The Ba’ath Regime and the Rise of Saddam
Hussein
Three distinct phases of Iraqi development
 1921-1958: Constitutional monarchy;
 1958-1968: Republican (military) regimes;
 1968-2003: Government controlled by the
socialist, pan-Arab Baath Party,
General Qasim and his key advisors were
influenced by socialist models:
 a planned economy,
 elimination of foreign economic influences (notably in
the oil sector),
 and land reform.
Expropriations and nationalizations:
 In 1961, the partly British-owned Iraq Petroleum
Company (IPC). The rest of petroleum industry was
nationalized in stages until 1973;
 expropriation of land;
 large-scale industry, banking, insurance and services
were nationalized in 1964 (the Arif government).
The Ba’ath ideology
 Arab rebirth;
 the failure of the Arabs to achieve the promise of
pan-Arab unity blamed on the West;
 the transformation of the economic system from free
enterprise to collectivism;
 the assertion of the country's economic
independence.
The metamorphosis of Iraq from Third World
to developed country driven by:
 First, the need to spread wealth more equitably;
 Second, the need to diversify Iraq’s economy to
avoid overdependence on a single commodity (oil).
Reasons for nationalization
 1. in line with the Ba’ath Party ideology;
 2. enabled the government to weaken rival power
centers, whether landlords, the Shia business
community or foreign oil companies;
 3. to satisfy the large sector of the population that
was employed by, and dependent on, the state.
The oil boom following the first Arab oil
embargo
 Iraq was able for some years to pursue its socialist model without
having to make hard choices between solvency and other priorities such
as welfare benefits, infrastructure development, and even armed forces
modernization.
 The country was earning $75 billion a year in the early 1970s from
oil exports (in 2003 dollars). Per capita income had peaked at over
$7,500 in 1980.
Early 1980s
 one of the Arab World’s most advanced economies;
 It had besides petroleum -- a considerable industrial sector, a welldeveloped transport system, and comparatively good infrastructure.
 Iraq had a relatively large middle class, per capita income levels
comparable to Venezuela, Trinidad or Korea (it rose from 28% of urban
population in 1958, to 54% in 1988).
 one of the best educational systems in the Arab world, a well educated
population and generally good standards of medical care.
Consequences of the war with Iran
 The eight year war with Iran drained the economy of its surplus oil
revenue and forced the regime into debt;
 Iraqis’ inability to obtain inputs, spare parts or to export oil or other
products due to damaged ports;
 Weak points in the economic development strategy became
apparent (very little planning, transportation and suplly
bottlenecks, lack of technical skills, unwilllingness to assume
authority or accountability);
 Rising prices;
 Relatively low oil prices, the exhaustion of its foreign exchange, growing
import bills, and debt service payments all strained Iraq’s balance of
payments
Deviation from the socialist model
(1980s)
 the government abolished a labor law that had
guaranteed full employment;
 laid off thousands of government workers (many of
whom were foreign nationals);
 transferred other civil service workers to factory jobs;
 and privatized government-owned enterprises,
including: bus companies, gas stations, agricultural
enterprises, department stores, and factories.
Following Iraq’s invasion of Kuwait
in 1990 focus on:
 circumventing the international sanctions
imposed as a consequence of the invasion,
 taking advantage of the Oil for Food Program,
 and obtaining additional assistance through
humanitarian donations,
 illicit trade, and private barter arrangements.
Since 1991
 The decline of education, health and living
standards have declined;
 the lower ranks of state employees suffered
greatly from years of war, economic sanctions,
and the general decline of government revenues
 Salaries did not keep up with hyperinflation.
More recent trends
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Switch to export-oriented development;
Diminished external rents;
Flows of private capital;
High unemployemnt rates
Security Apparatus
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The Ba’ath party’s cellular structure;
System of military commissars;
The Republican Guard;
Party’s paramilitary militia force;
The Fedayeen: created in October 1994 in reaction
to the Shiites and Kurdish uprisings of March 1991.