It will be hard to bluff Saddam Hussein out of his booty. Eternal vigilence is the price of security as well as the price of freedom. That troubles would occur in the Middle East, the world's tinder box, seems foreordained. The timing may be argued, but scarcely the combustibility. That such troubles would become more likely as world oil demand builds toward capacity levels also seems foreordained judging from prior experience -- because close-to-capacity oil production significantly increases the leverage of regional powers while reducing their susceptibility to outside influence.
Moreover, the truce in, if not the end of, the Cold War casts us back into traditional power politics in which nations act from historical animosities or a desire for prestige or loot. Though Americans find it difficult to come to grips with ruthlessness or fanaticism in foreign leaders, in these times such traits may serve those leaders well. Saddam Hussein is not the kind of lad who would be elected class valedictorian in an American high school. Utterly ruthless, he was brought up in an environment in which the non-ruthless failed to survive. No doubt, he deserves much of the moral opprobrium that has been heaped upon him. But calling Saddam a thug scarcely represents a breakthrough. The invasion raises a few more relevant questions.
Should anyone have been surprised? No doubt we have reason to be distressed, but no one should have been surprised that the invasion came when it did. Iraq has never accepted Kuwait's legitimacy, and Kuwait has long been a thorn in Iraq's side. While nothing is predictable with confidence, that an invasion was a lively possibility was clearly indicated by the sequence of events. Irritation of oil producers, and notably heavily-indebted Iraq, with the OPEC "cheaters" has been building since the spring. But early in July King Fahad, the Saudi monarch, had persuaded both Kuwait and the United Arab Emirates to lower production and to live within their quotas. The acceptance of restraint was later confirmed at an OPEC meeting. The problem of overproduction had been solved in principle. It was only after such accommodation that on July 18 Saddam Hussein issued his thunderous accusations and threats and began menacingly to move his forces. His bombast went far beyond anything required to underscore the need to observe the production limits. Apparently more was afoot. I myself on July 19 sent a warning to the White House that Saddam Hussein was seeking to fashion a casus belli. Given the history, the bombast and the sequence of events, no one should have been surprised by the ensuing events.
Of course, there was the usual wishful thinking, which was reinforced by Saddam's reassurances. For Iraq's neighbors, hope tended to obscure the harsh realities. (It is difficult to face reality, when there is little that one can do about it.) For ourselves, we tended to be far more impressed by our "signals," military maneuvers and implied threats than were others. Through a quick military move, Saddam could make himself master of 70 billion barrels of proved reserves (and probably much more), almost double his production capacity, eliminate some of his indebtedness and ease dramatically the problems of servicing the remaining debt. Brutal perhaps, but scarcely irrational, Saddam acted on traditional raisons d'etat; he is no "madman." He might readily join Tammany Hall politician George Washington Plunkitt in declaiming: "I seen my opportunities -- and I took 'em."
That opportunity was significantly augmented by the evolving state of the oil market. Oil demand has been growing steadily, encroaching on sustainable capacity. Today, just as in the early '70s, there is little spare capacity left -- this spring just a couple of million of barrels a day, virtually all in the Persian Gulf. Worldwide, we have been operating at some 97 percent of sustainable capacity: OPEC, the marginal supplier, at more than 90 percent. The entire world becomes vulnerable. It means that an embargo of Iraq's (and Kuwait's) oil, if successful, would drive the world oil price up to $40 a barrel or more. Saddam Hussein's timing could not have been more propitious. He could be assured that any threat not to buy his oil would be an idle one.
What are the consequences? The consequences are easy to discern and simple to state. With respect to the oil market, Saddam's move vastly increases his power to persuade or intimidate the Gulf oil producers, who alone have spare capacity. This will simply speed up the adjustment to higher oil prices, which were more or less inevitable at a somewhat later date. But Saddam Hussein has no reason to wish to disrupt the oil market. When things settle out, he will want to stabilize and to exploit that market.
The geopolitical consequences are more serious. Iraq's neighbors are badly frightened. None, including Saudi Arabia, has but a fraction of the military capacity necessary to stand up to Iraq. With Saudi Arabia and the entire Arabian Peninsula at risk, there is at least the possibility of much of the Persian Gulf's oil reserves being under the domination of a single, not entirely friendly, power.
What should be done? Charting our course on this matter is constrained by two unpleasant realities. First, Saddam Hussein did not make his decision lightly. It was not at all difficult to anticipate the international reaction. Because he has decided to accept the diplomatic flak, and has already paid the price, it will be hard to bluff him out of his booty. Short of credible military pressure, it is difficult to believe that Saddam will back off more than to allow a puppet regime to exist in Kuwait. Diplomatic maneuvers may tend to become ends in themselves, but in these circumstances they are pretty much throwaways.
