regions?
The answer is decidedly mixed. Upon closer examination, the defense review will
not likely upset and could in fact reinforce many of America's security commitments worldwide, includ-ing
the Persian Gulf area. First, the United States has enduring, vital interests in the Middle East.
America's allies and friends in Europe and Asia will continue to depend on the free fl ow of oil from the
region. Hence, energy security will remain a central component of U. S. security strategy in the Gulf.
Second, the proposed shift in defense strategy will be a long-term proposition that may take well over a
decade to realize. Changes in force posture will likely

be gradual to prevent upsetting America's fi ghting power. Moreover, the process of adjusting forces to a
new strategy will not be smooth. Given that the pro-posed reforms will entail painful cutbacks in certain
types of equipment and personnel, vested interests in the Pentagon and on Capitol Hill will likely resist
change, as they have in recent months. Third, on a related point, it will be diffi cult to
substitute crucial power projection capabilities, such as the forward-deployed aircraft carriers, in the near
term. At present, the U. S. Navy is already strain-ing to meet its operational requirements. With a
fl eet of twelve carrier battle groups (eleven on active duty and one in reserve), only three are fully opera-tional
at any given time. Notably, there are sizable operational gaps ranging from four to six months
in all areas of operations throughout the year. For example, a carrier now rotates between the Mediter-ranean
and the Gulf, leaving one theater without carrier coverage. The operational strain was most
evident during the Kosovo crisis when the need to deploy a substantial military presence in the Medi-terranean
left East Asia without a carrier for some time. As such, only new technologies with compel-ling
capabilities would justify reducing the carrier fl eet. In other words, the inertia of the status quo
will place an additional drag on radical changes in military posture.
Fourth, new technologies and operational con-cepts will make up for the shortfall in the capacity
to fi ght two MTWs. President Bush has already articulated a vision of using mobile, stealthy, and
long-range capabilities for the future. These new technologies will dovetail closely with the geostra-tegic
shift in focus from Europe to Asia. As such, American forces will need new equipment to tra-verse
the vast expanse of the Pacifi c to project rapid, overwhelming force. The U. S. Air Force has
already employed the Air Expeditionary Force con-cept (detailed in the Saudi Arabia chapter in the
December 1999 quarterly), which would rapidly rein-force air power in any global theater of operations.
Finally, the United States will increasingly rely on allies in the region and beyond to fi ght major
confl icts. Since the Gulf War, the Pentagon has encouraged enhancing joint and combined opera-tions
between American and Gulf Arab forces. While consensus remains elusive, planning for American-NATO
intervention in a future Gulf crisis is a serious consideration in transatlantic dialogue. There is rec-ognition
that American freedom to act unilaterally will become increasingly constrained in the coming
years. Justifying the use of force will often require some level of international consensus and support.
Moreover, allies could offer unique comparative

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advantages thus serving as force multipliers in a military operation.
The comprehensive defense review offers poten-tial benefi ts to the Gulf region and poses diffi cult
challenges to American defense planning. Among the most prominent long-term gains for the Gulf
states is that the United States may be able to reduce gradually its controversial force presence on the Ara-bian
Peninsula without compromising its security umbrella over the region. However, some caveats
deserve scrutiny and pause for analysis. As men-tioned above and in previous quarterlies, American
forces are ill suited at present, and will be for some years to come, to cope with asymmetric threats. The
terrorist bombing of the USS Cole underscores Amer-ica's vulnerabilities to the complex, low-intensity
threats in the littoral and close geographic confi nes of the Persian Gulf. Other dangers such as long-range
cruise and ballistic missiles tipped with weapons of mass destruction further complicate naval opera-tions
close to hostile shores and use of airbases in the Gulf. The United States also faces a diffi cult trade-off
challenge. The Pentagon must retain its current capabilities while developing new leap-ahead tech-nologies
that must be robust enough to replace and even surpass the performance of older equipment.
As noted earlier, certain forces, such as the omni-present carriers, are simply too diffi cult to displace
and the risks entailed in abandoning proven capa-bilities are very high. Moreover, given the recent U. S.
economic downturn, forecasts of the much touted budget surplus will not likely stand the test of time.
Hence, dwindling funds and mounting costs may present an even more daunting problem for research
and development into new technologies. While the free fl ow of oil from the Gulf will remain secure in
the short term, unpredictable trends in emerging threats and uncertainties over the sustainability of
American security commitments defy longer-term predictions.

June 2001 5
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Entangling Alliances True to form, the Arab-Israeli confl ict has
ensnared another reluctant U. S. administration. Tit-for-tat fi ghting has now sputtered on for eight
months, dashing hopes for renewed talks, much less a fi nal settlement. After the discouraging experience
of President Bill Clinton, who made a Herculean effort to frame a peace accord – only to be rebuffed
by Yasser Arafat at Camp David last year it's hard to blame George W. Bush for being wary of becom-ing
embroiled in the Al-Aqsa intifada. The confl ict entails high risks and offers few rewards. As long as
the United States continues to place a high priority on Persian Gulf security, however, it cannot ignore
events in the Holy Land. Left unchecked, the intifada could jeopardize U. S. interests in the Gulf.
The Bush administration initially sought to hold the confl ict at arm's length in order to focus on Iran
and Iraq, which it views as the region's main sources of concern. Fair enough; but the fact is that, even
in failure, President Clinton's team generated vast goodwill among America's Arab allies – shoring up
Arab support for Washington's Iraq policy even as backing for that policy dwindled in the U. N. Security
Council. Support in the region is particularly crucial now, when the United States and Britain hope to
persuade Iraq's neighbors to clamp down on smug-gling activities from which they – as well as Saddam
Hussein have profi ted handsomely. The lesson of the past seven years since the 1993 Oslo Accords
is that America benefi ts diplomatically from even a losing effort to secure a lasting peace between
Palestinians and Israelis. And it must be an evenhanded effort. Bill Clinton
was more willing than any previous president to pressure Israel to accept the land-for-peace formula
and cease provocative activities such as the con-struction of Jewish settlements in the West Bank.
With the appointment of a special envoy, William Burns, a former U. S. ambassador to Jordan, the Bush
administration has belatedly realized that it must deploy American diplomatic muscle to bring an end
to the violence. This means not only pressing Pal-estinian Authority (PA) chairman Yasser Arafat to
end terrorist attacks on Israeli civilians, but also prodding Israeli prime minister Ariel Sharon to halt

It's always a tough sell. Arab offi cials always view
America suspiciously because of Washington's $3 billion in annual support for Israel, its avowed policy
of maintaining Israeli military supremacy, and its habit of thwarting Security Council resolutions con-demning
Israeli actions. Moreover, Arab citizens are ardently sympathetic to the plight of the Palestinians
and resent U. S. backing for Israel (see Saudi Arabia chapter). So only vigorous diplomacy by the new
American administration can repair the negative perceptions that have been created in Arab capitals.
Pointed criticism of Ariel Sharon would play espe-cially well with the Arab allies.

George Mitchell, Roving Peacemaker In late May an international commission headed by
former U. S. senator George Mitchell  last seen orchestrating the 1998 Good Friday agreement more
or less ending the Northern Ireland confl ict  released a report that assessed the causes of the
intifada and issued recommendations for its cessa-tion. The Mitchell report urged a total ceasefi re, to
be followed by a complete freeze on further Jewish settlement-building – including construction within
existing settlements. (Tel Aviv has argued that con-struction should proceed so long as no new land
was involved.) Stunned by the ferocity of recent Israeli military
reprisals – including the use of high-tech F-16 fi ght-ers to carry out missile attacks  the PA promptly
accepted the report's recommendations in full. Pal-estinian spokesmen called for the formation of an
international authority to supervise their implemen-tation. Why the eagerness? Because, having rebuffed
their best opportunity for a favorable settlement under Ehud Barak, they realize that their only route
to avoid destruction at the hands of the Israeli mili-tary is through international pressure. And Yasser
Arafat has painted himself into a corner vis-ŗ-vis his constituents by encouraging them to believe he will
deliver a Palestinian state comprising 100 percent of the West Bank and Gaza. Arafat's only recourse
is to fall back on world opinion. Tel Aviv was not nearly so sanguine about the
Mitchell report. Prime Minister Sharon proclaimed that he would be willing to accept the report's
confi dence-building measures, including the freeze

June 2001 6
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on settlements, only after a "signifi cant cooling-off period." He professed confi dence that some way
could be found to accommodate the settlers' needs – including new construction within existing settle-ments
– while assuaging Palestinian misgivings. Not likely. The settlements represent a transparent
attempt to establish de facto control of swathes of Palestinian territory. Consequently, the issue has
taken on a symbolic dimension far outweighing the small amount of land involved (some 5 percent of
the West Bank). And Sharon's hints that more land might be seized for bypass roads are equally unset-tling
to Palestinians. The Mitchell Commission report is a mortal threat
to Prime Minister Sharon's government. Large seg-ments of the Israeli public would certainly consider
acceptance of the Mitchell Commission's recom-mendations to be buckling to terrorism. As a result,
Sharon's right-wing allies have threatened to defect from the governing coalition if they detect any sign
of weakness in the prime minister. A right-winger himself, the prime minister is understandably reluc-tant
to anger his ideological kin. For the moment Israeli policy is captive to the most hardline elements
of Israeli society.
Strategies and Tactics in the Intifada What do the Palestinians hope to accomplish by

continued violence in the face of the vaunted Israe-li Defense Force? When the intifada erupted last
fall, Yasser Arafat and his lieutenants had one over-riding aim: to revive their victim status – which
Arafat had sacrifi ced by his hardheadedness at Camp David – and thus to recapture the sympathies
of the international community. In the ideal case, the PA leadership hoped popular sentiments in the
Arab nations would force Arab governments to get involved in the confl ict. Intensifi ed political pressure
from a united Arab world might eventually compel Israel to settle the fi ghting and agree to a fi nal settle-ment
to Arafat's liking. (Instead, these governments ended up pledging a portion of their oil revenues to
Palestinian victims of the fi ghting in order to appease their own restive citizens.)
In the early going, massive public unrest and clashes with the IDF served Palestinian purposes
ideally. Tanzim gunmen's practice of mixing in with crowds of protesters invariably sparked a dispro-portionate
response from IDF troops who lacked non-lethal weaponry and crowd-control experience.
Predictably, this mismatch in fi repower resulted in heavy casualties among Palestinian civilians and
brought down the wrath of the international com-munity onto Tel Aviv.
But the campaign against Israel began to lose momentum as popular support faltered. Smaller and

