The Iraqi economy was devastated by the war. The national debt was huge, despite considerable aid from other Persian Gulf states that did not want to see Iranian-style revolutionaries increase their power. With the end of the war, the Gulf states wanted their money back. Hussein could not demobilize his million-man army because there were no jobs for the soldiers. Worse, the price of oil—Iraq’s chief export—was going down at the end of the 1980’s. Desperate, Hussein turned his attention to Kuwait.

Kuwait was one of the oil-rich Gulf states which provided loans to Iraq during the Iran-Iraq War. The little emirate had not existed until the demise of the Ottoman Empire, at which time the British created the modern map of the Middle East. Under the Ottomans, Kuwait had been a part of what was to become Iraq. Given the very limited access to the Persian Gulf enjoyed by Iraq, the Iraqi state had long coveted Kuwait. The situation under the Ottomans gave Iraq a pretext of ownership, if a somewhat flimsy one. Further, Kuwait was tremendously wealthy.

For Hussein, conquest of Kuwait promised to solve a number of problems. Control of additional oil wealth would help the cash-flow problem. Eradication of the Kuwaiti state would obviate much of the Iraqi debt while bringing billions into the Iraqi coffers. Conquest of Kuwait also might bring the other Gulf states to the table in a much more compliant frame of mind regarding Iraq’s debts to them. Iraq would have an invaluable addition to her coastline, plus the port of Kuwait City. It was a promising package. Thus on August 2 1990, Hussein sent his elite Republican Guard across the Kuwaiti border.

Worldwide condemnation was immediate. The United States demanded that the Iraqis withdraw from Kuwait and began immediate deployment of the 82nd Infantry Division (Airborne) to Saudi Arabia, which now appeared to be under threat of imminent invasion. The US Central Command (CENTCOM) was now faced with the war in the Persian Gulf for which they had trained and prepared for more than a decade.

Although the United States and France both did business with Iraq, the principal supplier of Iraqi military hardware was the Soviet Union. Soviet advisors and technicians were to be found throughout Iraq, and relations between Baghdad and Moscow were cordial. In the West, the initial assumption was that the new hard-line Soviet government was behind the invasion of Kuwait. Comparisons with the Korean War were on the airwaves and in the halls of power throughout the West before the Iraqi Army had reached the southern border of little Kuwait. If the heavy divisions of the Republican Guard did strike into northeastern Saudi Arabia, they would grind the light troops of the US 82nd Airborne into the sand. By the time the first elements of the 82nd Airborne Division were winging their way to the Gulf, the only real question seemed to be whether the Soviets would direct Hussein to invade Saudi Arabia, thereby bringing the majority of the world’s petroleum reserves into Soviet hands.

In fact, the Soviets were as surprised as anyone by this turn of events. Hussein had neither sought nor received approval from the Kremlin for an invasion of Kuwait. He ignored Soviet attempts at communication during his two-day operation in Kuwait. Only when the US began deploying CENTCOM did Hussein respond to Moscow’s calls.

Now, with the Iraqi Army in firm control of Kuwait, the Kremlin faced a dilemma. How to make the most of the situation?

The Kremlin had ears, and Danilov knew the Americans thought the Soviet Union was behind the Iraqi invasion of Kuwait. Indeed, it was hard to see how the Americans would believe otherwise. The US had persisted in seeing every Communist action around the world as a part of a grand scheme directed from Moscow long after it should have been obvious that this was not the case. The Americans blamed the Soviets for Korea. To a lesser extent, they blamed the Soviets for Vietnam (despite the fact that the majority of aid for North Vietnam came from China). In the Gulf in 1990, the US was presented with a worst-case scenario of a Soviet client invading an important oil-producing state that was friendly to the West. How could the Americans not see it something done to Soviet advantage?

Many of the Kremlin hard-liners argued the very same thing. Though they had not instigated the Iraqi action, the Soviets stood to gain enormously from it. With no effort on their own part, the Soviets were looking at a situation that could deny the West some of the Gulf oil upon which it was dependent. With a little more urging and a guarantee of Soviet protection, Hussein could be moved to take northeastern Saudi Arabia and most of the Saudi oil fields. With the majority of the world’s oil reserves in Soviet hands, the West could be leveraged into providing food and loans to the USSR. A Soviet nuclear guarantee to Iraq would prevent the Americans from using nuclear weapons against Iraq, while a steady supply of Soviet parts and equipment to Iraq would be more than sufficient to offset whatever forces the American could get to the Gulf over the next few months.

