REGIONAL CONSEQUENCES OF REGIME CHANGE IN IRAQ

• Document Type: FOIA
• Keywords: IRAQ
• Keywords: IRAQ
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 0005299385
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 40
• Document Creation Date: June 22, 2015
• Document Release Date: September 29, 2009
• Case Number: F-2008-00678
• Publication Date: January 1, 2003

NIC
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Regional Consequences
of Regime Change in Iraq
(b)(1)
(b)(3)
(b)(6)
ICA 2003-03
January 2003
APPROVED FOR
RELEASE^DATE:
23-Sep-2009
 era
National
Intelligence
Council
Regional Consequences
o egime Change in Iraq
Prepared under the auspices of Paul R. Pillar,
National Intelligence Officer for the Near East and South Asia.
Inquiries may be directed to the NIO on secure
January 2003
 SE
Scope Note
At the request of the Director of Policy Planning at the Department of State, this
Intelligence Community Assessment (ICA) analyzes the most important political, economic, and
social consequences of regime change in Iraq-in the context of current conditions in the Middle
East and South Asia-for the surrounding region over a five-year period. The region considered
includes Israel, the Palestinian territories, Jordan, Egypt, Libya, Turkey, Syria, Iran, Afghanistan,
Pakistan, India, and the Arabian Peninsula countries. Sub-state actors are included where
relevant to specific issues. The ICA also puts expected developments in the context of broader,
strategic implications for the United States.
The analysis is based on a main scenario incorporating the assumptions below. Insofar
as divergence from this scenario would create significant alternate consequences, those effects
are noted throughout the assessment. Some judgments reflect the immediate impact of a war
itself-particularly for regional stability and terrorism-but most deal with longer, post-war
effects.
? Saddam Husayn and key regime supporters are ousted as the result of a UN-sanctioned
Coalition military campaign led by the United States in which Iraq's weapons of mass
destruction (WMD) are eliminated. Israeli military forces do not become overtly involved in
the conflict.
? Iraqi territorial integrity remains intact and Iraq retains a defensive capability against its
neighbors, at first through the US presence and then through the recreation of a credible
conventional military force.
? A US-backed government is established with a gradual devolution to Iraqi self-governance
during the five-year timeframe. Beginning with a US-led military occupation for at least the
first year, the United States maintains a long-term but declining military presence in Iraq to
ensure stability, assist humanitarian efforts, and aid the development of functioning political
institutions.
? UN sanctions are lifted but with some residual Oil-For-Food mechanisms intact to facilitate
aid distribution.
The ICA was reviewed in draft by three prominent experts on the history, politics, and
regional dynamics of the Middle East-
Their comments were taken into
consideration in the preparation of-this -paper.
Possible developments within Iraq following a removal of Saddam are addressed in
ICA 2003-04, Principal Challenges in Post-Saddam Iraq T;5
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 Contents
(U) Scope Note
(U) Key Judgments
5
(U) Discussion
9
(U) Setting the Stage
(U) Popular Reactions
9
(U) Terrorism and Islamic Extremism
(U) Fueling Political Islam
(U) How Terrorists Might React
(U) Palestinian Groups-A Special Case
(U) State Sponsors of Terrorism
12
13
13
14
15
(U) Roles in a Post Saddam Iraq
16
(U) Broader Security Policies and Posture Toward the United States
19
(U) Weapons of Mass Destruction
25
(U) Impact on the Arab-Israeli Conflict
26
(U) Economic Consequences
27
(U) Prospects for Democratic Reform
29
 THIS PAGE WAS INTENTIONALLY LEFT BLANK
 Key Judgments
Regional Consequences of Regime
Change in Iraq
The repercussions within the Middle East and South Asia of ousting Saddam
Iay through military force would depend not only on the length and course of the war
and post-war developments within Iraq but also on pre-existing conditions in the region.
These conditions include generally closed political systems, unfavorable economic and
demographic trends, significant support for radical Islamist groups and ideologies, and
widespread opposition to US policies-particularly regarding the Arab-Israeli conflict-and
suspicion of US motives in the region.
A US-led war against Iraq would precipitate immediate popular anti-US
demonstrations in many countries in the region, but local security forces probably would
be able to contain such disturbances.
? A drawn-out war with numerous civilian casualties probably would produce more severe
unrest than a quick and less bloody conflict.
? The long-term presence of US troops in Iraq would be a target of future potentially violent
demonstrations, fueled by perceptions that the United States was seeking to dominate the
region and its resources and was hostile to Arab and Muslim interests.
? Although Saddam is unpopular with many Arabs, most do not wish to see a US military
campaign against Iraq. Clear evidence that the Iraqi people welcomed the United States as a
liberator, however, would help to dissipate public anger in the region, as would reduced
Israeli-Palestinian violence and greater US engagement toward a resolution of the Arab-
Israeli conflict.
A US-led war against and occupation of Iraq would boost political Islam and
increase popular sympathy for some terrorist objectives, at least in the short term.
? A heightened terrorist threat resulting from a war with Iraq, after an initial spike, probably
would decline slowly over the subsequent three to five years. Regime change in Iraq would
be unlikely to affect Palestinian terrorism significantly.
? For many Arabs and Muslims, however, an Iraqi defeat would be a jarring event that would
highlight the inability of existing regimes to stand up to US power.
5
 ? Increased popular Islamist sentiment would bolster both extremist groups and, in some
countries, Islamic political parties that seek to gain power peacefully.
? Al-Qa'ida and other terrorist groups would try to exploit the war and the anti-American
sentiments expressed during and after the conflict by accelerating their anti-US operations,
and al-Qa'ida would try to take advantage of US attention on post-war Iraq to reestablish its
presence in Afghanistan.
? The direct effect of regime change in Iraq on al-Qa'ida's operational opportunities inside Iraq
would depend on the degree to which a new Iraqi government established control over its
territory.