smaller crowds turned out to protest against Israel – depriving the tanzim of the ability to easily pro-voke
the IDF. Guerrilla fi ghters increasingly began ambushing Jewish settlers in the West Bank; and,
by March 2001, groups such as Hamas and Islam-ic Jihad resumed suicide bombings within Israel
itself. Whether Arafat is behind the terror campaign is uncertain. As mentioned in previous quarterly
reports, his political standing with Palestinian citi-zens is shaky and his control over the more militant
segments even more tenuous. Nonetheless, the PA is responsible under agreements with Tel Aviv for
preventing violence against Israel by militia groups. A tough predicament for the PA chairman by any
standard. In essence, then, the intifada has backfi red on
Yasser Arafat. The uprising led to a tectonic shift rightward in Israeli public opinion and swept Ariel
Sharon into offi ce with a mandate to restore secu-rity. Ordinary Israelis now feel profoundly insecure
and doubt their ability to coexist peacefully with Palestinians. The well-publicized murders of sev-eral
Israeli children, including a ten-month-old girl, only worsened matters. This hardly furthers Ara-fat's
objectives, since Israelis must acquiesce in any interim ceasefi re and fi nal peace settlement. The
hoped-for Arab support, moreover, never material-ized. The March 2001 Arab League summit managed
only a tepid plea for a just solution to the confl ict. Syria, the only power that might be willing to risk a
tussle with Israel – President Bashar al-Assad lacer-ated Sharon as a "butcher" at the Arab summit – was
engaged in a period of transition as Assad busily con-solidated his hold on power. The other Arab states
displayed little appetite for deeper involvement. The prognosis is dim barring more forceful Ameri-can
involvement. Prime Minister Sharon has shown no sign of relenting from his demand that hostil-ities
cease before a resumption of talks. Indeed, despite his vow to forbid offensive operations by the
IDF, the prime minister seems to have loosened the rules of engagement – allowing the army to take the
fi ght to the Palestinians with bare knuckles. (Even the U. S. State Department, in a March report, con-demned
Israeli troops for excessive use of force.) If he remains similarly unbending on the settlement
issue, the cycle of Palestinian terror attacks and excessive Israeli reprisals seems certain to continue.
Since Sharon has rebuffed both a Egyptian-Jordani-an diplomatic initiative and the Mitchell report, both
of which called for an end to settlement construc-tion, the outlook for an early truce is bleak.
But if the Bush administration notifi es Sharon that the support of the only superpower is not uncon-ditional,
then more positive results could be in the offi ng. American clout remains a potent force.

June 2001 7
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After all, in April an admonition from Colin Powell induced a pullout of IDF tanks from a temporary
occupation of a slice of Gaza. And the appointment of William Burns and more vigorous engagement by
Secretary of State Powell are signs that the admin-istration will intervene more energetically. While a
fi nal peace accord is now years distant, a halt to the fi ghting would be a modest step in the right direction
– not to mention a boon for George Bush's prestige with Arab leaders.

Conclusions Is the Bush administration turning the corner on its
approach to the Arab-Israeli confl ict? It appears so. Administration offi cials have belatedly recognized
the extent to which the intifada is intertwined with events in the Gulf region – their chief area of con-cern.
However, U. S. involvement in the confl ict will have to comprise more than just bland statements
calling on all parties for an end to the violence. To achieve real results, President Bush must be pre-pared
to speak bluntly with Prime Minister Sharon about American interests in the region – even more
bluntly than Bill Clinton spoke with Ehud Barak. Little else, it seems, will induce the Israeli leader
to compromise on matters in which his nation should compromise. And whether Yasser Arafat will
– or can – reciprocate is anyone's guess.

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The Summer of Saddam's Discontent It's tough being Saddam Hussein. An end to the
United Nations-imposed sanctions regime is clearly in view, but the United States and Great Britain –
despite being pilloried in the court of world opin-ion for their supposed hardheartedness vis-ŗ-vis
the Iraqi people – are simply too obtuse to give up. And they have the U. N. Security Council vetoes to
prevent a formal end to the sanctions. So it seems certain that the world organization will continue to
restrict the fl ow of cash into Saddam's coffers and to exercise oversight over Iraqi imports, thus meddling
in Iraq's purchases of equipment that could be used in prohibited weapons programs. The only question
is what precise form that meddling will take. It will certainly be intolerable for Baghdad, which lacks
the wherewithal to resist the world organization. The United States and the United Kingdom have
been increasingly anxious to stanch international criticism over the sanctions and shore up interna-tional
support for their joint Iraq policy. In late May the British government – picking up on the U. S.
theme of "smart sanctions," and perhaps even front-ing for the Bush administration – circulated a draft
resolution among the permanent members of the Security Council. (The most recent six-month phase
of the oil-for-food program expired on 3 June, shov-ing Iraq to the top of the council's agenda.) Bowing
to reality, Britain (and its silent American partner) quietly dropped demands that international weap-ons
inspectors be readmitted to the country in exchange for loosened sanctions.
Key provisions of the resolution would (a) end all restrictions on the importation of civilian goods; (b)
clamp down on items on a list of banned military equipment; (c) require the U. N. Sanctions Commit-tee
to continue reviewing sales of "dual-use" goods; (d) leave intact the U. N. escrow account, thereby
allowing the Sanctions Committee – and thus the United States and Great Britain – to continue super-vising
Iraqi purchases; (e) enact procedures for monitoring imports into Iraq from neighboring coun-tries;
and (f) establish a list of fi rms authorized to purchase Iraqi oil.
Closing loopholes in the sanctions is the chief aim of the British proposal aside from defl ecting
international criticism. First, 250,000 barrels of oil are reportedly smuggled into Turkey and Syria daily,

while an additional 100,000 barrels fi nd their way across the border with Jordan. Illegal sur-charges
and fees on smuggled Iraqi oil evade the U. N. system and end up funding prohibited weap-ons
programs, not to mention lining the pockets of high-ranking Iraqi offi cials. Hence the designa-tion
of authorized purchasers of Iraqi oil. Second, dual-use items such as advanced computers, tele-communications
equipment, night-vision goggles, and underwater cameras have legitimate civilian
uses but could easily be tapped to support the devel-opment of advanced weaponry. A crackdown on
abuses of the system by the Sanctions Committee will supposedly help stem the fl ow of high-tech hard-ware
into Iraqi labs. Nonetheless, wrangling over the composition of the dual-use list is all but certain.
Unsurprisingly, the new resolution found mixed support in the fractured Security Council. For obvi-ous
reasons the Bush administration – which has backed the concept of more narrowly crafted sanc-tions
that would alleviate the hardships endured by the Iraqi people while maintaining a chokehold on
Saddam Hussein's military-endorsed the British pro-posal. There is little prospect that the new sanctions
framework erected by the new resolution would truly alleviate the suffering of Iraqi citizens. It would,
however, transfer the onus for Iraqis' well-being from the West squarely to the Iraqi government –
where it belongs. Secretary of State Colin Powell, architect of the smart-sanctions idea, has justifi ed
this diplomatic maneuver in so many words. Russia, China, and France, Iraq's patrons on the
council, greeted London's initiative frostily. Russia, which has forged ever-closer ties with Baghdad,
accused Britain of moving precipitously on a matter of such gravity. As a delaying tactic, Moscow prompt-ly
unveiled a competing draft resolution that would extend the existing oil-for-food program for an addi-tional
six months. Self-interest is clearly the driving factor in Moscow's leniency. Russian offi cials are
eager to expand trade with Iraq from the current total of $1.5 billion annually. (President Vladimir
Putin's government has estimated that ten years of sanctions have cost Russia some $30 billion in lost
trade revenue – a staggering amount for its enfeebled economy.) Ending the sanctions, they hope, would
allow Baghdad to pay off its $7 billion debt to Russia, largely for weapons purchases during the Soviet era.

June 2001 9
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Yet Moscow has pledged not to bypass whatever U. N. sanctions are in force.
Moscow's delaying strategy was evidently a tell-ing one. As this report went to print, U. S. secretary
of state Colin Powell, after consulting with the rep-resentatives of the other permanent members of the
Security Council, agreed to shelve the British pro-posal temporarily. The council is poised to extend
the existing oil-for-food scheme for a nominal one month, in order to allow debate over the list of dual-use
items. However, Powell professed confi dence that a smart-sanctions regime would be in place well
before the extension expired. Baghdad, which has adamantly opposed pre-serving
any form of U. N. sanctions, ridiculed the proposed resolution. Deputy Prime Minister Tariq
Aziz called the notion that sanctions were being eased a "big lie." In a 21 May speech to the Iraqi
cabinet, Saddam Hussein pronounced Washington the "strategic loser" in the tussle over sanctions
because it had lost face in Arab capitals. Further, he chortled, "we will reject the so-called smart sanc-tions,
which are more stupid than the previous ones, just as we have rejected everything that could have
encroached on Iraq's dignity, honor, independence, and genuine, historical foundations." Wrapping his
oppressive rule in Iraqi culture and history has been a winning formula for Hussein so far; so there is
little point in modifying his appeal. His foot-dragging has convinced some observers
that Saddam Hussein, perversely, is content for the sanctions to remain in place. After all, Hussein has
profi ted handsomely from illicit oil sales that have allowed him and his cronies to enjoy a lavish life-style.
And keeping the Iraqi people impoverished confers the dual benefi ts of weakening domestic
opposition to his rule and fanning hatred of the West. After Baghdad rejected the communiquť of
the March 2001 Arab League summit in Amman, which called on Iraq to release 600 Kuwaiti prison-ers
of war and implement other U. N. resolutions, opposition leaders proclaimed that Hussein simply
did not want the sanctions to end. That seems a bit much. What does seem clear is that the Iraqi dicta-tor
prefers the current stalemate to even a diluted sanctions regime that commands the support of a
united international community – and thus could remain in place indefi nitely.
Will the new resolution – assuming it garners the necessary support in the U. N. – work? Maybe. As
a diplomatic strategem, it is well conceived. If the United States and United Kingdom campaign effec-tively
for their plan, they could deftly shift the blame for the humanitarian disaster back to Baghdad. As
explained in the Saudi Arabia chapter of this report, this is the key to restoring Arab solidarity behind

