U.S. Shifting Policy on Iraq: Will OPEC Care?

Summary

When OPEC convenes in Vienna June 5, it will do so as the United States moves toward major policy changes in the Middle East. The failure of U.N. sanctions to undermine Saddam Hussein's rule has neutered the American-led containment policy in Iraq. Now, the United States is focused on containing Iraq with a broader regional strategy that allows Baghdad to re-enter the global economic scene. The result will be a smaller U.S. military presence in the region but an increase in influence that brings a slew of security, political and economic benefits, including bolstering U.S. access to oil.

Analysis

Iraq is emerging from a decade of isolation despite American efforts to keep it cordoned off. U.S.-led efforts to rein in Saddam Hussein's military, political and economic ambitions are ineffective and have been declared meaningless by much of the international community. 

U.N. efforts to prevent Iraq from securing technologies to upgrade its armed forces have failed despite U.S. and British air patrols aimed at monitoring Iraqi military activities. U.S. Defense Secretary Donald Rumsfeld said June 4 that Iraq has improved its air defenses with the help of China and other nations. Moreover, the civilian population has borne the brunt of economic sanctions. Rather than weaken Saddam, the proceeds from the illegal smuggling of goods and arms into the country have strengthened his hold on power.

To regain its footing, Washington is compromising with the international community, allowing Baghdad to more easily re-enter the global economic scene and freeing it of most international sanctions and constant U.S. and British military patrols over its airspace. By relegating the containment of Saddam to a secondary status, the United States will wield greater influence in the region and in the process achieve some of its larger objectives, such as increasing access to oil, reducing the U.S. military presence in the region and balancing Iran's gaining position in the region. 

Washington has come to terms with its failed policy in Iraq. Together with London, Washington recently proposed a joint resolution before the U.N. Security Council calling for lifting many of the economic sanctions while continuing to monitor the import of military and commercial items that can be used to bulk up Saddam's weapons arsenal — so-called "smart sanctions." 

But the proposal has floundered. Chinese, Russian and French diplomats, among others, have objected to a lengthy list of items that Washington wants to prohibit Iraq from purchasing without prior approval. These items, including telecommunications and related technologies, they assert, would hinder Iraq's ability to emerge from its economic turmoil. 

On June 4, Iraq stopped exporting oil to all but neighboring Turkey and Jordan. The halt was in protest to a Security Council decision to extend by one month the program under which Iraq can sell oil, the so-called oil-for-food program. It is normally extended for six months. The one-month extension was done to give council members time to study the U.S.-British proposal.

Against this backdrop, the Bush administration will allow Baghdad to re-enter the global economic scene rather than attempt, futilely, to impose unwieldy restrictions on goods that have obvious commercial uses but can also be applied to military improvements. In trying to match U.S. policy with the security, economic and political realities in the region, Washington will look to increase the production of, and U.S. access to, petroleum, while scaling back overseas military commitments and, ultimately, offsetting Iranian ambitions in the region. 

Such a change in the U.S. approach is being forced on Washington by recent developments that highlight the extent to which its containment policy toward Iraq is outdated. 

This was most vividly demonstrated when two senior U.S. military commanders recently recommended that U.S. and British air patrols over no-fly zones in northern and southern Iraq, in place since the end of the Gulf War, be scaled back or terminated altogether. 

Senior military officers fear that Iraqi air defenses have been upgraded to the point where allied pilots are at high risk of being shot down, deepening U.S. military involvement in Iraq at a time when it is seeking to reduce overseas military commitments, particularly open-ended ones. 

With the reported assistance of China, and in direct violation of U.N. sanctions, Iraq has upgraded its air defense network with fiber optic communications that connect surface-to-air missile batteries and radar sites into a more effective defense umbrella. The improvements led to U.S. air strikes in early March.

Rumsfeld on June 4 repeated the U.S. allegation, which was denied by the Chinese government, that Chinese workers were in Iraq early this year to install fiber-optic cables intended to give Iraq's air defense network a greater capability to zero in on U.S. and allied planes. The Pentagon cited the fiber-optics project as one reason for launching the bombing raid against Iraqi radar and other air defense sites in southern Iraq.

Washington's shift in its Iraqi policy coincides with the re-emergence of Iran as a regional military and economic power. Under President Muhammed Khatemi, Iran has moved to reform its Islamic political system, and the United States, although it renewed unilateral sanctions against Tehran in March, has taken steps to open up cultural ties between the two countries. 

Iran continues to advance its military capabilities with the aid of European and Asian countries that regularly provide Iran with technical know-how and expertise. This has enabled Iran to develop a highly capable arms-manufacturing base of its own.

On May 31 Iranian Television announced the successful test of a new surface-to-surface missile, the Fateh (Victorious) 110, which uses "composite solid" fuel and was built by Iran's arms industry. Meanwhile, Iran continues to develop, with Russian and North Korean assistance, long-range ballistic missiles, including the Shahab-3, with a range of 800 miles and the capacity to hit targets in Israel. The Shahab-4, with a longer range, is also under development but has yet to be tested.

Just as worrisome to U.S. policy makers, Iran has recently taken steps to threaten Iraq. In April, Iranian forces attacked Iraqi bases in the most intense rocket barrage since the 1980-88 Iran-Iraq War. In yet another hint of possible Iranian military designs toward its neighbor, an estimated 20,000 Iranian troops have been deployed near the Iraqi border this week as part of a major military exercise, according to Middle East Newsline.

With both countries coming out of their shell, despite its best efforts, Washington will have greater influence in the region as a whole if it accepts the reality that scrapping the containment policy toward Iraq holds little danger and much benefit, given that it has done little to contain Saddam anyway. By dropping the policy, it will reap a variety of rewards.

In the short term, a lifting of economic sanctions against Iraq will dovetail with Washington's new energy policy emphasizing greater production over thrifty consumption and thus requiring greater access to the region's oil reserves. Iran and Iraq together control about 20 percent of global oil reserves and 18 percent of gas reserves. The two countries' combined oil revenues last year totaled $45 billion. 

With the lifting of sanctions against both countries, U.S. corporations will have significant opportunities to profit from the exploration, extraction, transport and sale of these resources.

Over the longer term, relegating the containment of Saddam to the back burner in favor of a more regional security policy will help the United States gain more sway in the region than it has enjoyed since the Gulf War while substantially reducing its more than 20,000 military personnel committed there. It will also help the United States influence the direction Iran takes in the coming years. And an opening to Iran will come next, as needed, to keep Saddam in check.

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