Neighboring states would jockey for influence in the new Iraq, with activities
ranging from humanitarian and reconstruction assistance to fomenting strife among Iraq's
ethnic and sectarian groups.
Governments in the region would adjust their foreign and security policies to
accommodate US military preeminence without appearing to subordinate their policies to
Washington.
? The defeat of Iraq probably would encourage some governments
to continue close security relations with the United States and would
enhance already-strong US ties with other states,
? Over the long run, an outcome that installed a credible Iraqi regime and visibly improved
Iraqi living conditions would increase the willingness of regional governments to cooperate
with the United States.
? Much would depend, however, on how domestic populations in the region viewed the US
role in Iraq. Some governments, for
political reasons would de-emphasize public forms cooperation with the United States
even if they were willing to cooperate privately.
? Middle Eastern states would have increased interest in forging new political and security
relationships as counterweights to strong US influence. The European Union, Russia, and
 China would be potential partners. Within the region, Arab states and Iran would have added
reason to expand relations with each other,
Regional states would maintain their current interests in weapons of mass
destruction (WMD) and programs for developing such weapons, despite worries about
possible future US military action.
? Some states would continue to view
WMD programs as necessary components of an overall security strategy for numerous
reasons, including surviving in a dangerous neighborhood, enhancing regional prestige and
influence, compensating for conventional militar deficiencies, and deterring perceived
threats from such stronger adversaries as Israel
? States with developmental WMD programs would try to increase the secrecy and pace of
those programs with the hope of developing deterrent capabilities before they could be pre-
empted.
Many in the Middle East would expect the United States to build on its victory
over Iraq by taking a more active role in resolving the Israeli-Palestinian impasse. The
willingness of regimes to cooperate with Washington on many issues would depend
significantly on whether those expectations were met.
? Resolution of the Israeli-Palestinian conflict would continue to depend on the willingness of
both sides to make basic compromises and on outside help in initiating and sustaining a
viable peace process.
The impact on regional economies would be mostly negative but variable, with
much of the effect depending on how much damage the Iraqi oilfields sustained during the
war.
? Oil prices probably would spike to at least $40 per barrel during-and in the run-up to and
immediate aftermath of-a war because of uncertainty regarding the disposition of Iraq's oil
resources. Prices could go substantially higher if a war overlaps with the strikes in
Venezuela's oil sector, which have disrupted about 2.7 million b/d of exports. A quick return
of Iraq's output to something near its current capacity of 3.1 million b/d, however, would put
downward pressure on prices and could set off a battle for market share among Saudi Arabia
and other OPEC members, possibly leading to a collapse both of prices and of OPEC's
cohesion.
 ? Syria, Jordan, and Turkey would lose critical spending power, jobs, and trade in non-oil
goods made possible by their current heavily discounted oil imports from Iraq)
? Flows of tens, if not hundreds, of thousands of refugees and losses in trade, worker
remittances, and tourism would slow economic
activity throughout the region.
Whatever value Iraq would have as a democratic exemplar would rest on the
stability and success of a new Iraqi government and on the degree to which democracy in
Iraq were seen as developing from within rather than imposed by an outside power.
? The strength of the Iraq example would depend heavily on US success in ensuring that a new
Iraqi government was not seen in the region as primarily a US creation.
? On balance, however, political and economic reform in other regional states would continue
to face significant obstacles and would continue to be influenced as much by conditions,
events, and debates within each country as by the example set by a more liberal and
democratic Iraq.
8
 Discussion
Regional
Consequences of Regime
Change in Iraq
(U) Setting the Stage
(U) The ouster of Iraqi dictator Saddam
Husayn through military force would be one
of the most significant events in the Middle
East in recent years. The war itself, sudden
political change in a major Arab state-with
the departure of a leader who started two
earlier wars-and an expanded direct role in
the region for the United States all would
have repercussions beyond Iraq.
Governments, publics, and groups across the
region would react to these changes.
(U) These reactions, however, would take
place within a complex set of pre-existing
political, economic, and social realities, most
of which would not be affected by a change of
regime in Baghdad. This regional context
would be at least as important as the removal
of Saddam in shaping behavior important to
US interests. In some respects a war against
Saddam would reinforce existing perceptions
and patterns of behavior. In other respects the
contextual factors would tend to temper or
negate what otherwise might have been a
result of Saddam's ouster.
(U) The most important aspects of the
Middle Eastern context are:
? Unresolved conflicts and disputes
involving Middle Eastern states. The
Israeli-Palestinian conflict is the most
salient, with the greatest regional impact.
? Unpromising demographic and economic
trends, including significant youth bulges
and high unemployment in many
countries, that offer most Middle
Easterners little promise of a more
prosperous life.
? Generally undemocratic and ineffective
political systems ruled by entrenched
elites.
? Substantial political extremism, chiefly in
the form of radical Islamist groups and
ideologies.
? Widespread popular distrust of the United
States and disappointment with US
policies in the region, primarily related to
the Arab-Israeli conflict.
(U) Popular Reactions
A US-led war against Iraq would
precipitate immediate popular anti-US
demonstrations in many countries in the
region driven by perceptions that the United
States was waging a broader war against
Muslims and that Washington was driven
primarily by motives other than reducing the
security threat from Saddam Husayn. Local
security forces probably would be capable of
containing popular uprisings and have taken
measures to increase their readiness. Some
governments, however, would be more
vulnerable, especially if the focus of the
protests shifted from the United States to the
local regime or if the United States acted
unilaterally without the political cover of a
UN resolution authorizing the use of force.
9
S
 ? Recent polling data from many countries
in the region reveal strong opposition to a
US war in Iraq, increased anti-American
sentiment, and a widespread belief that the
United States is anti-Muslim.