Washington's Iraq policy. That would be a consider-able achievement in view of the political battering
the coalition has endured in recent months. A seem-ingly more benign form of sanctions could actually
buoy support for the coalition's Iraq policy in the world body.
One obvious weak spot in the new proposal is the Sanctions Committee's continuing authority to block
dual-use items. Never one to abandon a successful strategy, Saddam Hussein will undoubtedly attempt
to paint the new scheme as a Western ruse that allows Washington and London to duck responsibil-ity
for depriving Iraq of hardware such as water pumps and electrical generators that provide essen-tial
services to Iraqi citizens. While the outcome of the looming rhetorical duel is uncertain, the British
proposal could at least level the playing fi eld for the antagonists.
The cooperation of Iraq's neighbors will be cru-cial to stopping smuggling operations, and thereby
the fl ow of illegal revenues into Saddam Hussein's pockets. Yet a united front is doubtful at this late
date. Syria has paid lip service to the U. N. while carrying on both legitimate and illicit trade with Iraq.
Anticipating increased Iraqi oil sales, Damascus is reportedly planning to build new pipelines from the
Iraqi border to the port of Banyas. And it's not a fl ight of fancy to believe the Syrian government will
continue to surreptitiously abet the lucrative fl ow of smuggled goods across the Iraqi border. Jordan,
whose trade with Iraq totals over $2 billion annually even within the constraints of the existing oil-for-food
program, constitutes another potential gap in the sanctions. Even Turkey, a staunch U. S. ally, has
pressed Washington to modify the sanctions to ben-efi t the fl agging Turkish economy.
Consequently, Tariq Aziz (now acting in his former role as foreign minister in the wake of an
April cabinet shakeup) predicted that his country's neighbors would refuse to go along with a smart-sanctions
regime because of the economic losses they would suffer. Sadly for the United States and
Britain, that seems an accurate diagnosis of the standoff between Iraq and the West.

Still SmolderingÖ Animosity between
Iraq and Iran Iraq's neighbors have apparently concluded that

Saddam Hussein is on the verge of breaking out of the U. N. stranglehold that has given them a decade
of breathing room. Reports that Iraq nearly fi eld-ed a nuclear weapon in 1991, and that Baghdad
had rebuilt a biological-weapons plant, fueled fears about Iraqi ambitions. Recent Iranian actions sug-gest
that Tehran has decided to implement its own

June 2001 10
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form of containment to counter the emerging threat. On 18 April the Iranian military unleashed a barrage
of SCUD missiles – reportedly totaling 56 – against camps of the Iraq-based (and -backed) People's
Mujaheddin, which hopes to overthrow the Iranian government. Iranian claims that all insurgent bases
had been destroyed were surely exaggerated – espe-cially in view of the well-documented inaccuracy of
the Scuds. More likely, the insurgent group survived to fi ght another day.
The missile attack was undoubtedly calculated to squelch mischief by the Mujaheddin, who have
launched a series of terrorist attacks within the Islam-ic Republic. But the impressive rate of fi re of the
Iranian missile batteries also sent a clear deterrent message to Baghdad. Subsequent war games along
the frontier with Iraq conveyed the same message. Tehran has quietly inquired about the characteristics
of a new, Russian-built surface-to-surface missile system recently displayed in Baghdad. Pursuant to
the two nations' agreement on arms sales, Moscow agreed to supply the Iranian government with intel-ligence
on new Iraqi weaponry. These developments bespeak a growing apprehension in the Islamic
Republic about a resurgence of its traditional rival. A worried Iran also seems ready to cultivate unlikely
allies in order to balance Iraq. Including, apparently, America. In April, Ayatol-lah
Sayyid Muhammad Baqir al-Hakim, leader of the Supreme Council for the Islamic Revolution in
Iraq (SCIRI), an umbrella for Iraqi Islamic groups in exile, declared that his organization would be
willing to hold talks with the United States aimed at securing institutional support for resistance activi-ties.
(SCIRI has carried out multiple Katyusha rocket attacks against targets such as presidential palac-es.)
One rumored U. S. plan would have American forces establish a "safe haven" in southern Iraq for
resistance activities. Whether these reports are true or not, they are credible. Such a plan could fairly
easily be carried out by extending the mission of the southern no-fl y zone, erected after Desert Storm
to protect the beleaguered Shiite population from Saddam Hussein's depredations.
It's worth mentioning that hawkish U. S. defense analysts – including senior offi cials in the Bush
administration such as Deputy Secretary of Defense Paul Wolfowitz – have long advocated creating a safe
haven for Iraqi rebels. However, the debate over U. S. policy towards the Iraqi opposition is still under scru-tiny
as the national security establishment conducts its presidentially-mandated policy review. Because
the Shiite rebels covered by the southern no-fl y zone are seen as friendly towards Iran – always a lightning
rod for strong passions in Washington – bureaucratic infi ghting in the administration has reportedly been

vitriolic. It is impossible to predict the outcome of the debate over unseating Saddam Hussein.
A London-based Arab-language daily asserted that Hakim's statements had been endorsed both by
Iranian supreme leader Ali Khamenei and Iranian president Muhammad Khatami. These develop-ments,
together with tough rhetoric emanating from Washington, prompted discussion that an "anti-regime
alliance" was on the verge of coalescing. At this juncture that seems improbable. Given con-tinuing
rifts among the resistance groups, not to mention the recent shift of power to the less-hawkish
Democratic Party in the U. S. Senate, Iranian support is probably inadequate to cement an anti-Hussein
Saddam Hussein, the New Saladin Saddam Hussein has continued to portray himself as

bulwark of the Arab peoples against Israel and the diabolical West. In early May, sounding a familiar
theme, he told visiting Palestinian National Council chairman Salim Za'nuni that his nation's "support
for the Palestinian people is infi nite because Iraq and Palestine are one." The Iraqi president pledged
fi nancial support to the intifada – in addition to $930 million already delivered  and offered to allow
any Palestinian to study at Iraqi universities, free of charge.
However, Hussein's efforts to rally support have made him something of a laughingstock in Arab
capitals. In March his spokesman announced that a second batch of volunteers had begun training
to serve in the "Jerusalem Liberation Army," a twenty-one division force intended for war against
Israel. Baghdad claimed, outlandishly, that six million Iraqis had volunteered for the army – prompt-ing
Egyptian president Hosni Mubarak to ridicule Saddam Hussein's call to arms.

Entrenching the Hussein Dynasty On 17 May the 12th Regional Congress of the ruling
Baath Party, in a less-than-shocking move, reelected Saddam Hussein secretary-general of the Iraq Revo-lutionary
Command Council. The only surprising event of the congress was the election of Saddam's
son, Qusayy, to the council for the fi rst time. Equally important, Qusayy was named Saddam's deputy
chief of the Military Bureau of the Baath Party. Since he already commands the Republican Guard and
oversees the bulk of Iraq's military, security, and intelligence services, Qusayy in effect now outranks
the defense minister. The new powers bestowed on his son substantiated rumors that Qusayy – engaged
in a power struggle with his brother, 'Udayy is now the frontrunner to succeed Saddam Hussein
as president of Iraq. Unfortunately for Iraq's neigh-Iraq

June 2001 11
11Page 1213

bors, there is little indication that either of Saddam's offspring would be a signifi cant improvement over
his father.
Conclusions Conditions on the ground will change little if the

British draft resolution passes. On the positive side, ending demands for the readmission of weapons
inspectors will deprive Saddam Hussein of the abil-ity to create an international crisis whenever it suits
him. Lifting controls on consumer goods should blunt criticism of the United States and the United
Kingdom, improving prospects for maintaining sanc-tions over the long haul and easing the burden on
worried moderate Arab governments whose rank-and-fi le citizens overwhelmingly sympathize with
Iraq. And the U. N. escrow account, together with Sanctions Committee oversight, remains a useful
check on Iraqi expenditures and imports – and thus Baghdad's military buildup.
On the negative side, the smuggling trade across Iraq's lengthy borders will continue unabated. It
strains credulity to imagine that Iraq's neighbors will be able – or willing, given their need for cash –
to crack down on sanctions-busting, if only because of the sheer physical diffi culty of monitoring ship-ments
of goods into such a vast country. In all likelihood, then, funding and components for weap-ons
of mass destruction will continue to fi nd their way into Iraq.
Still, Western forces in the Persian Gulf region remain more than adequate to deter overt aggres-sion
by Saddam Hussein. The Iraqi dictator remains securely in the box.

June 2001 12
12Page 1314
September 2000

Country The Kingdom Increases the Pressure As the Israeli-Palestinian standoff continued to escalate unpredictably in recent months, Saudi Arabia's frustration and the Arab world's condemnations mounted. At the same time, Washington's early refusal to facilitate a resolution to the worsening violence increased the kingdom's indignation over what the Saudis and other Arab
nations believe to be America's overtly pro-Israeli policy. American secretary of state Colin Powell's
comments at a congressional hearing in early March appeared to reinforce the kingdom's perception.
In public testimony, Powell called Jerusalem the capital of Israel and reiterated President Bush's
commitment to move the American embassy from Tel Aviv to Jerusalem. The Muslim World League
based in Mecca – a government sponsored organiza-tion aimed at promoting Islamic unity – slammed
Powell's statement as a "falsifi cation of history and denial of facts." In an offi cial response, Saudi
Defense Minister Prince Sultan simply stated, "We are against this view." The State Department sub-sequently
softened Powell's position and reiterated America's longstanding policy on the status of Jeru-salem,
which is that any change must be based on negotiations.
During the two-day annual Arab summit in late March, member states voiced their opposition to
Israeli actions in the most strident terms. The fi nal communiquť called for an international force to
protect the Palestinians and demanded that Israeli leaders be put on trial as "war criminals." The reso-lution
also approved a plan to extend $877 million in aid to the Palestinians and endorsed a freeze on
further diplomatic and economic interactions with Israel. Prince Sultan, who led the Saudi delegation
to the summit, later described Israeli behavior as suicidal, inhuman, and irresponsible. He declared,
"I do believe that it is high time for the world to stand up against the practices of Israel, regardless of
the inclinations or interests of some countries." The defense minister was clearly alluding to America's
conspicuous silence since President Bush entered the White House.
In early April, Saudi Arabia roundly denounced Israel's use of helicopter gunships to conduct
missile attacks against Palestinian areas. The Saudi cabinet, headed by Crown Prince Abdullah,