Danilov and a few of his more visionary allies saw things differently. The hard-liners were right that Iraqi seizure of the Saudi oil fields would put the West in a bad situation. An Iraqi invasion of Saudi Arabia was likely to backfire. While it was true that the heavy divisions of the Republican Guard would destroy the 82nd Airborne, the United States hardly could be counted on to take this lying down. CENTCOM would continue to deploy to Saudi Arabia—to whatever port could receive the American equipment. The Iraqi Army lacked the troops and the logistical capability to occupy the ports of Saudi Arabia on the Persian Gulf and Red Sea, plus the ports of the United Arab Emirates, Qatar, and Oman. The United States would base air and ground units in whatever portion of the Saudi Peninsula was available to them, then open operations against Iraq. The result would be a massive US expenditure, a general Western shift to non-Gulf sources of oil and an overall lessening of consumption, and an heightened American enmity with the USSR that would last for years to come.

The Kremlin hard-liners countered that the United States had no stomach for a protracted war in the Gulf. With the aid of Soviet submarines and other naval power, the ports ringing the Saudi Peninsula might be closed to the Americans. Faced with the prospect of fighting their way into Omani or Saudi ports, followed by a campaign over long stretches of desert against an opponent using modern Soviet weapons, the Americans would concede the point. The fact that intense fighting in northeastern Saudi Arabia and Kuwait would ruin the very oil wells the US wanted to control would only make the option of bargaining with the Soviet Union that much more attractive.

Seeing that the Kremlin was deadlocked on the issue of whether the Americans would continue to fight in the Gulf once the 82nd Airborne had been smashed, Danilov changed tactics. He asked his fellow top Communists, who sets policy for the Soviet Union? Regardless of the potential usefulness of current development in the Gulf, the fact remained that Hussein had not obtained Soviet permission before starting his adventure in Kuwait. As a result, the Soviet Union was thrust into a situation in which could not plan, only react. Supporting Iraq now would set a very bad precedent. Other Soviet client states might take unilateral action for their own reasons in their parts of the world, thereby dragging the Soviet Union into one confrontation with the West after another. Sooner or later, the Americans would fight. More to the point, Moscow was supposed to set policy for the client states, not the other way around.

In the light of the current situation, Danilov and a few of his supporters did not agree that the West could be extorted into trading food for oil. More likely, the West would be so incensed and threatened that they would refuse to trade. Non-Arab members of OPEC, as well as non-OPEC oil producers like Mexico and Norway, would be glad to make up the difference in global oil production and reap the profits of higher oil prices.

There was another factor to consider. Hussein had invaded Kuwait because his economy was ailing. Even with Kuwait under his control, Hussein owed billions to other countries. Defaulting on that debt or even conquering the other Gulf states (a feat which the Soviet advisors in Iraq did not think was possible) would not solve all of Iraq’s problems, because Hussein needed hard currency to provide jobs for his million-man army. The Soviet Union could not provide hard currency for Iraq. To obtain hard currency, Hussein would have to sell oil to the West sooner or later, at which point the relationships between the USSR, Iraq, and the United States would become quite complex. Moscow might be put in the position of currying favor with a client state as opposed to the other way around, which again was contrary to the way things were supposed to be.

As the US 82nd Airborne was landing in Saudi Arabia, the United States began assembling support in the United Nations. Most of the UN believed as the United States did that the Iraqi invasion of Kuwait was a Soviet-inspired scheme. Western governments which had rebuffed Danilov’s efforts to obtain grain, credits, and machinery saw the invasion of Kuwait as a Soviet response. Given the events of the Black Winter, the United States had a certain currency in its efforts to build a coalition of nations to oppose the Iraqi action.

The US ambassador to the UN issued a thinly-veiled accusation that the USSR had masterminded the invasion. Naturally, the Soviet ambassador denied any wrongdoing.

At this point, the Soviet Defense Minister, who previously had supported getting Hussein to invade Saudi Arabia, changed his argument. If a US-led alliance did assemble forces in Iraq, as appeared likely, the enemy would be providing the Soviet Union an excellent chance to see the Western powers fight. The mood at the UN made it seem like the Americans were going to fight after all. That being the case, and given that Hussein had not sought permission for his actions, why not let Iraq stand on its own? If Hussein did not quickly give up Kuwait, the US-led alliance would have to attack. This would be a superb opportunity to observe the state-of-the-art in American war fighting without any risk to the USSR. At the same time, the USSR could send the message to the other client states that if they acted on their own, they would be hung out to dry. The Soviet Union would not be dragged into regional conflicts without prior consultation.

