Social Studies: The Invasion of Kuwait

Social studies notes Chapter 1 The Invasion of Kuwait, also known as the Iraq-Kuwait War, was a major conflict between the Republic of Iraq and the State of Kuwait, which resulted in the seven-month long Iraqi occupation of Kuwait, which subsequently led to direct military intervention by United States-led forces in the Gulf War. [edit] Dispute over the financial debt Kuwait had heavily funded the 8 year long Iraqi war against Iran. By the time the war ended, Iraq was not in a financial position to repay the $14 billion it borrowed from Kuwait to finance its war.[6] Iraq argued that the war had prevented the rise of Iranian influence in the Arab World. However, Kuwait's reluctance to pardon the debt created strains in the relationship between the two Arab countries. During late 1989, several official meetings were held between the Kuwaiti and Iraqi leaders but they were unable to break the deadlock between the two. [edit] Economic warfare and slant drilling According to George Piro, the FBI interrogator who questioned Saddam Hussein after his capture (in 2003), Iraq tried repaying its debts by raising the prices of oil through OPEC's oil production cuts. However, Kuwait, a member of the OPEC, prevented a global increase in petroleum prices by increasing its own petroleum production, thus lowering the price and preventing recovery of the war-crippled Iraqi economy.[7] This was seen by many in Iraq as an act of aggression, further distancing the countries. The collapse in oil prices had a catastrophic impact on the Iraqi economy. According to former Iraqi Foreign Minister Tariq Aziz, "every US$1 drop in the price of a barrel of oil caused a US$1 billion drop in Iraq's annual revenues triggering an acute financial crisis in Baghdad."[5] It was estimated that Iraq lost US$14 billion a year due to Kuwait's oil price strategy.[8] The Iraqi Government described it as a form of 'economic warfare,' which it claimed was aggravated by Kuwait's alleged