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"Man wants to forget the bad stuff and believe in the made-up good stuff. Its easier that way."
--Rashomon, Kurosawa
"He (Reagan) may have forgotten us.
But we have not forgotten him."
-- Angolan refugee and landmine victim"Folly is a more dangerous enemy to the good than evil. One can protest against evil; it can be unmasked and, if need be, prevented by force....Against folly we have no defense. Neither protests nor force can touch it; reasoning is no use; acts that contradict personal prejudices can simply be disbelieved. Indeed, the fool can counter by criticizing them, and if they are undeniable, they can just be pushed aside.... So the fool, as distinct from the scoundrel, is completely self-satisfied. In fact, he can easily become dangerous, as it does not take much to make him aggressive...."
Following last week's prolonged national memorial to President Reagan, the most elaborate in US history, most Americans have turned their attention back to the troubled present. But we cannot resist continuing down the revisionist path that we started to clear in Part One of this series.
Contrary to Henry Ford, history is not "bunk," nor is it "just one damn thing after another." In fact, it is one of our most valuable possessions. But unless we take the time to learn from it, it can easily come back to haunt us -- as it is doing right now. At the very least this exercise will prepare us to evaluate President Clinton's new autobiography, which is due out next week.
As noted in Part One, most recent discussions of Ronald Reagan's foreign policy legacy have focused almost entirely on the Cold War. Even there, as we argued, his legacy is decidedly mixed. While he may have helped to pressure the Soviets to reform, he also took incredible risks with the balance of nuclear forces, including some risks that we are still living with to this day.
When we turn from superpower relations to Reagan's impact on developing countries, the legacy is even starker. In The Blood Bankers, we've detailed how the Reagan Administration's lax policies toward country lending and bank regulation exacerbated the 1982-83 Third World debt crisis. And then the administration did very little to help developing countries fundamentally restructure their debt burdens and recover. By the end of the 1980s, most country debt burdens were higher than ever.
Here we will focus on another long-term legacy of Reagan's relations with the developing world -- the consequences of his support for a plethora of reactionary dictatorships and contra armies all over the globe.
Most Americans are probably not aware of it, but this bloody-minded policy fostered several nasty wars in developing countries that have cost literally millions of lives -- and are still producing fatalities every day, by way of wounds, continuing conflicts, unexploded ordnance, and landmines.
Furthermore, as described below, the Reagan Administration was also responsible for several of the clearest examples in history of state-sponsored terrorism.
Unfortunately, it turns out that very little of this was really necessary, either from the standpoint of defeating the Soviets, pushing the world toward democracy and free markets, or enhancing US security.
Indeed, in the long run, Reagan's policies basically destabilized a long list of developing countries and increased their antagonism towards the US. Combined with the policies of "benign neglect," stop-go intervention, and ineffective neoliberal reforms that characterized the Clinton Administration's policies toward developing countries, and the neoconservative policies pursued by both Bushes, it is no accident that America's reputation in the developing world is now at a record low.
Unfortunately, like some of the risks that Reagan's policies introduced into the nuclear balance, these effects may have a very long half-life. Surely they will be with us long after Ronald Reagan has met his Maker. We just hope for the Gipper's sake that his Maker does not read this article before pronouncing judgment upon him.
There is an abundance of examples of the Reagan Administration's strong negative impacts on developing countries. To cite just a few:
In the case of the Philippines, the Reagan Administration was a staunch ally of Ferdinand and Imelda Marcos right up to their last helicopter ride to Hawaii in February 1986. Vice President George H.W. Bush visited Manila in March 1981, soon after Reagan was elected, to thank him for his generous support. He toasted Marcos in glowing terms: "We love your adherence to democratic principles and democratic process....." The thousands of political opponents who were tortured, imprisoned, or died fighting this corrupt conjugal dictatorship and the millions of Filipinos who have spent the last twenty-five years servicing the couples' unproductive foreign and domestic debts would probably disagree.