With the support of the Defense Minister, Danilov made his policy choice. He invited Bush to an emergency summit meeting in Switzerland in the second week of August. There, he and Bush came to terms. In two days of meetings that were often one-on-one, Danilov made it clear to Bush that the USSR had nothing to do with the Iraqi invasion of Kuwait and that the Soviet Union wanted no confrontation with the West. Bush told Danilov that he wanted Moscow to order Baghdad out of Kuwait. Danilov replied that he didn’t believe Hussein would respond to that, but he promised to give the strongest advice he possibly could.
To further impress Bush with his desire to normalize relations with the West, Danilov offered to issue a public proclamation condemning the Iraqi invasion. Soviet military aid would cease until Iraq pulled out of Kuwait. Perhaps most importantly, the USSR would support a UN resolution demanding an Iraqi withdrawal from Kuwait backed by military action if Hussein refused. Further, the Kremlin would line up as many of its clients as possible to support the US-led effort in the UN.
Bush returned to Washington and waited for the Soviets to play their part at the UN. When Danilov proved good to his word, Bush had the grain embargo lifted. When some members of Congress protested, Bush made it clear that he felt the Danilov regime was one the US could work with “under certain conditions.”

Hussein refused to give up Kuwait. He was certain the West would bargain with him for the oil. He was equally certain that the USSR would back him again if he could score a battlefield success. Also, successful resistance on the part of the Iraqis would put Hussein in the forefront of the Arab world. This would make him impossible for the superpowers to simply manhandle. The Iraqi Army began to dig into Kuwait.

By the time the US XVIII Airborne Corps had finished its deployment to Saudi Arabia, it was obvious that Iraq was not going to invade Saudi Arabia. It was equally obvious that the US-led Coalition was going to have to eject the Iraqis from Kuwait. With the support of the Soviet Union, the Coalition had brought nations like Syria into the fold. To liberate Kuwait, the US was going to need more forces and additional diplomacy.

At a second summit, this one in Reykjavik, Bush and Danilov talked candidly about their desire for good relations. Notes written by Bush during the meeting indicate that Danilov told him a good deal more about his thinking than even people in the Kremlin knew. Danilov believed that the United States and the Soviet Union would always be rivals, but they need not be enemies. He told Bush he believed the military competition between East and West was no longer a viable option. He told Bush that while the Party fully intended to retain power in the Soviet Union, he intended to introduce reforms. He would have to do so in a more gradual manner than Gorbachev had done, or the remaining hard-liners would purge him as well. However, he hoped that over the course of the next ten years the US and USSR could agree to a 25-50% reduction in nuclear weapons and a 25-30% reduction in conventional forces. Beyond that, he hoped that the US and USSR could enter into trade agreements that would satisfy both their needs and give Danilov the political capital he would need to further advance reforms.

Danilov promised to back a US-sponsored resolution authorizing the Coalition to use force to liberate Kuwait. He told Bush that the Soviet ambassador would approve verbiage that enabled Coalition aircraft to use Iraqi airspace and Coalition ground forces to use Iraqi territory to the degree that said usage supported the goal of Kuwaiti liberation. However, Danilov stipulated that Iraq otherwise was to remain intact. Hussein was to remain in power in Iraq. Destruction of Iraqi equipment and personnel pursuant to the liberation of Kuwait was acceptable to the Soviet Union. Destruction of Iraqi equipment and personnel pursuant to the destruction of the Hussein regime was not.

Bush understood what Danilov was saying readily enough. The USSR would keep its clients essentially intact, though the clients were not free to do as they pleased. Back in Washington, the Bush Administration argued the virtues of being bound by such an agreement with the Soviets. If the US complied with the Soviet demand for a continuing Hussein-led Iraq that kept all its territory, there would be a de facto policy of detente. Had not the Reagan Administration built up US military might for a more aggressive policy? How would American clients feel about a policy that guaranteed that Soviet clients on their border would be assured their political survival (and likely rebuilding) by the proposed Iraq deal?

Voices of realism pointed out that agreeing to Danilov’s condition was nothing more than the policy of containment the US had been applying for decades. Not since the Korean War had the US attempted to liberate or conquer a Soviet client by force of arms. There did not appear to be any good opportunities for that on the horizon, either—even if future US leadership felt inclined to go that route. Danilov was giving the US his permission to do what was necessary to liberate Kuwait without any threat of Soviet involvement. This represented an opportunity to put the US armed forces through their paces without risking an all-out war with the Soviet Union. The deal was too good to pass up.