PROSPECTS FOR IRAQ
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July 19, 1983
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Director - Secret
Central
Intelligence
Special National Intelligence Estimate
Secret
SNIE 36.2-83
19 July 1983
352
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SNIE 36.2-83
PROSPECTS FOR IRAQ
Information available as of 13 July 1983 was
used in the preparation of this Estimate.
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THIS ESTIMATE IS ISSUED BY THE DIRECTOR OF CENTRAL
INTELLIGENCE.
THE NATIONAL FOREIGN INTELLIGENCE BOARD CONCURS.
The following intelligence organizations participated in the preparation of the
Estimate:
The Central Intelligence Agency, the Defense Intelligence Agency, the National Security
Agency, and the intelligence organizations of the Departments of State and the
Treasury.
Also Participating:
The Assistant Chief of Staff for Intelligence, Department of the Army
The Director of Naval Intelligence, Department of the Navy
The Assistant Chief of Staff, Intelligence, Department of the Air Force
The Director of Intelligence, Headquarters, Marine Corps
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CONTENTS
Page
KEY JUDGMENTS .................................................................................................... 1
DISCUSSION .............................................................................................................. 7
Military Situation .................................................................................................... 7
Iran's Strategy ......................................................................................................... 7
Iraq's Likely Response ............................................................................................ 9
Economic Impact of the War ................................................................................ 10
Economy Deteriorated in 1982 ......................................................................... 10
More Revenue Shortfalls in 1983 ....................................................................... 10
Diminished Financial Assistance ....................................................................... 11
Retrenchment Ahead .......................................................................................... 13
Seeking Financial Reprieve ................................................................................ 14
Political Impact of the War ................................................................................... 14
Weakness of the Regime .................................................................................... 14
Strengths of the Regime ..................................................................................... 15
Possible Succession Scenarios ............................................................................. 15
Opposition Groups .............................................................................................. 19
Regional Implications ............................................................................................. 20
Iraq's Foreign Policy .......................................................................................... 20
The View From the Gulf ................................................................................... 20
The Radical States .............................................................................................. 21
Relations With the Superpowers ........................................................................... 2:2
The Soviets .......................................................................................................... 22
The United States ............................................................................................... 23
Prospects for US Influence ................................................................................. 23
Annex: Equipping Iraq's Military ............................................................................. 23
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KEY JUDGMENTS
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The war with Iran is the almost single preoccupation of the
Saddam Husayn regime and is the principal determinant of Iraqi
foreign and domestic policy. Saddam is locked in a war of attrition, the
duration of which depends on a regime in Tehran that espouses
Saddam's overthrow as a religious duty. We do not expect the war to
end soon. The Iranians-more importantly, Khomeini-have given
little indication that they are willing to negotiate a settlement to the
conflict.
We believe Saddam will remain in power for the two-year period
of this Estimate, but in our judgment his regime has become more
brittle. It is more narrowly based on family and tribal ties and more de-
pendent on fear as an instrument of control than it was when the war
began.
Iraq retains few concrete war aims beyond extricating itself with
the least possible cost. Baghdad abandoned its goal of destabilizing the
Khomeini regime early in the war. It adopted a defensive military
strategy, thereby forfeiting the ability to control the scope, direction,
and duration of the conflict.
Chances of a decisive Iranian military victory during the period of
this Estimate are remote. Iran's last two offensives failed, at a cost of
some 25,000 casualties. Iranian efforts have suffered from poor plan-
ning and coordination, inaccurate intelligence, and inadequate air
support. Iraqi performance has improved because of more effective use
of intelligence, air power, and defensive doctrine.
There remains a potential that the war will escalate in a major way
to involve other Gulf states or even non-Gulf powers. We doubt.,
however, that such an escalation will occur during the Estimate period.
Iraq's major military option to force dramatic change is sustained air at-
tacks on Iranian oil facilities and tankers in the Persian Gulf. Such an es-
calation, however, would not persuade Iran to negotiate-Iraq's current
objective. Such air attacks are more likely if Iraq believes its policy of
restraint is clearly leading to defeat and direct involvement of the major
powers is needed to force an end to the war.
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Escalation by Iran would probably take the form of resumption of
a strategy of all-out invasion of Iraq, or attacks on Iraq's Gulf
supporters. Both options become more, not less, difficult with time.