Second, at this time we lack the military resources in the region. This is only partly our responsibility. Given our role as Israel's chief supporter, the Gulf states have been unwilling either to provide us with appropriate base facilities or even to permit us to be visible. They wanted the U.S. presence to be "over-the-horizon." But "over-the-horizon" is clearly insufficient in these circumstances (a reality Kuwait blithely disregarded). Moreover, the maneuvering inside the Gulf of a tiny naval force, whether in joint maneuvers with the United Arab Emirates or not, is a weak signal -- reminiscent of the endless signaling to North Vietnam done in the Johnson years. Such signals may suggest weakness rather than strength and, if so, represent an inducement rather than a deterrent to action.
Given these constraints, three courses of action seem indicated.
1. The first is negative: Don't flail around too much. Posturing may make us feel better and may serve as a smoke screen to hide the regrettable fact that there is no effective policy option available to respond to the seizure of Kuwait. Too much flailing around would underscore our own ineffectualness and will mean that others take us less seriously. What is referred to as "concerted diplomatic activity" may make all of the participants feel better, but is unlikely to impress Saddam Hussein. Conditions for the imposition of economic sanctions are scarcely propitious and may (as economic sanctions frequently do) impose more harm than good.
We are now attempting to persuade all nations not to buy Iraqi oil. Success in that attempt would clearly backfire. Iraq's and Kuwait's production together amounts to 10 percent of Free World output. Iraqi production alone probably exceeds total spare capacity. Thus, truly to cease buying such crude means a sharp rise in price -- until cut off by unemployment. The other industrial nations, less fastidious about their supplies than we, are unlikely adhere to any such embargo.
Other nations will be buying Iraqi crude at knock-down prices, but that is better than our being successful in our attempt, for that would be devastating. If, however, we wind up being the only ones to deny ourselves Iraqi (and presumably Kuwaiti crude) that would represent an ironic twist on the oil embargo of 1973. Again the United States would be singled out not to receive oil supplies from the Middle East, but this time it would be a self-embargo reflecting our own initiative.
2. It is essential for us to build an effective military deterrent that discourages Saddam Hussein from further action and provides protection for the rest of the Arabian Peninsula. President Bush has already furthered this process by his clear warning to Iraq not to proceed against Saudi Arabia. But his statement needs to be buttressed by further indications to Saddam of the punishment that would be meted out if he crosses the Saudi frontier. Ideally, that serious deterrent would include an American presence that would make unmistakably clear to Saddam that crossing the frontier means an unavoidable clash with American forces. Whether in these altered circumstances, the Saudis may recognize the need to accept such a presence is, of course, up to the Saudis. They must weigh the risk, and they will do so, wondering to what extent they can rely on the Americans -- and recalling, as they will, our performance in both Lebanon and Iran. But the Carter Doctrine and the Reagan Corollary (as well as our clear national interest) make the protection of Saudi Arabia central to our post-Cold War international position.
3. Finally, this country should attempt to get serious about energy policy. We shall have to pay for our earlier neglect. We are just now passing the 50 percent mark in oil dependency -- a record. In four years U.S. production has dropped by more than 2 million barrels per day. Imports have almost doubled and are now approaching 9 million barrels per day. Next year our oil import bill will be $75 billion. On our present trends our oil import bill in the mid-'90s will be well over $100 billion -- and we would be importing 10 to 11 million barrels a day (if it were available).
Energy policy has been drifting for a decade.
Indeed, we have had a de facto policy -- of growing dependence on the Gulf and on OPEC. During the Reagan years, all that we had were panegyrics about "the magic of the marketplace." In principle, the Bush administration has taken a kinder and gentler attitude toward the concept of energy strategy than its predecessor, but we are now approaching the second anniversary of Mr. Bush's election, and we still have no concrete manifestation reflecting that change in attitude. Failure to act has its consequences. The Iraqi invasion of Kuwait underscores the constraints that growing energy dependency has placed on our ability to act.
The nature of the international system in the post-Cold War world is now being shaped. Whether or not this nation can effectively provide leadership is being carefully studied and remains to be demonstrated. Given the vital stakes, and given our clear commitment under the Carter Doctrine, how we provide security for the Gulf and for Saudi Arabia will provide a critical test. The writer, a counsellor at the Center for Strategic and International Studies, is a former defense secretary, energy secretary and director of the CIA.