condemned the "dan-gerous escalation
by brutal Israeli forces against
unarmed Palestin-ians in occupied Arab land as well as the (Israeli)
raids and air strikes against civilian areas." Again, in a clear demonstration of Saudi impatience with
America's diplomatic aloofness to the crisis, the cabinet statement added, " All peace-loving coun-tries,
particularly those brokering peace, must not waste any effort to ensure security and stability and
to realize justice and avoid double standards." Saudi pressure on the United States only increased
in the following month. According to a 17 May New York Times article, the crown prince reportedly
declined an invitation to visit the White House in June. The heir apparent to the throne apparently
indicated that he would not go to the United States until Washington placed greater pressure on Israel
to cease its military actions against the Palestinians. To date, it was the strongest signal of the kingdom's
displeasure – and the Arab world's growing anger – at the perceived American inaction. Subsequently, a
chorus of support in the media for the crown prince's rebuff fl ooded the kingdom, refl ecting widely shared
and deeply felt sentiments on the Arab street. One newspaper lauded, "This courageous Saudi stand
by Prince Abdullah is in defense of the dignity and freedom of the Arabs and their natural right
to regain what they are entitled to." It added, "Washington's illogical support of Tel Aviv has
whetted Sharon's appetite to spill more blood and escalate the aggression against unarmed Palestin-ians."
Another ominously warned, "American and European reluctance to deter Israeli aggression gives
a cover up for these attacks, which with the Israeli madness could eventually set the whole region on
fi re." A less strident editorial urged the United States to help "end the tragic situation in Palestine." Given
that Saudi authorities tightly control the media, Riyadh in effect endorsed the public's sentiments,
magnifying the kingdom's hardening stance toward Washington.
In response to Israeli air strikes in the West Bank – the fi rst since the 1967 war – the Arab League hastily
convened an emergency meeting of foreign ministers on 19 May. In one of the worst downturns in Arab-Saudi

June 2001 13
13Page 1415

Israeli relations since the Camp David Accords two decades ago, the league with great fanfare agreed
to halt further political contacts with Tel Aviv. The decision derailed a fragile joint Egyptian-Jordani-an
mediation effort to produce a truce and added pressure on the United States – the only remain-ing
infl uential actor – to play honest broker. The secretary general of the Arab League, Amr Moussa,
stated "Our intention is not to talk about or fall in the trap of talking about peace proposals while we
see that the Israeli government does not really mean it." He added, "The attacks against Palestinians will
have to stop. Otherwise, we will be acting under the point of the gun, which we totally and utterly
reject." Mr. Moussa also spoke out for greater Amer-ican participation in the peace process. On 26
May, the Organization of the Islamic Conference (OIC) convened another emergency meeting among
foreign ministers in Doha, Qatar. The fi nal commu-niquť called on all Muslim states to sever ties with
Israel. Behind the faÁade of resoluteness and solidar-ity
lie deep-seated divisions within the Arab world over a common approach to the Israeli-Palestinian
showdown. Indeed, recent events demonstrate the inability and unwillingness of the Arab world to act
on behalf of the Palestinians. The repeated calls for greater American involvement in the crisis highlight
the collective impotence of Arab nations in infl uenc-ing events. The Gulf states have quickly clamped
down on rumors and openly dismissed talk of an oil embargo. Efforts to fulfi ll the March 2001 Arab
summit pledge of fi nancial support to the belea-guered Palestinian brethren have been half-hearted
at best. Arab states have differed over the level of fi nancial aid to the Palestinian Authority (PA). Some
have objected to a direct infusion of funds given the lack of transparency in how the PA spends the
money. The May OIC meeting perhaps epitomizes the
elusive consensus among Arab nations. Key regional powers, including Saudi Arabia and Egypt, refused
to send their delegations to the conference. Prior to the gathering, Qater, the host nation, came under
intense fi re for maintaining a small Israeli trade mission, which nearly scuttled the entire meeting.
Participants differed drastically over the level of response to Israel. Iran and Syria urged a pan-Islamic
boycott of Israel while Iraq called for a holy war. Despite the strong rhetoric and resounding endorse-ments
to sever political ties, the organization, which is dominated by moderate Arab states, produced a
signifi cantly watered down fi nal communiquť. For example, the resolution did not threaten punishment
if members chose not to break off relations with Tel Aviv. Indeed, Egypt and Jordan (both maintain

full diplomatic relations with Israel) have avoided downgrading bilateral ties. Cairo and Amman, both
recipients of generous American fi nancial aid, fear antagonizing Washington and infl aming the situa-tion
further. Above all, no Arab state wishes to go to war with Israel again over the Palestinians. Com-menting
on the mixed outcome of the OIC meeting, an advisor to the Qatari government noted, "We're
defi nitely not talking about a military option because we all know that there is, at the moment, no cred-ible
Arab military option against Israel." While they unanimously pay lip service to the current intifada,
the Arab world will remain far from forming a united front. Moreover, the spillover effects of the crisis will
be limited to diplomatic theatrics. As noted in greater detail in the December 2000
quarterly, many domestic and regional factors have infl uenced Saudi Arabia's evolving position on the
Israeli-Palestinian confl ict. Given the rising tensions in the region, it is worth revisiting some of the
kingdom's motivations for its toughening stance, particularly toward the United States.
There is genuine frustration in Riyadh at the lack of progress in resolving the crisis. America's delib-erate
distance from the violence, which the Saudis view as an open endorsement of Israeli actions,
further incense the kingdom. Moreover, Israel's application of disproportionate force against the
Palestinians heightens real indignation.
Acutely attuned to any domestic discontent that could destabilize the regime or cause internal

unrest, Riyadh needs to placate and defl ect rising public anti-Americanism in the kingdom and
the Arab world more broadly. By remaining sympathetic to the Palestinian cause, the Saudi
leadership can justify its ongoing military rela-tionship with the United States, including the
sizable American force presence on the king-dom's soil.
The growing infl uence of Crown Prince Abdullah, who has charted a more independent course for
Saudi Arabia, has enabled the kingdom to voice its position more openly. Given Saudi Arabia's
traditional tendency to avoid public disagree-ment with Washington, Crown Prince Abdullah's
widely reported criticism of the American role in the Israeli-Palestinian confl ict has set a surprising
precedent and perhaps a new tone to bilateral ties.
Saudi Arabia often fi nds itself in an unenviable bind when dealing with repercussions from the
Arab-Israeli confrontation. The outbursts of anti-Americanism that have accompanied the current
deterioration in the peace process pose a direct chal-lenge to the kingdom's central security policy: the
reliance on Washington's extended security guar-Saudi
June 2001 14
14Page 1516

antees of Saudi Arabia's survival. As the caretaker of the two holiest Islamic sites and a presumed
leader of the Arab world, the hosting of a substan-tial American military presence in the kingdom is
a highly sensitive and potentially explosive politi-cal issue. Riyadh must placate the public's growing
anger at what they perceive as America's blatant double standard. At the same time, the Saudis must
avoid disrupting a fruitful security relationship. This delicate balancing act will continue so long as the
kingdom remains vulnerable to external threats, believes that it can control domestic sentiments, or
perceives a strong American commitment to protect Saudi interests.

The Kingdom's Regional Relations Softening attitudes toward Iraq within the Arab
world has been an unsettling and worrying trend for the kingdom, which escaped invasion during the
Persian Gulf War. In recent months Baghdad has increased its vitriolic posturing and public attacks
against the kingdom and Kuwait in the wake of every allied air sortie over the no-fl y zones. The
Iraqi media has portrayed Saudi Arabia and Kuwait as stooges of the United States. Riyadh for its part
continued to insist that Baghdad must abide by all UN resolutions before sanctions can be lifted. In
contrast, other states in the region have favored gradually rehabilitating Iraq. As a result of this shift,
the question of Iraq topped the agenda of the March 2001 Arab Summit for the fi rst time since the Gulf
War ended. Alarmed at this turn of events, Saudi Arabia expressed its displeasure by downgrading the
level of representation by dispatching Prince Sultan in place of Crown Prince Abdullah, who has led
the Saudi delegation for the last fi fteen years. This symbolic move no doubt set an important tone for
the meeting. Despite a last ditch effort at reaching a common
position on the sanctions regime, resolving the Iraq conundrum proved too divisive to overcome. Saudi
Arabia probably played a key role in fracturing any emerging consensus. Indeed, the fi nal communiquť
was conspicuous for its silence on Iraq. In a sepa-rate and largely symbolic resolution, the summit
entrusted Jordan's King Abdullah II to facilitate con-tacts between Kuwait and Iraq. In any event, the
Iraqi delegation rejected the three-point resolution, which also set guidelines for Kuwaiti-Iraqi relations
and called for lifting of sanctions. The Iraqi delega-tion described the summit as a failure and blamed
the inconclusive results on Kuwait. As a result of the diplomatic stalemate, due in
large part to Iraq's intransigence, Saudi Arabia and the Gulf states regrouped in early April to consult
with each other on dealing with Baghdad. At the

invitation of Prince Sultan, senior offi cials of the Gulf Cooperation Council (GCC) met at Hafr al-Batn,
the Saudi military base that houses the regional organization's joint force, Peninsula Shield. Offi cial
statements described the meeting as an occasion to discuss and exchange views on Iraq. The exact
nature of the meeting and the specifi c issues exam-ined remain unknown.
The national representatives at the meeting were unusually high ranking, ranging from Bahrain's amir
to Kuwait's deputy prime minister. More intrigu-ing, all the participants were senior members of
the ruling family rather than appointed bureaucrats. This all-star line-up no doubt sent a strong signal
to Iraq (although the content of the message is unclear) and indicated heightened concerns among
the GCC states. The gathering predictably provoked a harsh reaction in Iraq. One Iraqi newspaper called
the meeting "a provocation and a threat." Another reported, "The meeting, held upon US orders, is an
attempt by Saudi and Kuwaiti leaders to increase ten-sions." It defi antly added, "Iraq will foil the suspect
actions of the treacherous leaders of Kuwait and Saudi Arabia, who obey their American and Zionist
masters." At the bilateral level, Saudi Arabia continued to
shore up its defense relations with Kuwait, the only Gulf state implacably opposed to embracing Iraq.
In late April, Kuwaiti deputy prime minister and defense minister, Sheikh Jabir al-Mubarak al-Hamad
al-Sabah, visited the kingdom in a show of solidar-ity. After meetings with King Fahd, Crown Prince
Abdullah, and Prince Sultan, the Kuwaiti minister hailed Saudi support. He promised swift punish-ment
by Kuwait and the GCC should Iraq entertain aggression.
The seemingly endless game of cat and mouse with Iraq will almost certainly drag on for the
foreseeable future. The diplomatic sparring will likely intensify in the coming months. Baghdad will
exploit the Israeli-Palestinian confl ict to score politi-cal points. Given that Washington is still in the midst
of a major defense and foreign policy reassessment, American policy toward the Middle East remains
in a state of fl ux and, to some degree, confusion (see Iraq chapter). Baghdad will likely exploit this
transition period to splinter any Arab consensus and win over as many sympathetic states as possible. In
the meantime, Saudi Arabia will continue to exert its infl uence to contain and isolate Iraq in a losing
battle. Even as the kingdom sustained its pressure on
Iraq, Riyadh has turned to diplomacy and engage-ment to ease tensions along its periphery. On 17
April, Saudi interior minister Prince Nayef signed a much anticipated security pact with his Iranian