Iran's military capability will continue to decline in the absence of
resupply of major weapon systems.
Iraq's economic condition will worsen as long as the war continues
because it cannot export large amounts of oil. Oil exports are at one-
fifth the prewar level of 3.2 million barrels per day. Iraq will be unable
to increase oil exports substantially as long as its Gulf outlets and its
pipeline through Syria remain closed. Foreign exchange assets are down
to less than $8 billion, from a prewar level of about $35 billion. Direct
assistance from the Gulf states will be sufficient to allow Iraq to
continue the war, but will fall short of Iraq's overall requirements.
Iraq will have to reduce imports sharply this year. The cuts will
continue to impact most heavily on Iraq's plans for economic develop-
ment, but this year the consumer will also increasingly feel the effects.
Iraq also will have to defer payments worth several billion dollars
to its trading partners. Baghdad is negotiating with foreign contractors
from several Western countries for delayed payments on a wide variety
of civilian projects. Iraq also will press harder for financial concessions
from its major arms suppliers. Most exporters probably will go along
with Iraq's requests, because they can do little to force payment and
they can expect their current help to enhance their postwar economic
opportunities in Iraq.
As long as the war continues, Iraq's policies will be characterized
by a nonconfrontational stance on larger Middle East issues, a concern
not to alienate either superpower, and even heavier reliance on the
forces of repression to cope with the uncertain domestic security
situation. Saddam Husayn already has been forced by the war to
moderate further Iraq's longstanding radical policies toward its conserv-
ative Arab neighbors, and its strident opposition to Israel and the West.
Iraq also has stopped virtually all economic aid to leftist regimes
and opposition movements. Iraq instead has sought to strengthen ties
with its Persian Gulf neighbors, whose financial and political support is
critical against an Iran-Syria alliance. Syria is likely to remain deeply
hostile to Iraq. It will continue to see cooperation with Iran as the best
way to try to overthrow Saddam, and is likely to keep the Iraqi pipeline
through Syria closed.
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An Iraq that is again exporting oil will try to reassert its influence
in the region. This probably would result in a toughening of its stance on
many foreign policy issues important to the West, including the
Palestinian question. Baghdad would probably demand a greater role in
Arab Gulf security arrangements and, in time, within the Gulf Coopera-
tion Council, from which it is now excluded. Iraqi leaders might revert
to their prewar policy of opposing superpower involvement in the
region, especially if they see a sharp increase in Iran's contacts with irn-
portant outside powers. However the war ends, Iraq's behavior will
continue to be influenced during the next two years by a continuing,
sometimes violent, rivalry with Iran and Syria, and by a need to
maintain access to logistic and financial support from its conservative
Arab neighbors.
Although Iraqi-Soviet relations have run an uneven course in
recent years, they have improved since the spring of 1982. Relations
will remain proper, if not warm, as long as the war continues. Iraq can-
not jeopardize the arms supply relationship with the USSR-its primary
source of modern armor and aircraft-without risking a serious decline
in its military capability during the 1980s. The Soviets have used this
leverage, but with little success, in an attempt to reverse a prewar move
by Iraq to more evenly balance its East-West diplomacy.
The protracted war and economic crisis in Iraq have prolonged
Baghdad's dependence on Soviet arms, but the drift away is likely to re-
sume when the war ends. Moscow views Iran as the major geopolitical
prize in the region, and may be willing-if the opportunity arises-to
sacrifice close ties with Iraq in order to expand its influence in Tehran.
The Soviets might welcome Saddam's removal as an opportunity to
.expand their influence in Baghdad. They would, however, not welcome
a fundamentalist regime, which would lead to even less Soviet influence
in the Persian Gulf.
There is no evidence that Moscow has sufficient support within
Iraq to engineer a coup. Nevertheless, there is a faction within the Iraqi
leadership-although probably a minority-that reportedly favors
maintaining close ties with Moscow. Some elements of the military
probably would support close ties, at least until reliable alternate
military supply relationships have been established. The Soviets have a
large mission in Iraq, including at least 1,000 military and 5,000
economic and technical advisers.
The postwar opportunity to expand US-Iraqi ties is likely to
broaden if the current regime remains in power in Baghdad. Iraq's
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relations with the United States have improved over the last few years,
and commercial ties have grown considerably. Baghdad has expressed
growing interest in renewing high-level official contacts with the United
States, and after the war probably will expand relations with Washing-
ton. They will be reluctant to expand ties while the war continues to
avoid appearing as a supplicant in need of US support.