? Most governments would allow some
open opposition to the war as a safety
valve to deflect pressure but would act to
prevent attacks against US assets or
interests. Many regimes also would adjust
their public postures to appear attuned to
the opinion of the "street" and avoid being
labeled US "puppets."
? Unrest would be more severe in response
to a longer war with numerous civilian
casualties but milder in response to a
quicker and less bloody conflict.
Media coverage of large
numbers of Iraqi civilian casualties attributed
to US operations, public revelations about
operational or logistical support for US forces
in Iraq, an upsurge in Israeli-Palestinian
violence, or the perceived failure of the local
government to resist alleged US "hegemonic"
intentions would increase the likelihood of
violent protests
10
S +T
 sErrdpirv)
Anti-Saddam sentiment high in many
states-would not necessarily correlate with
favorable popular attitudes toward the United
States.
? Public anger probably would dissipate if
the Iraqi people were seen as welcoming
the US presence.
? Reduced Israeli-Palestinian violence,
greater US engagement toward a
resolution of the Arab-Israeli conflict, and
the establishment of a Palestinian state
also would calm restive publics and lessen
the influence of Baghdad's portrayal of
Saddam as a champion of the Palestinian
cause.
probably would be a subject for future
potentially violent demonstrations fueled by
perceptions that the United States was seeking
to dominate the region and its resources and
was fundamentally hostile to Arab and
Muslim interests.
? Unlike Afghanistan, Iraq is part of the
Arab core, and the use of US military
force against a fellow Arab Muslim
country-absent a clear provocation-
probably would be viewed with
widespread antipathy.
The long-term presence of US troops
in Iraq-particularly if the result of US
unilateral action-and elsewhere in the region
(U) Arab Popular Opinion-1991 and 2003
Arab popular opinion is more anti-American than it was when the United States led a
Coalition military campaign against Iraq in Operation Desert Storm. Consequently, there is
greater potential now than in 1991 for damaging popular responses to a US-led war. Several
factors underlie the more negative attitudes of today.
The United States as Sole Superpower. The position of the United States as the
preeminent global power makes it almost universally suspect and adds a sharper edge to all Arab
grievances. Although at the time of Desert Storm the Soviet Union was fading'fast and only
months away from collapse, the memory of its ambitious global agenda and recently concluded
aggression in Afghanistan was still fresh in Arab minds, diverting some attention from perceived
US failings.
A More Serious Arab-Israeli Conflict. The first Palestinian intifadah, which began in
1987 and was ongoing at the time of Desert Storm, was tame in comparison with the current
Israeli-Palestinian violence. Moreover, in 1991 expectations for realizing Palestinian national
aspirations had not yet been raised and shattered, as they later would be with the Madrid and
Oslo processes.
(continued on next page... )
11
 (continued...) (U) Arab Popular Opinion-1991 and 2003
Independent Arab Broadcast Media. In 1991 there were virtually no regional
a terrnatives to heavily controlled state broadcast media. Media in moderate Arab states tended to.
shy away from aggressive coverage of developments involving the United States, lest
governments with close ties to Washington be subject to domestic blowback. The rapid growth
over the past decade of independent Arab media-especially the Qatar-based al-Jazirah satellite
television station-has contributed significantly to negative views of the United States. The
daily spectacle of Israeli-Palestinian violence has been brought to Arab living rooms, sometimes
with an inflammatory spin.
Greater Sympathy for Iraq. In addition to the distinction that Arabs would draw
between a reversal of Iraqi aggression against another Arab state and a war initiated by the
United States, 12 years of sanctions against Iraq have reinforced perceptions that Washington is
anti-Arab. Although the UN Security Council has imposed these and other sanctions against
Arab states, most Arabs view them as US-driven and aimed at weakening not just the Saddam
regime but Arabs in general. Unlike in 1991, when key Arab states including Saudi Arabia,
Egypt, and Syria openly supported military action to expel Saddam from Kuwait, none of these
states is calling for or willing to directly participate in a US-led attack against Baghdad.
Stronger Islamist Movements. Islamist movements-including both the militant and
relatively moderate varieties-were more inchoate and less influential in the region in 1991 than
they are now. In particular, al-Qa'ida had not yet emerged as a prominent, region-wide
organization stoking hatred of the United States.
The scarcity until recently of polls in most Arab and Muslim countries makes rigorous
tracxung-of trends in opinion difficult. Recent surveys, however, point to marked anti
Americanism in the Middle East. Gallup polls taken in early 2002, Pew polls taken in summer
2002, and a State Department-sponsored poll showed favorable opinion of the United States in
that region to range from a high of 37 percent among Kuwaiti citizens to 25 percent in Jordan, 16
percent in Saudi Arabia, 12 percent in Iran, and six percent in Egypt. Adjectives that Middle
Eastern respondents frequently apply to the United States in polls taken by Gallup are: ruthless,
aggressive, conceited, biased, arrogant, and easily provoked. Perceived US attitudes toward
Muslims and Islam also influence opinion. State Department-sponsored polls taken in
September 2002 in Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, and Jordan showed
majorities of between 64 and 96 percent believing that the United States does not respect Islam.
(U) Terrorism and Islamic
Extremism
Iraq's defeat and occupation at the
hands of the United States would deliver to
the Middle East one of the largest political-
psychological shocks the region has seen
since the Arab defeats by Israel in 1948 and
1967. Just as those events contributed in
following years to the rise of radical regimes
in the region and the growth of such social
and political movements as Nasserism and
Islamic extremism, US actions in Iraq
probably would have similarly wide-ranging
but largely unpredictable consequences.
 (U) Fueling Political Islam
A US-led defeat and occupation of
Arab Iraq probably would boost proponents
of political Islam. Amid feelings of
confusion, despair, and a renewed sense of
victimization, calls by Islamists for the people
of the region to unite and build up defenses
against the West probably would resonate
widely even though Saddam had little popular
support.
