On August 4, 1990, Saddam appointed a 9-member military junta composed of Kuwaiti Army officers headed by Colonel Alaa Hussein Ali, to lead the “Provisional Government of Free Kuwait”. Then on August 7, Kuwait was declared a republic (“Republic of Kuwait”). The next day, however, the Iraqi government announced the political and territorial merger of Iraq and Kuwait. Three weeks later, on August 28, Iraq declared a Kuwait Governorate, Iraq’s 19th province, under Governor Ali Hassan al-Majid, Saddam’s first cousin (and also better known as heading the al-Anfal campaign (1986-1989), where Iraqi forces violently quelled an uprising by Iraqi Kurds during the Iran-Iraq War).
A few hours into the Iraqi invasion, the Kuwaiti government had appealed to the international community for assistance. In a number of resolutions, the United Nations Security Council (UNSC) condemned the invasion, demanded that Saddam withdraw his forces, and imposed economic sanctions on Iraq. The Arab League, the regional body in which Iraq was a member, also condemned Iraq’s aggression. On the invitation of Saudi King Fahd who felt that his country would be invaded next, the United States sent troops to Saudi Arabia. The international community, and particularly the U.S. government, entered into negotiations with Iraq regarding the withdrawal of Iraqi forces from Kuwait. These talks subsequently broke down, leading to the Gulf War, where U.S.-led coalition forces attacked Kuwait to drive out the Iraqi Army.
(Taken from Iraqi Invasion of Kuwait – Wars of the 20th Century – Volume 4)
Background On June 19, 1961, Kuwait gained its independence from Britain. In 1963, Iraq, which by this time had become a republic and was presently governed by a military government under General Abd al-Karim Qasim, pursued its claim of ownership to Kuwait based on historical grounds, and threatened to invade. Swift intervention by Britain and Arab countries, which sent military units to defend Kuwait, forced Iraq to back down. Then in 1963, Iraq appeared to acquiesce, declaring that it recognized Kuwait. But tensions remained throughout the 1960s and 1970s, which sometimes broke out into border clashes that included a more significant incident where Iraqi forces attacked and seized control of the Al-Samitah border outpost in Kuwait. Subsequent mediation efforts by Saudi Arabia succeeded in persuading Iraq to withdraw from occupied Kuwaiti territory.
Meanwhile, Iraq also had a long-standing border dispute with Iran, its eastern neighbor, which broke out in September 1980 into total war (the Iran-Iraq War, separate article) following the success of the Iranian Revolution that transformed Iran into a fundamentalist Islamic state. Iran’s new Islamic government then called for the overthrow of “un-Islamic” Arab monarchies, alarming Gulf state monarchical governments including Saudi Arabia, Kuwait, and the United Arab Emirates, which gave large financial assistance in the form of loans to Iraq. By this time, Iraq was ruled by Saddam Hussein. Iraq-Kuwait relations improved dramatically, and Kuwait’s $14 billion loan to Iraq allowed the Iraqi Army to reverse its losses against Iran and take the initiative.
By the war’s end in August 1988, Iraq was in deep financial crisis, with its oil industry severely affected by the widespread destruction of oil infrastructures. Before the war, Iraq was awash in cash, holding some $35 billion in foreign reserves, but by 1988, was mired in $80 billion in foreign debt to various Western and Arab countries. Then in negotiations with its Arab creditors, the Iraqi government declared that its loans must be written off on the grounds that Iraq singlehandedly stopped Iran’s hegemonic ambitions and thus prevented the overthrow of the various Arab governments in the Middle East. Tariq Aziz, Iraq’s Foreign Minister, remarked thus, “How can these amounts be regarded as Iraqi debts to its Arab brothers when Iraq made sacrifices that are many times more than those debts in terms of Iraqi resources during the grinding war and offered rivers of blood of its youth in defense of the (Arab) nation’s soil, dignity, honor, and wealth?”
Furthermore, Kuwait exceeded its oil production quota imposed by the Organization of Petroleum Exporting Countries (OPEC), causing a glut in the international market and driving down oil prices. The Iraqi government complained that the low world prices meant lesser revenues, and therefore lower capacity for Iraq to repay its loans and restore its war-damaged oil infrastructures that were needed to rebuild the country.
Another source of dispute was the Rumalia oil field, located between Kuwait and Iraq and inside both countries’ territories, in which Iraq accused Kuwait of using an oil extraction technique known as slant drilling in order to pump out oil inside Iraq. The Iraqi government demanded payment for the “stolen” oil. Kuwait vehemently denied the accusation.
With economic troubles mounting, Saddam began to believe that a conspiracy stirred up by neighboring countries was aimed at undermining his country. Consequently, the Iraqi leader turned his appeals for financial reprieve into open threats, at one point remarking (in reference to Iraq’s request for more loans), “Let the Gulf regimes know, that if they will not give this money to me, I will know how to get it.”
On July 16, 1990, on Saddam’s orders, units of the Republican Guard, Iraq’s elite force, deployed along the border with Kuwait. By the following day, the arrival of more units increased Iraqi strength to 10,000 troops and 300 tanks. And by July 25, Iraq had massed some 30,000 troops (in four divisions) and over 800 tanks along two fronts on the border.
United States intelligence detected this military movement, which later was disseminated by the U.S. media. On July 25, 1990 April Glaspie, the U.S. Ambassador to Iraq, in a meeting with Saddam, indicated that the U.S. government was aware of the Iraqi military’s deployment and that this was a cause for concern. However, Ambassador Glaspie also said the United States has “no opinion on Arab-Arab conflicts, like your border disagreement with Kuwait”, a remark that has since generated controversy among political analysts, one point being that the United States would not intervene militarily if war broke out between fellow Arab Iraq and Kuwait.
During the closing week of July 1990, with mediation efforts by Egyptian President Hosni Mubarak, Kuwaiti and Iraqi representatives held talks in Riyadh and Jeddah, Saudi Arabia, which also failed to reach a settlement despite Kuwait agreeing to pay $9 billion of the Iraqi government’s demand of $10 billion for Iraq’s purported revenue losses in the Rumalia oil field.