Serious impediments to closer US ties with Iraq remain. Iraq is
suspicious of US intentions in the Persian Gulf. It remains convinced
that the United States is prolonging the war by allowing Israel to supply
arms to Iran. US policy toward the Arab-Israeli issue and the Palestinian
question is a major obstacle. Iraq, moreover, appears intent on main-
taining some links to the Palestinian terrorist groups Black June and 15
May.
The current regime is likely to pursue policies more favorable to
the United States than any successor regime. A successor regime would
be anxious to establish its legitimacy with other Arabs and would be
heavily influenced by the current popular Arab attitudes toward the
United States. The United States, in fact, might serve as a scapegoat for
new leaders of the Ba'thist or Islamic fundamentalist variety. A major
upheaval, particularly one in which Iran had a large influence, would
result in a regime that would oppose any US presence in the area and
would pressure countries in the region to reduce ties to the United
States.
Among the scenarios for removal of Saddam Husayn, other than an
isolated assassination, a "palace coup" is most likely if the military or se-
curity situation deteriorates sharply. Saddam probably would be re-
placed initially by a collegial party leadership, which would make few
policy shifts. This leadership would soon come under great strain as
different players jockeyed for power, increasing the risk of further
political upheavals.
A broader coup involving the military is less likely during the
period of this Estimate. Pervasive security inhibits extended plotting
and the security services would have to be co-opted. Saddam has
reduced the political role of military officers, and the army, in any case,
is preoccupied at the front. Given the secretiveness of the Iraqi system,
however, we are unlikely to have advance knowledge of serious
plotting.
A general popular uprising is the least likely prospect. Despite an
upsurge in terrorist activity in Baghdad, opposition elements appear too
weak and disorganized to pose a coordinated threat to Saddam. They
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remain unable to cooperate even on the most elemental levels or to
agree on the shape of a successor regime. The groups are manipulated
by foreign backers who have conflicting goals in Iraq.
Saddam Husayn's removal could usher in an extended period of
instability in Baghdad. His successors probably could not maintain
Saddam's system of tight control and any post-Saddam regime is almost
certain to fall into factional fighting. Only after a succession of weak
governments in Baghdad would the chances increase for an Iranian-
supported fundamentalist regime coming to power. Even in that case,
Tehran could not be confident that such a government would remain
responsive to Iran's policy directives over the long run.
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DISCUSSION
1. Iraq is trapped in a stalemated war that saps its
financial reserves, restricts economic growth, wastes
manpower resources, and limits its political options.
Baghdad's search for an end to the war remains
frustrated by Tehran's declared determination to con-
tinue until President Saddam Husayn falls from power
or agrees to humiliating terms for peace.
2. Baghdad has few military options. Iraq forfeited
early in the war the ability to control the scope and
duration of the conflict. It cannot regain the initiative
without escalating the fighting and, in the process,
decreasing the already slim chances of a political
settlement. Consequently, it most likely will continue
to wage a defensive war punctuated by occasional air
raids or missile attacks against Iranian oil facilities and
population centers but also with the possibility of
escalating attacks on Iranian shipping.
Military Situation
3. Despite its strategic predicament, the tactical
military situation has improved substantially for Iraq
over the past year. Since Iranian troops recaptured
Khorramshahr in May 1982, Baghdad's forces have
repulsed or contained five Iranian offensives. Purges
of incompetent senior Iraqi commanders following the
Khorramshahr defeat, improved tactical planning, and
a greater willingness of Iraqi troops to fight in defense
of their own territory have accounted for the im-
proved performance.
4. With new commanders and a more tangible goal,
the Iraqi Army's advantages over the Iranians in
armor and artillery have begun to play a more
important role. (See table 1.) Iraq has more mobile
forces, a better organized logistic system, and elabo-
rate defensive fortifications along the border. The
Iraqis also have benefited from improved intelligence,
especially signal intercept capability. Iraqi command-
ers almost always have foreknowledge of Iranian
moves.