? An Iraqi defeat would highlight in the
public mind the incapacity of current Arab
regimes either to challenge the United
States or to enact meaningful reforms.
? Islamists could point to secular Iraq's
downfall as an example of the "mistake"
of straying from Islam.
Fear of US domination and a widespread
belief that the US secret agenda was to
make the region safe for Israel probably
would attract more angry young recruits
to political activism and the extremist
ranks.
? In some countries, an increase in Islamist
sentiment also probably would take the
form of greater support for Islamic
political parties that seek to come to
power through legitimate means.
(U) How Terrorists Might React
An Iraqi defeat probably would
heighten popular sympathy for some terrorist
objectives in the near-term, increasing the
threat against US officials, facilities, and
businesses that were closely associated with
America and its allies-especially Israel.
? US action in Iraq against one of Islam's
most oil-rich countries would tend to
substantiate in some minds one of al-
Qa'ida's most effective messages-that
the United States is out to enrich itself at
the expense of Muslims. Al-Qa'ida
almost certainly would attempt to portray
the war as not just against al-Qa'ida or
Saddam but also against Islam as a whole.
? Funds for terrorist groups probably would
increase as a result of Muslim outrage
over US action. Besides direct
contributions, more money would flow
into Islamic charities that could be
skimmed off for terrorist purposes.
? Some militant Islamists in Iraq might
benefit from increases in funding and
popular support and could choose to
conduct terrorist attacks against US forces
in Iraq.
? Israeli involvement in a war against Iraq
would be a lightning rod for increased
terrorist attacks against both Israel and
Israeli and US interests worldwide.
? Use of violence by competing factions in
Iraq against each other or the United
States-Sunni against Shia; Kurd against
Kurd; Kurd against Arab; any against the
United States-probably also would
encourage terrorist groups to take
advantage of a volatile security
environment to launch attacks within Iraq.
Al Qa'ida probably would see an
opportunity to accelerate its operational
tempo and increase terrorist attacks during
and after a US-Iraq war. The group would be
looking for conflict with Iraq and its
aftermath-as with previous wars or crises-
to divert US attention and resources from
counterterrorist efforts; for US and allied
security measures, particularly around "soft"
targets, to suffer; and for many countries-
including some US allies-to slacken efforts
to hunt down al-Qa'ida and its associates
within their borders.
13
 ? Iraq itself still might not be one of al-
Qa'ida's favored locations for attacks,
given the group's greater operational
presence elsewhere.
? Al Qa'ida, nonetheless, probably would
try to exploit any postwar transition in
Iraq by replicating the tactics it has used
in Afghanistan during the past year to
mount hit-and-run operations against US
personnel. Support for these operations
would come from its network on the
Arabian Peninsula and its Kurdish
associates in northeastern Iraq.
? Al-Qa'ida-which has not given up its
fight in Afghanistan-probably would try
to step up its efforts to re-establish its
presence there while the United States
was diverted with concerns in postwar
Iraq.
To the extent that a new Iraqi
government effectively controlled its territory,
especially in northern Iraq, and was friendlier
to US interests and backed by US military
power, al-Qa'ida's freedom of movement
inside Iraq almost certainly would be
hampered.
? If al-Qa'ida mobilized significant
resources to combat a US presence in
Iraq, it could, at least in the near term,
reduce its overall capability to strike
elsewhere.
The lines between al-Qa'ida and
other terrorist groups around the world,
especially local militants, increasingly could
become blurred in the wake of a US attack
and counterattacks by al-Qa' ida and jihadists.
The targeting by less capable groups and
planners operating on short notice would
mean that such softer targets as US citizens
overseas would become more inviting for
terrorists.
? Attacks could come not only from al-
Qa'ida and other organized Sunni and
Shia extremist groups but also unaffiliated
Muslims as well as left-wing and anti-
imperialist groups.
? In Turkey, the leftist Revolutionary
People's Liberation Party/Front
(DHKP/C, formerly Dev Sol), although
weakened over the past decade, could
target US interests as it did during the
1990-91 war with Iraq.
The threat from terrorism resulting
from a war with Iraq, after an initial spike,
probably would decline slowly over the next
three to five years. If effective
counterterrorist operations continued,
democratization and economic reform began
to take hold in Iraq and elsewhere in the
region, and Arab-Israeli tensions eased, the
terrorist and Islamist appeal most likely
would decrease. These developments would
depend, however, on how quickly political
and economic reforms were translated into
tangible improvements in the daily lives of
people.
? Terrorists probably would feel
increasingly threatened if popular outrage
against the United States began to subside
and political and economic opportunities
increased in Iraq or elsewhere in the
region. These fears might lead to
increased terrorism in the short-term as
terrorists attempt "last-gasp" displays of
strength to bolster support.
(U) Palestinian Groups-A Special Case
Regime change in Iraq would be
unlikely to affect Palestinian terrorism
significantly. The effects that a US-led war in
Iraq would have on support for extremist
causes in the rest of the Arab and Muslim
worlds, however, also would be felt among
the Palestinians.
14
 ? Iraq has increased its financial support
and training for Palestinian terrorist
groups over the past year, and some Iraqi
payments to Palestinian groups have gone
to the families of members of HAMAS,
the Palestine Islamic Jihad, and the al-
Aqsa Martyrs Brigades. These payments
appear not to have had a significant effect
on suicide bombings and other violent
attacks against Israeli targets because the
most important Palestinian terrorist
group-HAMAS--does not depend on
Iraqi encouragement or material
assistance for its continued operations.
? Palestinian terrorist capabilities and
popularity would depend more on Israeli
actions than on what happens in Iraq.
? A favorable political and economic
outcome in Iraq in combination with
visible US engagement in a functioning
peace process could, however, reduce
both recruits and money for Palestinian
terrorism over the longer term.