In the case of Iran and Iraq, Reagan helped arm and finance Saddam Hussein throughout the 1980s, encouraged the Saudis and Kuwaitis to finance his invasion of Iran when it bogged down, helped to equip him with chemical and biological weapons, sent Donald Rumsfeld to Baghdad to assure close relations and propose a new pipeline to Saddam to help him export his oil, and even provided a team of 60 Pentagon analysts who sat in Baghdad, using US satellite imagery to target Saddam's chemical weapons against the Iranians.
At the same time, as the Iran-Contra arms scandal later disclosed, Reagan also helped Iran buy spare parts and advanced weapons for use against Iraq. He also looked the other way when Saddam decided to turn his US-supplied Bell Helicopters and French-supplied Mirage jets and chemical weapons on the defenseless Kurds at Halabja. Of course, the fact that the UN, under strong US pressure, did nothing at the time to condemn Saddam for this behavior did not exactly discourage further aggression.
This bipolar policy contributed to prolonging the 1980-88 Iran-Iraq War, one of the largest and bloodiest land wars since World War II. It cost 500,000 to 1 million lives and 1-2 million wounded, and created more than 2.5 million refugees. It also caused a huge amount of damage to both countries' economies, and left Iraq, in particular, broke and heavily indebted. As we've argued in The Blood Bankers, that destabilization, in turn, contributed significantly to Saddam's 1991 decision to invade Kuwait in 1991 -- and ultimately, our current Iraq fiasco.
In the case of South Africa, the Reagan Administration steadfastly opposed any US or UN sanctions on international trade and investment. Indeed, it continued to work closely with the apartheid regime on many different fronts, including the civil wars in Angola (see below), Namibia, and Mozambique.
It also now appears that both Carter and Reagan turned a blind eye to South Africa's development of nuclear weapons and ballistic missiles, in collaboration with Israel, which purchased its uranium from the Pretoria regime. Fortunately, no thanks to Reagan, Bush I, or for that matter, Bill Clinton, apartheid came to an end in the early 1990s, and South Africa became the first nuclear power ever to dismantle its nuclear weapons.
Rios Montt
In the case of Guatemala, Reagan gave a warm embrace to the brutal dictatorship of General Efrain Rios Montt in the early 1980s. Rios Montt, a graduate of Fort Benning's School for the Americas, was also an ordained "born-again" minister in California-based Gospel Outreach's Guatemala Verbo evangelical church. Evidently that combination endeared him to the Reagan Administration -- US Assistant Secretary of State Thomas Enders praised him for his "effective counter-insurgency," and President Reagan called him "a man of great personal integrity," "totally dedicated to democracy," someone who Amnesty International had given "a bum rap."
This cleared the way for hundreds of $millions in World Bank loans and US aid that helped to make Rios Montt and his generals rich. Meanwhile, the junta implemented a genocide that a UN-backed Truth Commission later found was responsible for the deaths of 200,000 Guatemalan peasants, mainly Mayan Indians.
General Galtieri
In the case of Argentina, Reagan turned a blind eye to the "dirty war" waged by the military junta against its opponents, at a cost of 30,000 lives and many more destroyed families.
When this junta launched the April 1982 invasion of the Falkland Islands to deflect public attention from its political and economic woes, Reagan and Secretary of State Al Haig ultimately decided to side with the UK's Margaret Thatcher, a fellow neoconservative. However, key Reagan aids Jeane Kirkpatrick and Michael Deaver worked behind the scenes to support the fascist junta, encouraging it to believe that the US might stay neutral. The very evening that the invasion was launched, Kirkpatrick was the guest of honor at an elaborate Washington D.C. banquet that was sponsored by the junta.
In the case of Panama, Reagan's CIA subsidized and promoted the rise of General Manual Noriega, another graduate of the notorious US School of the Americas. The US made extensive use of Noriega's intelligence gathering capabilities during the contra war with Nicaragua (see below).
This encouraged Noriega to believe that he could get away with anything. For a while he did: in the early 1980s, he became one of the most important cocaine wholesalers in the region, shipping a ton of coke per month to Miami on INAIR, a Panama airline that he co-owned, literally under the US Customs' nose. By 1989, even George H.W. Bush was embarrassed, and he had the dictator forcibly removed -- at a cost of the lives of 23 US troops, 314 Panamanian Defense Forces, and several hundred Panamanian civilians.