5. The Air Force has sufficient aircraft and weap-
ons to ensure air superiority over the decimated
Table 1
Iraq: Status of Forces
(Estimates as of 1 April 1983)
Ground Forces
Personnel a
350,000
Divisions b
14
Armored
5
Infantry
7
Mechanized infantry
2
Main battle tanks
3,075
Armored personnel carriers
1,852
Artillery (over 100 mm)
1,380
Air and Air Defense Forces
Personnel
30,000
Fighter aircraft
400
Attack helicopters
100
SAM batteries
75-90
Naval Combatants
Missile patrol boats
a Excludes several hundred thousand paramilitary forces.
b The Iraqis are creating an additional 10 divisions. Most of these
already have a skeletal structure and several are probably already
operational.
c Some 75 percent are operationally ready.
Iranian Air Force. In recent battles, the Air Force-
including attack helicopters-has played a more im-
portant role.
Iran's Strategy
6. Saddam's overthrow remains Iran's primary de-
clared aim. Iran also will work for his replacement by
an Islamic regime. Secondary objectives include forc-
ing a complete Iraqi withdrawal from occupied Irani-
an territory, obtaining sizable reparations, having Iraq
condemned as the aggressor, and repatriating Iraqi
exiles.
7. To achieve its goals and maintain military pres-
sure on Iraq, Iran has launched major ground offen-
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Figure 1
Iraq-Iran: Distribution of Forces and Major Occupied Areas
Ahvaz
ramshahr
AMSd$n
q
Regular Army Units
Iraqi Iranian
I Infantry division
Mechanized division
Armored division
if Infantry brigade
Armored brigade
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sives every few months. Continued failures and
mounting casualties, however, have caused Tehran to
revise this strategy in favor of a less costly war of
attrition. A war of attrition allows Iran to maintain
military and economic pressure on Iraq while reduc-
ing the risk of a popular backlash at home over
casualties. The Iranians probably are convinced that,
in a war of attrition, their advantage in manpower and
their ability to maintain a high volume of oil exports
relative to Iraq would guarantee eventual victory. (See
table 2.) On the negative side, Iran, unlike Iraq, still
has less dependable suppliers of modern weapon sys-
tems in quantity, and the Iraqi advantage in this area
should increase over time.
8. A strategy of attrition probably will be accompa-
nied by increased assistance to Shia and Kurdish
opponents of the Baghdad regime in an attempt to
undermine Iraq's internal stability. A small band of
Shia dissidents with links to Tehran was responsible for
a series of terrorist bombings in Baghdad this spring,
including an attack on the headquarters of Air Force
Intelligence. Additional bombings and possibly assassi-
nation attempts against senior Iraqi officials are likely.
As Iran attempts to weaken foreign support for the
Iraqi regime, French, and even Soviet and US, installa-
tions and personnel could become targets of terrorist
attacks.
9. Iran can maintain economic pressure on Iraq by
keeping the Gulf closed to Iraqi shipping. This forces
Iraq to rely on long and costly transportation routes
through third countries and reduces its oil exports to a
trickle. Tehran will provide Syria nearly $1.4 billion
worth of oil on concessionary terms during 1983 to
ensure that the Iraqi oil pipeline across Syria remains
closed. Iran has not closed by sabotage Iraq's sole
Killed in action
110,000-115,000
50,000-60,000
Prisoners of war
7,500
50,000
Tanks
800
1,100
Armored personnel carriers
400-600
1,100
Artillery
400
500
Aircraft
180-190
160-180
remaining oil export route-a pipeline across Tur-
key-probably to avoid exacerbating tensions with
Turkey.
10. Iran will complement its military strategy with
a diplomatic campaign to drive a wedge between
Baghdad and its Gulf supporters. Iran will play on the
fears of weak Gulf governments uncomfortable with a
posture of confrontation with Iran. Tehran already is
trying to improve relations with Saudi Arabia, the
United Arab Emirates, and Kuwait, and these efforts
are likely to continue. Tehran also is trying to use the
pollution caused by the damaged wells in the northern
Gulf to turn both popular and governmental opinion
in the Gulf countries against Iraq, so far with only
modest success.
Iraq's Likely Response
11. Baghdad's goal is to convince Tehran that it
cannot win the war militarily and that continuation of
the war, even at reduced levels, is not in Iran's interest.
Iraq also wants to convince the major powers that the
war must be stopped and that outside parties must
work for a cease-fire. (See figure 1.)