(U) State Sponsors of Terrorism
A quick US victory over Iraq would
increase the fears of Syria and Iran that they
would become targets of future US military
operations. Neither regime would be
persuaded to end its support for terrorism,
although Damascus would feel increased
pressure to clamp down on Palestinian
terrorist groups based in Syria. Damascus
and Tehran probably would avoid sponsoring
terrorist attacks against the United States
unless they believed US attacks on them were
imminent.
? Tehran's longstanding view of Israel as a
threat to Iranian interests, as well as
continued ideological opposition to
Israel's existence among many of Iran's
clergy, would not change as a result of
Saddam's ouster, leading Iran to sustain
its funding of Hizballah and the
Palestinian Islamic Jihad. In addition,
some Iranian leaders might continue this
support in order to preserve their ability to
influence events in the Levant and the
peace process and also maintain a
contingency capability to attack US
interests through surrogates.
? For the Syrians, Hizballah would remain
its most important lever in pressuring
Israel for the return of the Golan Heights.
15
 Saddam's departure would offer
(U) Roles in a post-Saddam Iraq
The objective of most Middle
Eastern states regarding a post-Saddam Iraq
would be for the territorial integrity of Iraq to
remain intact and for a new regime to become
neither a source of regional instability nor
dominant in the region. The posture of
various regional actors competing for
influence in Iraq would depend, in part, on
whether activities in Iraq were backed by UN
resolution and would range from constructive
involvement in such areas as humanitarian aid
and reconstruction to activities more
detrimental to US interests, including political
meddling or fomenting strife among Iraq's
ethnic and sectarian groups.
potential for enhancing relations between Iraq
and its neighbors. Some rivalries and
suspicions would linger, however, and
perhaps intensify depending on the nature of
the new government.
Iraq's immediate neighbors would
have the greatest stakes in protecting their
interests and would be most likely to pose
challenges for US goals in a post-Saddam
Iraq.
Iran. Iranian leaders would try to
influence the shape of post-Saddam Iraq to
preserve Iranian security and demonstrate that
Iran is an important regional actor. The
degree to which Iran would pursue policies
that either support or undermine US goals in
Iraq would depend on how Tehran viewed
specific threats to its interests and the
potential US reaction.
? Iranian officials would be concerned that
significantly increased autonomy for Iraqi
and Turkish Kurds could incite
secessionist moves by Iran's
approximately 5 million Kurds or that the
United States would encourage Iranian
Kurds to revolt.
? Some within the clerical establishment
also would worry that an autonomous
Shia entity might be created in southern
Iraq, which would be a political and
religious rival for Iran.
 s'1
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? Greater autonomy for either of these
groups, in Tehran's view, would increase
their reliance on the United States at the
expense of Iranian influence.
The more that Iranian leaders-
reformists and hardliners alike-perceived
that Washington's aims in Iraq did not
challenge Tehran's interests or threaten Iran
directly, the better the chance they would
cooperate in the post-war period-or at least
not actively undermine US goals.
? Guaranteeing Iran a role in the
negotiations on the fate of post-Saddam
Iraq-as it had at the Bonn conference for
Afghanistan-might persuade some
Iranian officials to pursue an overt and
constructive means to influence
reconstruction in Iraq. Giving Iran a say
in this process also could give Tehran a
stake in its success.
? The establishment-when possible-of a
mechanism for US and Iranian officials to
communicate on the ground in Iraq could
facilitate dialogue,
Some elements in the Iranian
government could decide to try to counter
aggressively the US presence in Iraq or
challenge US goals following the fall of
Saddam by attempting to use contacts in the
Kurdish and Shia communities to sow dissent
against the US presence and complicate the
formation of a new, pro-US government.
? Elements in the regime also could employ
their own operatives against US
personnel, although this approach would
be hard to conceal.
18
 military action against Syria, a loss of
trade with Baghdad, or the break up of
Iraq. Syria also would want the United
States to push for renewed Israeli-Syrian
peace negotiations aimed at returning the
Golan Heights to Syria.
Syria. The Syrians would view the
prospect of a US-backed regime in Iraq as a
threat. Syrian officials distrust Saddam but
oppose his overthrow by the United States in
part because they believe that removing
Saddam from power is part of a US plan to
change the political map of the Middle East
and encircle Syria. Damascus would prefer
an Iraqi leadership that could help counter a
perceived Turkish-Israeli-Jordanian alliance
but probably has limited ability to influence a
successor regime in the near term. Syrian
leaders would try to assert influence in a post-
Saddam Iraq to prevent the United States
from building a stable, pro-Western
government there, although Damascus would
carefully weigh the risks of such a policy.
Damascus would continue to deepen its
contacts with the roughly 30 Iraqi
opposition groups represented in Syria in
an attempt to maximize its influence in a
post-Saddam Iraq.
? Syria might resist the temptation to
meddle if given US assurances that
Saddam's ouster would not lead to
(U) Broader Security Policies and
Posture Toward the United States
US-led regime change and a long-
term US presence in Iraq would provoke the
most significant security policy adjustments
among Iraq's immediate neighbors. US
antagonists such as Iran and Syria would face
the challenge of accommodating US military
preeminence without subordinating their
regional interests to Washington. For US
Arab allies, the post-Saddam era would raise
strategic concerns that Iraq remained unified
and a bulwark against Iran but also would
raise fears that the expanded US presence in
the region could spark domestic unrest in key
Arab states.
? In the short term, governments in the
region would try to balance domestic
pressures against offending US interests.
Overt government cooperation with the
United States might suffer initially as
authorities focused on domestic threats
from jihadists who perceived new
19
 S `ww
opportunities for helping to bring about
Islamic governments.
? Over the longer run, an outcome that
installed a credible Iraqi regime and
visibly improved Iraqi living conditions
would increase the willingness of regional
governments to cooperate with the United
States.