Saudi Arabia
June 2001 15
15Page 1617

counterpart Abdolvahed Mousawi during his offi cial visit to the Islamic Republic. The pact codifi es coop-eration
on fi ghting crime, terrorism, drug traffi cking, and money laundering. Iran is a major gateway
for drug traffi cking from Pakistan and Afghanistan destined for the Gulf states and Europe. While
the accord signals growing trust and cooperation between the two regional powerhouses, it is not a
military alliance. The Saudis in particular went to great lengths to reassure its Arab neighbors that the
treaty does not portend any substantive changes to the kingdom's defense or foreign policies. Saudi
Arabia also refused to comment on whether the agreement would have an impact on the territorial
dispute between Iran and the UAE. Despite regional fears of a grand strategic bar-gain
between Saudi Arabia and Iran, Riyadh's relations with Tehran will remain shallow. First,
Iran's support for terrorism, highlighted by recent evidence that Tehran may have been involved in
the Khobar towers bombing, still engenders deep distrust. Second, Tehran is fundamentally opposed
to American forces deployed in the region and on Saudi soil. Third, the kingdom's overtures to Iran are
a temporary maneuver to balance against the more imminent Iraqi threat. Fourth, suspicions and anxiet-ies
among the smaller GCC states, particularly the UAE, prevent Saudi Arabia from conducting a rapid
rapprochement. Short of a major and unexpected regional upheaval, any dramatic strategic embrace
between the two heavyweights remains a long-term proposition.
Saudi Arabia is also pressing ahead with improv-ing its security to the east and south. On 21 March,
Saudi foreign minister Saud al-Faisal and his Qatari counterpart, Sheikh Hamad bin Jassim bin Jabir
Al-Thani, signed a historic comprehensive agree-ment that ended a 35-year old maritime and land
border dispute. This resolution marked the end of the kingdom's border confl icts with all of its
neighbors. In early April, Yemeni interior minister Husayn Muhammad Arab and the defense chief
of staff Major General Abdallah Ali A'liwah visited the kingdom for further talks on the border treaty
signed in June 2000. One of the major items on the agenda was an agreement with a German company
to demarcate the 1,350-kilometer border disputed since the 1930s. Both sides expressed satisfaction on
the implementation of the border pact. In late May, Crown Prince Abdullah took part in celebrations in
Aden, Yemen commemorating the nation's unifi ca-tion in 1990. During the ceremony, Yemeni president
Ali Abdallah Saleh declared that the border dispute resolution set a new tone to the relationship. Indeed,
both states have already pulled back forces from the border and Saudi Arabia has rescheduled Yemen's

debt and extended new loans to the Arab world's poorest country.
These diplomatic maneuvers with Iran, Yemen, and Qatar have signifi cantly improved Saudi Ara-bia's
geostrategic position. As noted in the December 1999 quarterly, the kingdom faces strategic chal-lenges
from multiple geographic fronts. It must keep in mind potential threats from Iraq, Iran, Israel (at
least theoretically), Yemen, and the Red Sea fl ank. Riyadh hopes that the easing of tensions with Iran,
Yemen, and Qatar along with the fragile contain-ment of Iraq would free up enough resources for
internal reforms that would have otherwise been spent on defense. For example, the former strong
points along the Saudi-Yemeni border, which made little strategic sense, were particularly draining on
the kingdom's fi nances and manpower. Given that Riyadh must devote substantial resources to deliver
socio-economic reforms, diplomatic breakthroughs of this kind could promise major political and
fi nancial windfalls. However, the benefi ts will not be immediately visible or far-reaching. Whether
the Saudis will be able to navigate the uncertain economic future will still depend on the political
fortitude of the leadership to press on with painful reforms.

Defense on Hold? The emphasis on diplomacy rather than deterrence
or defense conforms to recent Saudi decisions on military acquisition. Despite the resurgence in oil
revenues, which fueled rampant rumors of a return to spending sprees on defense equipment, the king-dom
has not proceeded with its various ambitious modernization programs that have been delayed.
The big-ticket items placed on hold include next-generation fi ghters to replace the aging F-5 and some
F-15 fi ghters, French-built AMX tanks for a major tank fl eet modernization, self-propelled artillery
pieces, and possibly the American Apache attack helicopters. According to Prince Khaled bin Sultan
Abdul Aziz Al –Saud, Saudi Arabia's assistant min-ister of defense and military aviation, "our priority
now is sustainment. I would blunt rumors about new equipment." In reference to fi ghter moderniza-tion
he added, "The F-5 program will happen when the time is right. There is no money in the current
budget for the F-15s." Overall American-Saudi mili-tary contracts, a main indicator of arms sales to the
kingdom, plummeted from $1.4 billion in 1999 to $755 million in 2000.
When oil prices plunged in 1998, Crown Prince Abdullah imposed austerity measures aimed at
enforcing fi scal responsibility. In response to new economic strains, Abdullah has sought to reduce
the kingdom's dependence on oil, to privatize the
Saudi Arabia
June 2001 16
16Page 1718

economy, and to open Saudi industry to foreign investment. Government expenditures have focused
on reducing public debt, improving education and other social programs, developing infrastructure,
and creating employment for a growing young popu-lation. The high priority that the crown prince has
assigned to internal reforms will clearly come at the expense of defense programs. As noted above, the
easing of external threats has reinforced this trend. Indeed, according to one prominent defense contrac-tor,
major defense purchases are not likely to occur in the next three years. Saudi Arabia's restrained
approach to defense highlights the kingdom's more balanced regional security policy and Abdullah's
infl uence in managing the state.

Saudi Arabia
June 2001 17
17Page 1819

HeÖ Will! After a period of well-publicized introspection –
"Will He Or Won't He?" wondered breathless head-lines in even the most sober news outlets – Iranian
president Muhammad Khatami decided he would, after all, seek reelection in the 8 June elections. That
comes as no surprise. A Khatami victory at the ballot box is all but assured. Surprisingly, several members
of Khatami's cabinet announced their candidacies, but the president still will face little serious opposi-tion.
In all likelihood, his hand-wringing was a ploy to throw a scare into voters and thereby boost
his share of the vote. He has been visibly frustrat-ed by his inability to reform the Iranian political
system, whose main levers of power – the army, the intelligence and security services, and, most impor-tantly,
the judiciary  remain fi rmly in the hands of conservative clerics led by Supreme Leader Ali
Khamenei. Khatami is gambling that rank-and-fi le Iranians
will sweep him back into offi ce with a mandate so overwhelming that it will give the dinosaurs
pause. Contrariwise, some conservative mullahs will undoubtedly seek to discourage voter turnout to
undercut that mandate. The conservative crackdown of recent months seems premised on the – faulty –
notion that the public's desire for loosened social controls is shallow and will evaporate should a
few prominent spokesmen on the left be silenced. Should Khatami's showing on 8 June exceed the
70 percent he garnered in 1997, this fallacy will be exposed in resounding fashion.
Faced with a loud statement of the will of the people, even hardline mullahs may have to make
more than token gestures at liberalization. Or so the president hopes. The conservatives are noth-ing
if not determined. Having kept the president in the box for four years, they may not even mind a
Khatami reelection. Khatami provides the appear-ance, but not the substance, of greater freedoms
– appeasing the Iranian public while the conser-vatives continue to obstruct efforts at meaningful
reform. While the president can nominate liberals to the cabinet, conservative-dominated institutions
can block reform on the standard excuse that it contravenes Islam.

Perhaps that's why, when he arrived to register for the campaign, Khatami remarked  provoking
sympathetic chuckles  that he wished he were somewhere else.

Illiberal Democracy The Islamic Republic continues to grapple with the
tension between democratic and religious principles. As the campaign spun up, the conservatives contin-ued
to make hay with the vaguely worded Islamic constitution. Granted, the Guardians Council had
to intervene in the presidential campaign in some manner. The fi eld of 814 candidates would have
been too unwieldy to manage on election day. Article 99 of the constitution empowers the coun-cil
to exercise "approbatory supervision" over the candidates – a term that in practice has proved
exceedingly elastic. One council member, Seyyed Reza Zavarei, interpreted the council's prerogative
as assuring that presidential aspirants are religious fi gures – not necessarily clerics, but individuals
"committed to upholding religious principles in a way that meets with our society's approval."
Piety, of course, is in the eye of the beholder. And when religious conservatives are the arbiters of who
upholds Islamic values, the result often turns out to be a winnowing out of those the mullahs deem
to be heretics. Liberals, in other words. (President Khatami, of course, made the fi eld of candidates.
Even the Guardians Council, whatever its members' private wishes, would not have dared to exclude
the country's most popular politician.) Many of the unlucky candidates denied eligibility for the elec-tion
contested the council's fi ndings, to no avail. Attempts to assert legislative oversight over the pro-cess
have been similarly toothless. In one positive development, however, the council reversed its ini-tial
decision to exclude 142 of 356 candidates – again, mostly reformers – from the parliamentary by-elec-tions,
also scheduled for 8 June. Nonetheless, the screening process exemplifi ed
what is wrong with the Iranian political system and showed why Khatami is so frustrated. He has been
unable to make inroads against arbitrary interven-tion by conservative-dominated bodies such as the