12. To achieve these ends, Baghdad must prevent
Iran from achieving tangible military success while
inflicting the heaviest possible losses on Iranian forces.'
As was the case during Iran's last offensive in April,
Iraq will fight hard to recover even insignificant
territory captured by the Iranians to prevent Tehran
from claiming a victory. Iraqi ground forces, however,
are not likely to launch large-scale offensives of their
own because this would increase Iraqi casualties, give
Iran the opportunity to conduct a successful defense,
and once again give Iranians a tangible goal-defense
of Iranian territory-around which to rally its troops.
13. Iraq is responding to Iranian offensives and
terrorist attacks inside Iraq by striking Iranian oil
installations, cities, and civilian targets with surface-to-
surface missiles and with air attacks to underscore for
' Baghdad for many months has boasted that it possesses a secret
weapon that can inflict massive casualties and ensure victory. Iraq is
trying to develop a chemical warfare capability, but the program is
still in the experimental stage. Iraq reportedly has at least 1,000
artillery shells filled with mustard agent but has not used them so far
in the fighting. The Iraqis have used tear gas in the fighting, but no
lethal or incapacitating agents, against the Iranians. While the use of
mustard would inflict heavy casualties on Iran's largely infantry
forces, it would not force Iran to end the war.
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Iran that continuing the war is counterproductive.
Although such attacks strengthen the resolve of hard-
liners in Tehran, Baghdad is likely to continue them
until Tehran shows concrete interest in negotiations.
14. Iraq will endeavor to keep the dangers of the
war, particularly to oil, fresh in the minds of the Gulf
states and outside powers by attacking lightly de-
fended, less important oil targets in the northern Gulf.
Such attacks are one of the few military ways Iraq can
hurt Iran and counter the impression that only Iran
can initiate military action. In addition to hitting
Iranian offshore oil installations in the northern Gulf,
Iraq has warned that the large petrochemical complex
at Bandar-e Khomeyni will be attacked if Japanese
firms resume work on the project.
15. Iraq is attempting to increase its capability to
attack Iranian shipping throughout the Gulf. France
has agreed to loan Iraq five Super Etenclard aircraft
armed with Exocet antiship missiles, to be delivered
by early fall. In addition, Iraq reportedly is having
some of the French Mirage F-1 fighter aircraft it has
on order modified to carry the Exocet. Iraq has used
Super Frelon helicopters armed with the Exocet
against shipping in the northern Gulf. Delivery of the
Super Etendard aircraft, in particular, would make
feasible Iraqi attacks against shipping nearly as far
south as Bandar-e Abbas.
16. The Iraqi Air Force already has the capability
to seriously disrupt Iranian oil exports. To be success-
ful, however, Baghdad would have to carry out sus-
tained attacks and-if Khark Island were the target-
risk significant losses. Should they decide to expand
their operations against Iranian facilities in the Gulf,
the Iraqis could choose from several possible targets.
They could attempt to disrupt activity at Bandar-e
Khomeyni, the only Iranian port with a railhead, or
destroy pumping stations serving Khark. In addition,
Iraqi fighters could be launched against Khark itself-
the best defended target-or vulnerable oil tankers en
route to or from Khark.
17. Sustained air attacks are more likely if Iraq
believes its policy of restraint is clearly leading to
defeat and direct involvement of the major powers is
needed to force an end to the war. Attacks against
Khark and oil tankers probably would prompt Iran to
resume a strategy of all-out invasion of Iraq, or attacks
on Iraq's Gulf supporters. Iraq's Arab allies almost
certainly will do as much as possible to bolster Iraq
and discourage such desperate moves.
18. Iraq will be able to sustain the current low level
of fighting for the two-year period of this Estimate.
Baghdad will retain a substantial advantage in military
equipment for the remainder of the war unless Tehran
can open a supply line for large amounts of modern
weapons comparable to those already in Iraq. Pros-
pects for such a development are dim; it would
require Tehran to improve relations dramatically with
Washington, Moscow, or Paris. Iraq will have to guard
against a deterioration in troop morale resulting from
war weariness as well as avoid tactical errors leading to
an Iranian battlefield breakthrough.
19. Finally, the Army's preoccupation with the
Iranian threat might be altered by a deterioration of
security in Iraq's major cities or in the unlikely event
of a major resurgence of Kurdish dissident strength in
the north. These events would be likely to force
Baghdad to withdraw some troops from the front-a
move which undoubtedly would weaken military
resolve.