Beyond adjusting regional ties,
Iviiaaie Eastern states would be likely to have
a strategic interest in forging new global
political and security relationships as
counterweights to US regional preeminence.
Europe's longstanding bid for trade and
investment ties in the region, support for
Palestinian nationalist aspirations, and pursuit
of regional policies that often are independent
of Washington would provide Arab states and
Iran ample ground for expanded relations
with the European Union. Similarly, China's
potential future stake in Middle Eastern
energy resources, drive toward expanded
military capabilities, and traditional arms
relationships with key regional states would
make Beijing newly attractive to regimes
unwilling to accede to indefinite and
unbridled US regional influence. Russia's
influence in energy markets and its status as a
major arms supplier and member of the
quartet on the Arab-Israeli peace process
could be reasons that regional states would
seek closer ties to Moscow. Within the
region, Arab states and Iran would have
added reason to expand relations with each
other, although longstanding suspicion of
Iranian intentions would limit such relations.
? Regimes might be even more willing to
consider new policies if Israel were
involved in the conflict because many in
the region would view such involvement
as coordinated with Washington to
increase Israeli dominance in the region.
Iran. A prolonged US military
presence in a post-Saddam Iraq would further
increase Tehran's perception that the United
States is a threat.
The longer US forces remain in Iraq,
Tehran would become increasingly
convinced that the United States was bent
on encircling Iran and that Iran could
become a target of US military operations.
? Iran would increase the tempo of its
intelligence gathering against US interests
in Iraq to learn more about US intentions
toward Iran.
Iran's suspicions of US intentions,
off, would not preclude attempts to
engage Washington more closely to enhance
Iran's sense of regional security.
F20
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 SECIRTW
Syria. The installation of a US-
aligned regime in Baghdad probably would
cause Syria to reassess but not significantly
alter its core security policies and posture
toward the United States. President Bashar
al-Asad might moderate Syrian foreign policy
somewhat if he assessed that such a change
would help his regime retain power and make
gains vis-a-vis the United States and Israel.
? Damascus probably would step up
cooperation with Iran to enhance its
ability to influence events in Iraq and
maintain pressure on Israel from Lebanon
as a reminder to Washington that it
retained options if Syria perceived no
movement on its regional objectives,
especially the return of the Golan.
? Syria's cooperation with the United States
against al-Qa'ida probably would
continue. Syria views the counter-terror
relationship as an important means of
garnering US goodwill and would seek to
preserve this avenue of communication
unless Damascus concluded that it might
become a target of US military operations.
 (U) A Worse Scenario: Broader Rejection of
the US Military Presence in the Middle East
heightened regional suspicions about
Fong-term US intentions following a US
military campaign in Iraq, continued or
increased violence in the Israeli-Palestinian
conflict, growing popular anti-American
sentiment, increased terrorist threats against
regional regimes, and a new interpretation of
threats to their own security could combine to
prompt Arab states to seek the ouster of US
military forces from their soil.
lwt
 antagonize Islamist parties that made gains in
Pakistan's October 2002 elections.
(U) Weapons of Mass Destruction
The elimination of Iraq's WMD
capabilities probably would not cause other
regional states to abandon either their existing
WMD programs or their desire to develop
such programs. For many of the Arab
countries of the Middle East, Iran, and South
Asia, WMD programs would continue to be
viewed as necessary and integral components
of an overall national security posture for
several reasons, including to survive in a
dangerous neighborhood, enhance regional
prestige, compensate for conventional
military deficiencies, and deter threats from
superior adversaries, particularly Israel-
 and defend the Palestinians, and moved
military forces to Iraq's western region in
2000 ostensibly to deter Israeli military
actions.
States also would be driven to
acquire WMD capabilities or accelerate
programs already in train with the hope of
developing deterrent capabilities before the
programs could be destroyed preemptively.
(U) Impact on the Arab-Israeli
Conflict
Many in the Middle East would
expect the United States to build on its victory
over Iraq by taking a more active role in
resolving the Israeli-Palestinian impasse. The
willingness of regimes to cooperate with
Washington on many issues would depend
significantly on whether the United States met
those expectations.
A change of regime in Iraq alone
would have little impact on the course of the
Israeli-Palestinian conflict, which would
depend more on the political leadership on
both sides and outside-primarily US-help
in resurrecting a peace process. Most
Palestinians view Saddam's rhetoric and
actions championing the Palestinian cause as
primarily symbolic and self-serving, but they
applaud him anyway, especially because they
see the actions of most other Arab leaders
only as rhetorical.
? In addition to his payments to the families
of Palestinian suicide bombers, Saddam
has established a volunteer militia to
"liberate" Jerusalem, given speeches
calling on Israel's neighbors to step up
? Palestinians would continue to view such
rejectionist groups as HAMAS and the
Palestinian Islamic Jihad, which do not
rely on Iraq, as more effective than
Baghdad in pressuring Israel.
? If Israel became militarily involved in Iraq
or used the conflict as a reason to take
harsher action against the Palestinians or
move militarily against Hizballah, Syria,
or Lebanon, anti-Israeli sentiment would
rise in the region, making renewed peace
negotiations even more difficult.
Regime change in Iraq probably
would not have a major impact on Yassir
Arafat's current policy vis-a-vis the United
States. Arafat in the last two years has not
made a serious and sustained effort to stop
Palestinian violence primarily because he
perceives that the risks of such an undertaking
would not merit the domestic political capital
he believes he would need to expend,
according to various sensitive reports. Arafat
does not believe Israeli Prime Minister
Sharon will ever negotiate seriously with the
26
S+ twru)
 Palestinians and is pessimistic the United
States would pressure Sharon into meaningful
talks. As a result, Arafat who feels his
personal preeminence in Palestinian politics is
unchallenged-probably would be content to
let the security situation remain chaotic.