June 2001 18
18Page 1920

Council of Guardians. Only time will tell whether that will change if and when Khatami is returned to
offi ce in June – but the outlook isn't promising.
Clampdown on the Press Continues The conservatives continued their hamhanded cam-paign

to squelch freedom of the Iranian press, as well as the access of Iranians to foreign media.
Nearly sixty reform press outlets have now been shut down for political crimes and their editors jailed. In
mid-May some 400 Internet cafes in Tehran were closed at the behest of the government, purportedly
because they lacked permits. (The permits in ques-tion turned out not to exist.) One offi cial of the
Ministry of Post, Telegraph, and Telephone (PTT) conceded that the closures were part of a move for
"more control and supervision on the activities of Internet cafes, in order to purify materials which go
awry of Islamic standards." Bureaucratic self-interest was also at work: the Internet cafes were offering
long-distance calls at cut rates, costing the PTT an estimated $400 million in lost revenues annually.
Other examples of the mullahs' crackdown includ-ed an offi cial campaign to discredit foreign news
agencies such as the BBC and Radio Free Europe/ Radio Liberty, which beams news reports into the
Islamic Republic and posts them on their websites. These outlets were held up as instruments of for-eign
infi ltration. But Cold War history in particular militates against the success of these heavy-handed
tactics. Historians credit the spread of information technology with fueling the desire of Soviet-bloc
citizens for freedom. This suggests that, with the proliferation of the Internet and other advanced tech-nologies,
ordinary Iranians will continue – whether openly or surreptitiously – to tap into the fl ood
of information available electronically. Government organs may be able to slow the infl ux of information
down, but they can't stop it.
Huffing and Puffing in Tehran The Palestinian intifada continues to act as a brake

on liberalization in the Islamic Republic. The ongo-ing construction of Jewish settlements in the West
Bank and Israel's use of high-tech weaponry in military reprisals have given the conservatives a
powerful weapon against reform. Exhibit A: the second "Support for the Palestinian Intifada Confer-ence,"
a confab of terrorist groups held in Tehran in late April. In his opening address to representa-tives
of organizations such as Lebanese Hezbollah, Islamic Jihad, and the People's Front for the Libera-tion
of Palestinian – perennial members of the U. S. State Department's list of terrorist groups – Supreme
Leader Khamenei condemned the occupation of Pal-

estine as one of the "satanic conspiracies" hatched by America to sow discord in the Islamic world.
Sounding a familiar theme, Khamenei welcomed the destruction of the 1993 Oslo Accords and held
up Hezbollah as a model of how to deal with Israel. Iranian spokesmen have used the example of south-ern
Lebanon – supposedly a great military victory over Israel – to whip up support among youthful
Palestinians, as well as militant groups such as Hezbollah that enjoy lavish material support from
Tehran. While they reject the terrorist label, Iranian offi cials are increasingly open about their backing
for the groups that attended the Tehran conference. Even President Khatami has been forced to fall
in line. Khatami accused great powers such as the United States of blocking the self-determination of
the Palestinian people. He also asserted that the Israeli withdrawal from Lebanon and the successes
of the intifada had disproved the myth of Israeli invincibility. Some of this is undoubtedly postur-ing.
However, the accusation of coddling Zionists and their American sponsors has clearly taken on
additional potency in the current overheated politi-cal climate. The dinosaurs have a useful cudgel –
colluding with foreigners – to keep unruly reformers in line at home.

Was Tehran behind the
Khobar Towers Bombing? In early May the New Yorker magazine claimed

that FBI Director Louis Freeh had pinned the blame for the 1996 bombing of a U. S. Air Force barracks
in Saudi Arabia on the Iranian government. Freeh was preparing to recommend that U. S. Attorney
General John Ashcroft seek indictments against several offi cers from the Islamic Revolution Guard
Corps. In the immediate aftermath of the blast, which claimed nineteen lives, Riyadh rounded up
members of Saudi Hezbollah, a Shiite militant group dedicated to overthrowing the Wahhabi regime.
According to information provided by the Saudis to the United States, confessions from Hezbollah
members pointed to an Iranian collusion. However, despite a nominal joint investigation by Washington
and Riyadh, the United States was never able to independently question the suspects. Shortly after
their arrest, some were convicted and jailed by Saudi authorities. Other information also pointed
to an Iranian connection, but like in many terrorist cases defi nitive proof as to a single culprit has been
lacking. Tehran heatedly denied any involvement with
international terrorism. A Foreign Ministry spokes-man maintained that "such unfounded allegations
are being raised by circles which are concerned

June 2001 19
19Page 2021

by the expansion of relations between the Islamic Republic of Iran and Saudi Arabia." In other words,
Louis Freeh's report was part of a U. S. scheme to disrupt the continuing rapprochement between
Iran and its neighbors. Not likely. The extreme cir-cumspection displayed by the Clinton and Bush
administrations on the Khobar Towers affair argues just the opposite. Washington has been mulling
extending the olive branch to Tehran since 1999 and fears – rightly – that implicating Iran in the bomb-ing
would thwart any attempt to begin normalizing relations. Even more troubling for the White House,
formal charges could bring calls from Congressional hard-liners to abandon the legal route and pursue
military punishment of Tehran. Regardless of whether proof positive can be found
suffi cient to support indictments against Iran or even meet the less strenuous test of suffi ciency to
warrant military action, the problem for the United States remains the same. Terrorism is notoriously
diffi cult to prevent, and once an act is committed, legal action or military retaliation is of only limited
use, particularly when dealing with a state sponsor. Terrorism will continue to be a useful and effective
tool for opponents of the United States in the Gulf region, whether they are states or non-state actors.
U. S. responses will be constrained by the politics of the region and the real diffi culties of pinning blame
on any one source.
Improved Relations Between Washing-ton
and TehranÖ Not Improved ties between the United States and the

Islamic Republic remain only a distant possibility. In January 2001, Secretary of State Colin Powell
sparked interest by hinting that he would review U. S. sanctions and recommend lifting the bulk of them.
But hopes for normalization were soon dashed. As it has in the past, the U. S. State Department's annual
terrorism report profi led Iran as the leading sponsor of international terrorism. Events such as the April
conference on the intifada, not to mention abundant hardline statements by Iranian offi cials, have done
little to discredit that grim assessment. It should come as little surprise, then, that President George
W. Bush ruled out lifting the unilateral sanctions imposed in 1996. (In April a commission headed by
Vice President Dick Cheney suggested that lifting the sanctions would be one way of boosting world oil
supplies. Bush quickly squelched this recommenda-tion.) Indeed, legislation has been introduced in
Congress to extend the Iran-Libya Sanctions Act until 2006. Given the new bill's broad bipartisan support
and Bush's conservative predilections, passage is

a foregone conclusion. Relations between the two antagonists will remain icy.
Befriending the Russian Bear During a March visit to Moscow by President Khat-ami,
Russian president Vladimir Putin declared that his country would resume arms sales to the Islamic
Republic despite the likelihood that Russia will face unilateral American sanctions. (In 1995 Washington
and Moscow secretly agreed that the United States would refrain from imposing sanctions, provided
Russia stopped transferring arms by the end of 1999. Putin abrogated that agreement last December.) In
so doing, Moscow will multiply its leverage in the Middle East, which has languished since the dissolu-tion
of the Soviet Union. The military benefi ts to Iran are obvious. A power-ful
military is the foundation of the nation's regional aspirations. Iran's attempts to develop an indigenous
arms industry have met with indifferent success. The country still needs to replace many of its losses
from the debilitating Iran-Iraq War, which ended over a decade ago. Moreover, with certain notable
exceptions, Tehran's arsenal consists largely of older Soviet-and U. S.-built hardware – the latter of which
is diffi cult to maintain because of the U. S. embar-go on spare parts. While they agreed to no fi rm
contracts, Iran has expressed interest in high-tech air-defense missiles, as well as upgrades to its MiG
fi ghters and Russian-built submarines. Likely arms deals could be worth as much as $400 million annu-ally.

Conclusions Whither Iran? Certainly the Islamic Republic will
not vault into the camp of liberal republics any time soon – if ever. While they are ambivalent about
Khatami himself, clerics have uniformly denounced the "culture of liberalism" surrounding the president
and vowed to stamp it out. One student leader was recently imprisoned for advocating a referen-dum
on the future course of Islamic government – auguring ill for the cause of reform. If the president
smashes the opposing candidates on 8 June, it will confi rm the public's disaffection with the tight social
and economic controls espoused by the mullahs. Nonetheless, the reform movement faces an uphill
struggle whose outcome is exceedingly doubtful. True reform may have to await generational change
within the clergy. Even so, the Islamic Republic continues to pose
little real threat to energy security in the Gulf region. Indeed, its growing preoccupation with a resurgent
Iraq (refer to the Iraq chapter) could act as a brake on Iranian pretensions to regional supremacy. So long
as Tehran believes it needs friends such as Saudi
June 2001 20
20Page 2122

Arabia to counter Saddam Hussein's own ambitions, it will be less likely to menace their security. Limited
cooperation with the United States in the effort to overthrow Hussein is even possible, although Ira-nian
backing for Palestinian terror groups could stall any such convergence of interests. In any case, pow-erful
Western forces in the region remain a useful check against an Iranian relapse into military adven-turism.

June 2001 21
21Page 2223

Sheikh Sabah al-Ahmed al-Jabr al-Sabah, Kuwait's foreign minister and fi rst deputy
prime minister, has seemingly consoli-dated power within the cabinet and has
embarked upon an ambitious agenda addressing key foreign and domestic policy objectives. While
Sabah's ascendance does not signify the funda-mental structural changes sought by many in the
parliament (such as the separation of the position of crown prince from prime minister or greater
accountability to parliament in the consideration of cabinet appointments), it is a positive develop-ment.
With a wide array of challenges facing the Kuwaiti government, Sabah's cabinet may have the
best chance to move the nation forward, but many questions remain.

The Good News:
Foreign Policy Developments Since the cabinet shuffl e in early March, Sheikh

Sabah has directed a proactive and comprehensive foreign policy that has already paid signifi cant divi-dends.
Coming on the heels of the successful GCC summit in late December, Kuwait moved to improve
its often-strained relations with its brethren in the Middle East at the 27-28 March Arab Summit held
in Amman. The two items dominating the summit agenda were the continuing violence in the West
Bank and Gaza, and the UN-imposed sanctions on Iraq. Prior to the summit, Sabah visited Saudi
Arabia, Egypt, Syria, Lebanon, and Yemen in order to discuss the pending issues with the leaders of
those countries. Sentiment throughout the Arab world has coalesced around the plight of the Pales-tinians,
and therefore against Israel and its patron, the United States. The close relationships shared
by Kuwait and Saudi Arabia and the United States places internal domestic political pressure and exter-nal
pressure from other Arab governments on the leaders of the two Gulf states. Further, Iraq had
shrewdly exploited the Israeli-Palestinian confl ict to attempt to reestablish its leadership position in the
Arab world. While governments in the region may be skeptical, Saddam Hussein's adoption of the Pal-estinian
cause (such as the offer to send volunteers to liberate Jerusalem or providing fi nancial support
for injured Palestinians), has resonated on the streets of regional capitals.