Economic Impact of the War
Economy Deteriorated in 1982
20. The critical weapon in Iran's arsenal has been
its ability to severely damage Iraq's economy by
closing its oil export terminals in the Gulf. With oil
exports at one-fifth the prewar level of 3.2 million b/d
and the flow of Gulf state aid at a near trickle by the
end of 1982, Baghdad was forced virtually to abandon
its economic development program. It also had to
draw down its foreign exchange reserves by about $13
billion. (See figure 2.)
21. Still, the total import bill for 1982 was about
$20 billion, nearly the same as the year before.
Sustained import demand reflected Baghdad's com-
mitment to support the war effort, complete high-
priority projects, and ensure a steady supply of con-
sumer goods. Iraq was spending an estimated $1
billion per month in direct costs for the war during
1982. This sum included expenditures for military
equipment, fuel, and all war-related construction.
22. Iraq will earn even less foreign exchange this
year than it earned in 1982. Iraq cut its oil price in
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Figure 2
Iraq: Oil Exports and Revenues
Net Exports Revenue
Thousand b/d Billion US $
5,000 10
March 1983 by $5 per barrel-to about $29-to
realign it with the new OPEC benchmark. As a result,
oil export revenue, which accounts for virtually all of
Iraq's earnings, will reach only about $7.0 billion,
compared with $9.4 billion in 1982. Every $1-per-
barrel cut Iraq is forced to make forces the regime to
cut expenditures by an additional $260 million, or to
find that much additional financial assistance from
abroad.
23. Iraq cannot substantially increase its own oil
exports, although other Arab producers can supply oil
to Iraq's customers. As long as Iran provides Syria with
oil, Damascus has little incentive to reopen the Iraqi
oil pipeline (capacity 1.2 million b/d) this year. Syria is
likely to continue resisting pressure from both the
Soviets and the moderate Arabs to reopen it. The
planned expansion of the Turkish pipeline (capacity
700,000 b/d)-now Iraq's only export route-will not
be completed until 1984. Although Baghdad and
Riyadh have agreed in principle to a pipeline across
Saudi Arabia to the Red Sea, the line is unlikely to be
completed before 1985, if at all. (See figure 3.)
24. Iraq will not be able to fall back on its foreign
exchange reserves in 1983 as it did in 1982. (See figure
4.) Reserves have plunged to less than $8 billion from
about $35 billion before the war. Reflecting the
squeeze for ready cash, Iraq has been liquidating
interest-earning assets prior to their maturity.
25. We believe the Gulf states-Saudi Arabia, Ku-
wait, Qatar, and the UAE-will provide sufficient,
direct aid to Iraq in 1983 to prevent the collapse of
Iraq's resistance to Iran due to financial strains. The
Gulf countries face financial difficulties of their own
because of the soft oil market. Saudi Arabia, the largest
benefactor, for example, will itself have to dip into
reserves this year no matter what aid it eventually
gives Iraq.
26. Direct Gulf aid, however, will probably be less
than in 1982. So far this year Saudi Arabia, Kuwait,
and the UAE have provided Iraq with about $1 billion
and additional Iraqi belt tightening will be necessary.
27. Saudi Arabia and other Gulf allies will continue
to underwrite Iraqi arms purchases. The $250 million
the Saudis have given in 1983 apparently is earmarked
for French and Egyptian arms purchases. Riyadh
earlier had paid for Iraqi purchases of Egyptian
military hardware worth about $220 million, accord-
ing to reliable sources. Kuwait, the UAE, and Oman,
to a lesser extent, also have funded Egyptian and West
European arms sales.
28. To augment their monetary aid to Baghdad, the
Gulf states-principally Saudi Arabia--also will con-
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Figure 3
Iraq: Major Oilfields and Pipelines
raq-Turkey Pipeline
(p7 mtllmn barrels/daY c
c
Mediterranean BEIRUT
Sea
Egypt
o zoo
Kilometers
Boundary representation is
not necessarily authoritative
C=> Oilfield
Oil pipeline
m Pump station
Oil terminal
Note: Pipeline alignments
are approximate
12
SECRET
W - r/_ Baniyas S y rf i
4s
IS
dP
Tripoli,
/7.