Palestinian views toward negotiating
with Israel also might be affected by the
degree to which they perceived that they
continued to have support from other actors
with the capability to pressure Israel-
Hizballah, Iran, and Syria, for example.
Regarding Syria, an unambiguous
US commitment to satisfy Palestinian national
aspirations and revive Israeli-Syrian
negotiations on the basis of the Madrid
framework and UN resolutions would help
ease Syrian suspicion toward the United
(U) Economic Consequences
The ouster of Saddam Husayn would
have mostly negative but variable economic
effects in the region, including potential
decreases in oil revenues and non-oil trade,
declines in tourism, and increased refugee
flows.
World oil prices probably would
spike to at least $40 per barrel during-and in
the run-up to and immediate aftermath of-a
war because of the uncertainty associated
with a cutoff in Iraq's oil exports of roughly
2 million barrels per day (b/d). The impact on
prices would depend on the level of damage
to Iraq's oil infrastructure, industry
expectations about the length of the
disruption, the use of government-owned
strategic stocks by consuming nations, and
whether Venezuela's oil output remained
disrupted by oil worker strikes. OPEC
members would have the surplus capacity to
offset lost Iraqi exports and have consistently
pledged to compensate for Iraqi disruptions to
stabilize the market, but a simultaneous loss
of Venezuelan and Iraqi output would exceed
their surplus capacity.
? OPEC ministers fear a prolonged period
of high oil prices would harm the global
economy, boost non-OPEC investment,
and spur the development of alternative
energy sources. OPEC producers with
spare capacity also would be tempted to
increase production to reap the windfall
revenues from a spike in prices.
? Saudi Arabia's willingness to raise output
would be crucial because Riyadh
maintains more than half of global spare
capacity-nearly 2 million b/d-and has
strong influence over other Gulf
exporters, which together hold another 1.2
million b/d.
? Prospects for a speedy resumption of
Venezuelan output are unclear, and
overlapping Iraqi and Venezuelan
disruptions could remove a combined 5
million b/d from the world market, about
equal to the disruption caused by the
1990-91 Gulf War and surpassing the 3
million b/d of surplus capacity in other
OPEC producers.
 Over the longer term, oil prices could
wea and fall to about $15 per barrel if
Iraqi oil production and exports expand and
Venezuela returns to normal, other OPEC
producers were unwilling to surrender market
share to Baghdad, and global economic
performance remains modest. Sustained low
prices probably would lead to worsening
economic and political conditions for some
key OPEC producers, who would see growing
budgetary pressures in an environment of
lower oil prices and volumes and a need to cut
fuel and other subsidies to their people due to
lost revenues. All of Iraq's neighbors would
want assurances that the Iraqi oil sector would
be managed to protect their interests and that
Baghdad would quickly reintegrate into the
OPEC quota system.
A quick return of oil output to or near
Baghdad's current capacity of 3.1 million
b/d would put downward pressure on oil
prices that could set off a battle for market
share among Iraq, Saudi Arabia, and other
OPEC members, possibly leading to a
price collapse and splits in OPEC's
cohesion. The risk of a market share
battle would grow if OPEC members
believed Iraq was going to aggressively
expand its capacity.
? Jordan, Syria, and Turkey would stand to
lose critical spending power, jobs, and
trade in non-oil goods made possible by
the millions of dollars these countries
saved annually from heavily discounted
oil exports from Iraq.
L Throughout the region, disruptions in
tra a an tourism plus flows of tens, if not
hundreds, of thousands of refugees almost
certainly would cause a slowdown in
economic activity. Worker remittances, a key
source of revenue for many countries,
probably also would fall.
? Trade with Iraq, including under the UN
Oil-For-Food program, accounted for
about 20 percent of Jordan's GDP in 2001
and roughly 13 percent of its foreign
exchange. Jordan and Syria both depend
on their "special" relationship with Iraq to
trade their goods and services, which may
not compete well in other markets.
Egypt relies on expatriate remittances
from workers in Gulf states, which could
be curtailed because of a war, to help its
balance of payments. In addition, tourism
traditionally is Cairo's largest source of
foreign exchange and accounts for about
11 percent of GDP and some 15 percent
of total employment.
? Jordan, Iran, and Turkey-already
burdened by significant refugee
populations-would be hardest hit by an
influx of new refugees.
? If Saddam carried out his threats to ignite
oil wells or destroy dams or if a WMD
catastrophe occurs, the resulting
humanitarian crisis could affect millions
of Iraqis in addition to Coalition troops on
the ground in some areas. These potential
scenarios, as well as the possibility of
extended combat operations in major Iraqi
cities, would cost the international
S EV 28
 (U) Taking a Bite Out of Regional
Economies
JTourism generates an important
revenue stream for Egypt. Following the
11 September 2001 terrorist attacks in the
United States, revenues fell by $1.3 billion
last fiscal year and could sustain a similar
decline in the aftermath of an attack on Iraq.
Egypt also relies on expatriate remittances
from Gulf states as a major source of foreign
exchange, which probably also would decline
after an attack on Iraq.
(U) A study that Turkey presented to the EU
in August 2002 shows that a conflict with Iraq
would cut Turkish economic growth in 2003
from 4.9 percent to 3.1 percent-a loss of
about $3 billion mostly because a $500
million decline in exports and a $1 billion (15
percent) drop in tourism revenues.
Jordan imports all of its oil from
Iraq-worth more than $1 billion per year at
market prices-at deep discounts and in
exchange for Jordanian goods. Termination
of supply without a ready substitute at a
similar discount would force Amman to make
painful budget cuts to finance other sources of
oil. A war also would hurt Jordan's vital
export and tourism sectors. Jordan also
supplies goods to Iraq through the Oil-for-
Food (OFF) program. OFF contracts-many
of which are for re-exports rather than
Jordanian-origin products-totaled $870
million (10 percent of GDP) in 2001.
community several billion dollars in
reconstruction and humanitarian aid.