As the summit began, it was clear that Iraq sought
to dominate the proceed-ings, forwarding the cause
of aid to the Palestinian Authority (PA), while seek-ing to gain support for a unifi ed Arab pledge to break
the UN sanctions without acknowledging Kuwaiti and Saudi security concerns. Sheikh Sabah and the
Kuwaiti delegation worked constructively toward the goal of Arab unity, and devised a draft communiquť
that would deliver a unifi ed pledge to support the Palestinian struggle and a united call for an end to
UN sanctions on Iraq. The latter was to have been made in return for some measure of closure on the
Iraq-Kuwait issue. Kuwait also agreed to provide $300 million to the Palestinian Authority, which in
itself was a quite a gesture, given Chairman Arafat's support for Saddam Hussein during the Gulf War.
More importantly, the Kuwaiti delegation agreed to a unifi ed Arab call to lift the UN sanctions on
Iraq, asking only for a three point resolution in the fi nal statement that would clearly articulate an Iraqi
agreement to end its claims upon and threats toward Kuwait. Even the idea of an Iraqi apology to Kuwait
for the 1990 invasion was dropped to move the pro-cess forward. The Iraqi request for a unifi ed Arab
pledge to break the sanctions (in defi ance of the UN) was dropped early on in the summit.
Only Iraq rejected the draft language. Iraq object-ed that a paragraph in the resolution calling for the
"reaffi rmation of the independence and sovereignty of the State of Kuwait" implied that Baghdad har-bored
bad intentions toward the small Gulf nation. Presidents Mubarak of Egypt and al-Assad of Syria
took it upon themselves to try to sell the agreement to the Iraqis, and King Abdullah also reached out
to enlist Iraqi agreement. In the end, all overtures failed. Sheikh Sabah eventually agreed to drop the
resolution to move beyond the stalemate, and the offi cial agreement was delivered without mention
of Iraqi sanctions. Only an unoffi cial declaration attached to the fi nal communiquť (which delivered
upon the pre-summit objective of calling for a resolu-tion to the Palestinian issue and provided signifi cant
fi nancial aid to the PA), described as a basis for further talks, included a general call for lifting of
sanctions on Iraq. King Abdullah agreed to continue to work on building an Iraqi rapprochement with its

June 2001 22
22Page 2324

Gulf neighbors, but this gesture did little to mitigate the tangible disappointment of many Arab leaders
that no agreement was reached on the Iraqi issue at the summit.
It seems clear that Iraq had overplayed its hand, effectively isolating itself within the summit caucus
and allowing for the Kuwaiti delegation to foster a position and a perception among the Arab states of
commitment to the greater Arab cause, tolerance, moderation, and maturity. For the often isolated and
ill-regarded Kuwaiti government, the importance of this acceptance by Arab neighbors (particularly
outside of the GCC) cannot be overstated. After the summit, Kuwait received a great deal of praise
throughout the Arab world for its performance in Amman. Sheikh Sabah then embarked on a trip
to France, Britain and the United States, where he met with Secretary of State Powell on 16 April and
offi cially renewed the U. S.-Kuwait defense pact on 18 April in a ceremony with Secretary of Defense
Rumsfeld. Meanwhile, other senior Kuwaiti offi cials visited Russia and China.
There seems to be a renewed realization in Kuwait that its security policy must move beyond a reli-ance
on the United States. Kuwait has used skillful diplomacy to build bridges outside of the American
relationship that may very well improve Kuwait's overall security in the long-term. Continuing support
for closer integration among the GCC states (includ-ing the passage of a law increasing freedom of travel
between the UAE and Kuwait, Kuwait-led GCC sup-port for Saudi Arabia's accession to the WTO, and
improvements in GCC collective defense capabili-ties) is one component. Support for greater Arab
unity and rebuilding diplomatic relationships dam-aged by the Iraqi occupation is another. Embracing
the Palestinian cause at the Amman summit, the May visit of King Abdullah to Kuwait amidst dis-cussions
of closer Kuwait– Jordan bilateral ties, and Sheikh Sabah's trip to Yemen highlight the conscious
strategy of ending Kuwait's isolation in the region, even among those who supported Iraq in 1990.
Lastly, Kuwait has attempted to obtain support from some non-traditional sources. On a global
level, Kuwait has worked to foster relations with Russia and China, through discussions on economic
agreements and/ or arms purchases. Even minor improvements in relations with these two perma-nent
Security Council members should downgrade the image of Kuwait as strictly bound to the U. S.
(and thus hostage to anti-American sentiment) in the event of some future Gulf confl ict. Perhaps more
interesting from a regional perspective, though, is Kuwait's initial forays into building a relationship
with Iran. The tentative agreement between Kuwait and Iran to embark on a $2.5 billion water fi ltration/

pipeline project and discussions on a security pact between the two are a clear acknowledgement that
relations with Tehran are preferable to dealing with Baghdad.

The Not So Good News:
The Domestic FrontÖ Unfortunately, not much has changed in the domes-tic

political realm. The nature of Sabah's infl uence over the new cabinet has been welcomed as a sign
of some progress by lawmakers in parliament. Most importantly, the seeming movement of crown prince
and Prime Minister Saad to the background has dampened the popular calls to divide those positions
and end the customary arrangement on succes-sion. However, the more general institutional confl ict
between the royal family-dominated cabinet and the popularly elected parliament will continue to
defi ne Kuwaiti politics, even if the intra-parliament (and intra-family) disputes have abated for the time
being. With a large number of crucial reform issues facing Kuwait's leaders, it will be diffi cult to move
forward without signifi cant compromise. The gen-eral presence of distrust between the two bodies will
seemingly ensure that any reforms proposed by the cabinet will be closely scrutinized and any progress
will be incremental, at best. One signifi cant step took place on 13 March
when parliament passed a bill allowing foreign direct investment (and foreign majority ownership of cor-porations)
in all industrial sectors excluding the oil industry. While the massive "Plan Kuwait" involving
foreign investment in the oil industry (discussed in the March 2001 Kuwait chapter) has moved forward
in terms of acceptance of bids and initial analysis of proposed sites, much negotiation between the
cabinet and parliament remains before any privatiza-tion becomes a reality in that key sector. Parliament's
general mistrust of the cabinet will only be ampli-fi ed through the privatization of Kuwaiti industry.
Already, sales of shares of government-controlled companies have been met with cries of favoritism
and corruption by members of parliament. Fears of a "Russian-style" reform program where sales of
public assets were seemingly made for the benefi t of the very few have already become common and
precipitated parliamentary inquires and demands for investigations. While certain less controversial
issues have passed parliament such as the removal of docking tariffs at Kuwaiti ports and laws facili-tating
freedom of movement between GCC states, measures targeted at fundamentally restructuring
the Kuwaiti economy will face stiff resistance and parliamentary demands for close oversight.

June 2001 23
23Page 2425

Economic development is clearly a high priority for Kuwait. Reforms within the domestic oil industry
and throughout Kuwait's other industries are criti-cal to long-term, broad-based economic prosperity.
Beyond this, there is a prevailing view within the Kuwaiti government that societal stability is predi-cated
on the ability of young people to fi nd gainful employment. An overwhelming number of Kuwaitis
(94 percent) are employed in the public sector. As Kuwait attempts to divest itself of assets and invite
foreign direct investment into its economy, lead-ers understand that an educated, skilled workforce
is a critical factor in both attracting investment and delivering long-term economic success. How-ever,
various Kuwaiti and foreign experts have noted a sense of entitlement and lack of entre-preneurial
spirit among Kuwaitis, particularly the young. Decades of an overarching social welfare
system, public domination of the economy, and even the lingering effects of the Iraqi invasion (which
has been blamed for a high occurrence of post-traumatic stress disorder and drug addiction among
younger Kuwaitis) present large obstacles to prepar-ing Kuwaiti society for a new era. Potentially painful
and politically unpopular domestic reform programs will be necessary, but will be diffi cult to achieve.
Similarly, attempts at social and political reform have not faired well recently. The high court threw
out a case demanding woman's suffrage on 21 April leaving proponents once again frustrated and search-ing
for an avenue to fi nally achieve their goal. The cabinet had reportedly agreed upon a draft law to
allow women to serve in the Kuwaiti police force, a move sure to provoke outrage from Islamic mem-bers
of parliament and a direct affront to the courts. The preeminence of conservative Islamic and tribal
members of parliament has proven a diffi cult chal-lenge to progress. Adding to the diffi culty, liberal
members of parliament (who often share the cabi-net's reform minded agenda) are often suspicious of
the power of the royal family and have consistently advocated greater transparency and limits on that
power. Building coalitions to pass and implement important legislation will be a primary objective
of Sheikh Sabah's government. The success of his government will ultimately hinge upon his ability to
work with parliament to bring meaningful change to Kuwait.

Other Developments The 20 March murder of Hedaya Sultan al-Salem,
a longtime advocate of women's rights and owner/ editor-in-chief of the infl uential Al-Majalis maga-zine,
sparked fears that the struggle for suffrage had taken a new violent turn. The arrest of a police offi -cer
for the shooting and reported involvement of

other offi cers led early reports to focus on Ms. Sul-tan's advocacy and political involvement. However,
the investigation has since shifted to Ms. Sultan's business dealings and the idea of her death being
motivated by conservative anti-women's forces has faded. However, it is instructive to understand how
the murder was almost immediately placed in the context of the women's rights issue. Clearly this
fundamental, unresolved confl ict will cast a large shadow over Kuwaiti politics for a long time to
come. On May 14, Defense Minister Jaber Mubarak
al-Hamad al-Salem announced that Kuwait would hold off on planned purchases of a number of new
weapons systems from the United States, including Apache Longbow and Black Hawk helicopters, Pala-din
self-propelled artillery pieces, and enhancements to Kuwait's command and control (C2) systems.
While the C2 upgrades, viewed as critical to Kuwait's intentions to closely integrate command and control
capabilities with GCC allies, are likely to go forward, the procurement halt indicates an important signal
of deference to parliament's concerns. The cabinet has been criticized by parliament for channeling too
few resources to readiness and training accounts and too much to procurement of new weapons sys-tems.
This sentiment has been echoed within other GCC states as well. With Kuwait and Saudi Arabia
attempting to build relations with Iran, a component of the rationale for obtaining advanced weapons has
been decreased.

June 2001 24
24Page 2526

Father and Sons The health of UAE president and ruler of Abu Dhabi
Sheikh Zayed bin Sultan al-Nuhayyan is increasingly problematic. Although Zayed has remained involved
in domestic as well as international policy, local tele-vision broadcasts depict him always seated, a further
indication of his frail health. With Zayed's health worsening in the early-1990s, the internal Abu Dhabi
ruling family debate over succession became faction-alized around three of Zayed's nineteen sons: Sheikh
Khalifa bin Zayed al-Nuhayyan, Sheikh Sultan bin Zayed al-Nuhayyan, and Sheikh Mohammed bin
Zayed al-Nuhayyan. Sheikh Khalifa, widely presumed to succeed
Zayed as the president of the federation, has been increasingly responsible for the daily affairs of state
since the mid-1990s. Zayed's latest medical diffi cul-ties no doubt increased Khalifa's role in managing
the UAE. While his current policies strongly suggest that he supports the slow political and economic
liberalization begun under Zayed, he has taken a more federalist – vice Abu Dhabi-centric – approach
to the emirates' political structure. In contrast to the apparent consensus on Khalifa's
accession, the succession process to become Abu Dhabi's crown prince remains less clear. Sultan and
Mohammed are held out as the most likely candi-dates for this position. Given that whoever becomes
the crown prince could vie for the federal presi-dency in the future, it is a highly coveted position.
Moreover, Khalifa's advanced age and questionable health means that he could pass the scene while in
offi ce relatively quickly. The crown prince would then be well positioned to take power and buck
the trend of decentralization of Abu Dhabi's power. Abu Dhabi has long dominated politics in the emir-ates
given its tremendous fi nancial clout and role as fi nancier for Dubai and the Northern Emirates.
Zayed, realizing the potential for division after his death, has taken steps to mitigate differences
by dividing government and commercial portfolios among his sons. Khalifa is the head of the Supreme
Petroleum Council (SPC) that controls the emirates' hydrocarbon sector; Sultan and Mohammed are
members of the SPC. Sultan has been appointed as chairman of Abu Dhabi's Public Works Depart-ment
(PWD). Mohammed is Chief of Staff of the UAE Armed Forces (UAEAF) and was allowed to

create the UAE Offsets Group (UOG), an organization aimed
at increasing the UAE's indus-trial base by stimulating foreign
investment and technology transfer. These posts, particularly the SPC, PWD, and
UOG, provide access to the state's immense fi nan-cial resources, enabling the maintenance of old
and development of new patron-client relationships. Zayed is also attempting to engineer a division of
political posts before departing the scene. Once Khal-ifa becomes president, political power within Abu
Dhabi – the most infl uential emirate within the UAE federal structure – may be split between Sultan and
Mohammed by having one assume the crown prince position with the other becoming deputy ruler of
the emirate. There are some indications that the rivalry
between the three senior brothers, coalescing around a coalition of Khalifa and Sultan versus the
younger Mohammed, has subsided in deference to their father. Khalifa is reportedly providing support
to Mohammed's efforts with the UOG, support previ-ously denied, and has shown a new willingness
to fi nance the poorer, yet politically problematic, Northern Emirates. Mohammed, the more visionary
of the three brothers, has pushed for additional Abu Dhabi fi nancial support to the other emirates as well
as additional economic liberalization measures in cooperation with Dubai's crown prince and federal
defense minister, Sheikh Mohammed bin Rashid al-Maktum.
These actions, while cooperative and stabilizing on the surface, represent jockeying for infl uence over
the post-Zayed era. Regardless of Zayed's mitigation efforts, his passing will certainly see renewed fric-tion
between shifting coalitions – alternating around Khalifa, Sultan, and Mohammed – composed of
royal and non-royal family elements. Such confl ict, which will likely elude public observation, could
hamper the UAE's domestic development, inter-national diplomacy, military modernization, and
broader commercial agenda.
Independent Minded True to form, Abu Dhabi continues to take a rela-tively

independent foreign policy stand on a variety of issues. On Iraq, the UAE remains a vocal critic of

June 2001 25
25Page 2627

UN economic sanctions and has called on regional countries to reopen trade links with Baghdad. Abu
Dhabi, while favoring restricting Baghdad militarily, views the ongoing U. S./ UK military operations over
the no-fl y zones and the UN sanctions as counterpro-ductive and as a potential source of future instability
in the Gulf. The UAE is still seeking to ameliorate the humanitarian situation, shore up Iraqi internal
stability (for fear of Iran taking advantage of a splin-tered Iraq), and prepare the way for reopening Iraqi's
market for UAE business interests. On Iran, the UAE is maintaining political pres-sure
over the Abu Musa and Tunbs islands issue. Emiri leaders hope that a Khatami electoral victory
will result in substantive, if limited, talks about the islands and Tehran's eventual acceptance of third
party mediation over the issue. However, real prog-ress is unlikely regardless of the Iranian election
outcome. Given the UAE's inability to infl uence Iran's behavior alone, Abu Dhabi will continue to
rely on regional forums to lambaste Tehran's per-ceived intransigence and prevent easing of Arab
relations with the Islamic Republic, particularly a Saudi-Iranian rapprochement. For example, during
the 28 March Arab summit in Jordan, Zayed criticized Tehran's unwillingness to accept the juris-diction
of a mediating committee composed of Saudi, Qatari, and Omani diplomats.
Iran remains the primary external threat for Abu Dhabi. The UAE has been particularly concerned
with Tehran's growing air and naval power, includ-ing the fl eet of three Kilo-class Russian-built diesel
attack submarines. Largely as a response to this threat, the UAE concluded a contract for a European-built
maritime patrol and anti-submarine warfare aircraft. Iranian asymmetric capabilities are also
of concern, given Tehran's potential use of the large Iranian expatriate population in Dubai and the
Northern Emirates to conduct intelligence collection as well as possibly terrorist operations against the
UAE directly or U. S. targets in the country.
Washington and Abu Dhabi Working at
Cross-Purposes The Bush administration's initial unwillingness to

continue a high profi le role in the Israeli-Palestinian confl ict was not well received in Abu Dhabi. The
UAE continues to provide medical and fi nancial assistance to the Palestinian Authority while press-ing
the United States and the European Union to take a more active role in ending the latest violence.
Refl ecting a much more independent foreign policy compared to other Arab states, the UAE has been
among the most critical of American policy in the region. The Bush administration will not likely allow

Abu Dhabi's rhetorical outbursts to harm an impor-tant bilateral relationship.
However, Washington will most certainly press for substantive cooperation from the UAE on America's
evolving Iraq policy. The United States is particularly concerned with the emirates' apparent complicity
in the illicit oil trade with Baghdad. This issue will likely come into sharper focus as a new sanctions
regime coalesces. Given the new administration's strategic reorientation on Iraq policy, U. S. patience
with Abu Dhabi cannot be assured, even with the bil-lions of dollars at stake for U. S. defense and energy
fi rms in the UAE market. Moreover, Abu Dhabi rec-ognizes the importance of American support for its
economic development and, ultimately, regime sur-vival against external threats.
As with the UAE's contract for the purchase of 80 Lockheed Martin F-16 Desert Falcon fi ghter aircraft,
Abu Dhabi hopes that American participation in the UAE's oil industry will further link Washington to
emiri security without compromising its indepen-dent foreign policy. Several U. S. fi rms are actively
involved in the UAE's upstream and downstream sectors. Most recently, ExxonMobil, along with Shell,
Totalfi na Elf, and British Petroleum, was asked to submit a bid for a substantial equity stake in the Abu
Dhabi National Oil Company's (ADNOC) subsidiary Zakum Development Company.

Potable Water Threat The UAE vulnerability to disruption of potable water
supplies was starkly illustrated when the Georgian-fl agged tanker Zainab – carrying smuggled oil from
Iraq – sank off the Dubai coast on 14 April. Along the emirates coastline, a series of desalination facil-ities
provide the majority of water for drinking and agricultural use throughout the country. The
recent spill, off Dubai's coast near multiple desalina-tion plants, threatened to foul the intake systems
that draw seawater for conversion into fresh water. Had this occurred, the shutdown or disruption of
desalination facilities would have resulted in an immediate water crisis, placing both lives and econ-omy
at risk. Although chemical and physical means may have slowed the spill's progress towards Jebel
Ali, such efforts would likely not have been suffi cient to prevent catastrophe had weather and current pat-terns
forced the oil ashore. The crammed oil and other commercial shipping
lanes that pass along the shorelines of the emirates are among the busiest in the world. This makes the
UAE particularly susceptible to unintended and mali-cious man-made environmental disasters. Moreover,
the Zainab and 23 other vessels interdicted this year by U. S. warships in emiri waters for smuggling Iraqi
oil represent only a tiny proportion of illegal ship-The
June 2001 26
26Page 27

ping transiting the Persian Gulf. The elusiveness of this illicit trade in the porous waters of the Gulf helps
mask and understate the potential threat of oil spills that lurks just beyond the emirates' shores.
While environmental danger is increasingly pos-sible, the oil spill also highlights the potential use
of sabotage against coastal desalination plants by state or sub-state actors. Divers equipped with either
biological or chemical toxins could target seawater intake lines. While conventional explosives could be
used in such an attack, a non-military grade biologi-cal or chemical pollutant would help conceal the
identity of the attacker and further complicate the UAE's crisis management responses. These offshore
intake systems could be reached undetected, as cur-rent security procedures are insuffi cient to protect
against such an attack. The intention and capability to conduct such oper-ations
are not merely products of the imagination. For example, Iran has both small boat and special
diver units capable of such activity. Moreover, both state and non-state terrorist actors routinely tran-sit
the UAE, crossing to and from South Asia, the Middle East, and Africa. Indeed, newspaper report-ing
has suggested that the materials used in the bombing of the USS Cole last October were obtained
in the UAE. Popular Islamic sentiment opposed to regional regimes linked to the United States could
further fuel such threats. The bottom line is that the UAE, like other countries in the Gulf, will remain
vulnerable to such non-traditional attacks that often defy detection and deterrence.

June 2001 27