Regional perceptions of the
economic uncertainties associated with a post-
Saddam Iraq probably would lead many states
to seek US assurances that their losses would
be compensated and to request billions in US
economic assistance including cash, civilian
and military goods, debt relief, and increased
access to US markets. US support for key
political goals also could be sought.
(U) Prospects for Democratic
Reform
The exemplar of a more politically
liberal Iraq probably would not, by itself, be a
catalyst for more wide-ranging political and
economic change throughout the region,
although it could raise expectations in the
small numbers of reformers in the region for
greater political liberalization. Reform in any
Muslim country, however, would be more the
result of conditions, events, and debates
29
9ECHO
 within that country than events elsewhere in
the region. Regardless of how positively
regional leaders viewed their relations with
the United States and might want to
accommodate US goals of political openness,
the Middle East will remain a difficult
environment in which to advance democracy
and liberalism.
? The concepts of democracy and
representative government are alien to
most Arab Middle Eastern political
cultures-grounded in histories that
derive mainly from subjugation to larger
empires and then to European colonial
rule.
? Many states lack such important
components of democracy as the concept
of a loyal opposition, vibrant civil society
institutions, respect for rule of law,
transparency, and a strong middle class.
Many rulers in the region recognize
the potential role of reform in economic
expansion but fear a spillover into politics. In
response to pressure to allow more public
participation, some Arab leaders have taken a
few tentative steps in the past decade to open
their political systems. Some states have
consultative councils that serve primarily as
safety valves with no practical authority.
These councils would be unlikely to evolve
into true power-sharing bodies unless
supported by regime elites.
? Even if leaders were convinced that
political reform were necessary, they
would face such obstacles as entrenched
interests of the secular and religious elites.
The closed and unreformed political
systems in many Arab countries also reflect
complex sets of deals, understandings, and
patron-client relationships that are based on
long-standing ethnic, sectarian, or tribal
identities. Oil wealth has enabled some
autocratic regimes to buy off their populations
with a social contract that provides for the
basic needs of the populace in return for
maintaining the political status quo.
? Most regimes in the region so far have
responded successfully to pressures to
renegotiate fraying social contracts by the
deeply ingrained habit of incremen-
talism-reforming and restructuring just
enough to get by-and would be unlikely
to break this habit easily.
Many leaders also have a long record
of pulling back popular reforms-often by
force-when they appear to empower groups
beyond the traditional ruling elites. As long
as radical Islamist sentiment remained strong
in the region and secular, liberal alternatives
remained weak, the possibility of Islamists
winning free elections-as happened in
Algeria a decade ago-would give some
governments strong pause about opening up
their political systems.
In the near-term, the use of US
military force against Iraq may be more likely
to stifle than nurture democratic movements
in some regional states because governments
would use political repression to quell violent
public opposition to the war and perhaps to
the local government's indirect association
with it.
? After a conflict, the long-term presence of
US forces in Iraq also could fuel
 SEC
perceptions that the United States was
there to reshape the region as part of a
larger war against Arabs and Muslims.
Such perceptions might heighten calls for
more radical Islamic systems of
governance,
which would cause regimes
to clamp down even harder on
oppositionists.
? Some regimes
0-would continue to cite ongoing
Arab-Israeli violence as the reason to
continue repressive policies and delay
reforms.
The manner in which a new
government emerged in Baghdad, including
involvement by the UN, and the relative
success of policies such a government
adopted would be important determinants of
how it would be perceived by regional leaders
and publics.
? A perception that democracy was
"imposed" on Iraq would resurrect
entrenched fears of colonialism and lessen
further the likelihood that Iraq could serve
as a model for political liberalization in
the region.
? Confronted with a more liberal
government in Iraq that was perceived as
not imposed and as having improved the
living standard for most Iraqis, an
increasing number of Arabs probably
would look inward at their own political
culture and the reasons why it is
dysfunctional, perhaps sparking more
public debate about democratization.
Lingering suspicion of the US role in the
region, however, would tend to reinforce
perceptions that the new Iraqi government
was primarily a US creation.
31
SE' ~
 32
 33
5 /~
 34
S T~-
 A more democratic regime in Iraq
could encourage civil society activists in
Syria but also probably would stiffen regime
resistance to reform. The Asad regime
probably would view the example of a
democratic regime in Iraq as a potential threat
to authoritarian rule in Syria. Syrian officials
privately would be concerned that removing
Saddam could lead to instability in Iraq and
increased demands for autonomy from
minority groups in neighboring states,
including the Kurds in Syria.
The country where regime change in
Iraq would have the best chance to tip the
political balance in favor of reform is Iran as
both reformers and hardliners would probe for
advantages.
? A quick and decisive Coalition victory in
Iraq most likely would strengthen the
hand of reformers favoring engagement
and democracy-building at home as the
most effective way to forestall a US
attack.
? A prolonged and destructive war in Iraq
probably would intensify the Iranian
political divide. Hardliners could use the
pretext of a potential US invasion to crack
down and impose a state of emergency,
tightening theocratic rule.
A post-Saddam Iraq also might serve
as a haven for dissident Shia clerics opposed
to the principle of clerical rule. Najaf and
Karbala in Iraq are traditional seats of Shia
Islamic scholarship to which dissident Iranian
clerics could move-as did Ayatollah
Khomeini prior to the 1979 revolution-to
continue teaching and organizing outside Iran.
35
S>F. /~
 sircit"
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 The National Intelligence Council
The National Intelligence Council (NIC) manages the Intelligence
Community's estimative process, incorporating the best available
expertise inside and outside the government. It reports to the
Director of Central Intelligence in his capacity as head of the US
Intelligence Community and speaks authoritatively on substantive
issues for the Community as a whole.
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Robert Houdek
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Mark Schwendler,
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Fulton T. Armstrong
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