In the case of tiny Honduras, the poorest country in Central America, the Reagan administration turned another of its many blind eyes to the rise of death squads in the early 1980s. John Negroponte, the former US Ambassador to the UN and our new "proconsul" in Iraq, served as Ambassador to Honduras from 1981 to 1985. As this author knows from first-hand experience, reports of human rights abuses in Honduras were rampant during this period. It is hard to believe that Negroponte, who cultivated close relations with the Honduran military, was simply unaware of all these reports.
One of the key offenders was Battalion 3-16, the CIA-trained and funded Honduran military unit that was responsible for hundreds of disappearances and torture cases, including several that involved Americans.
One US embassy official later reported that in 1982, Negroponte had ordered any mention of such abuses removed from his annual Human Rights reports to Congress. Negroponte has denied any knowledge of this, and has skated through several confirmation hearings to arrive at the very top of the US diplomatic corps, where he will soon be running the world's largest US embassy. 
In the case of El Salvador, the Reagan Administration also sharply increased economic and military support to a brutal oligarchical regime that was also deeply involved in death squads. President Carter had also provided military aid to the regime -- indeed, Archbishop Oscar Romero's condemnation of that aid was one key factor in his assassination in March 1980. After Reagan's November 1980 election, the Salvadoran military felt it had a "green light" to become even more aggressive with its opponents in the Church and unions, as well as the FMLN rebels.
One immediate byproduct of the "green light" was the murder of four US Maryknoll nuns in December 1980. Reagan's first Secretary of State Al Haig, later suggested that the nuns might have been killed in a "crossfire" when they "ran a roadblock. " But their murders were later attributed to five Salvador National Guard members, who, in turn, appear to have acted on orders from senior members of the Salvador military.
A law suit was eventually brought on behalf of the nuns against the commanders to whom these guardsmen ultimately reported -- Jose Guillermo Garcia, El Salvador's Minister of Defense from 1979-1983, and Carlos Eugenio Vides Casanova, the former head of the National Guard, the Reagan Administration's key allies in the early 1980s, who were now living in Florida.
But in 2000 a jury ruled that even though they had given the orders, they did not have "effective control" over their subordinates, given the instability in the country. However, in July 2002, another jury in West Palm Beach found the duo liable for torture and other human rights abuses against three other victims, and ordered them to pay $54.6 million in damages.
Meanwhile, their many collaborators in the Reagan Administration have of course gotten off scot free. Reagan's insistence on a military solution to the conflict in El Salvador helped to perpetuate the civil war throughout the 1980s, at a cost of more than 75,000 lives.Ultimately, under Bush I and Clinton, the long-delayed negotiated solution was achieved.
As for Archbishop Romero's assassin, he has never been found. There are credible reports, however, that his actual triggerman now lives -- naturally enough -- in Honduras.
In the case of Lebanon, Reagan was responsible for a broken promise to the Palestinians that ultimately contributed to the 1982 massacres at the Sabra/ Shatila refugee camps. To get the PLO to withdraw from Beirut, Reagan promised to protect Palestinian non-combatant refugees in those camps. Indeed, the PLO fighters left on August 24, 1982, and US Marines landed on August 25. But they were withdrawn just three weeks later, on September 10, after the PLO fighters left. Ariel Sharon,Israel's Defense Minister at the time, promptly ordered the Israeli Defense Forces to surround the camps. They refused to let anyone leave, and then permitted his Lebanese allies, the rightist Christian Phalangists, to move in.
The result was the slaughter of at least 900 to 3000 unarmed Palestinians, including many women and children, on September 16-18, 1982. As former Secretary of State George Schultze later commented, "The brutal fact is, we are partially responsible." Israeli's own Kahan Commission later found Sharon "indirectly responsible" for the massacre, but imposed no penalties, other than forcing him to resign as Defense Minister.
In the case of Angola, Reagan, in cooperation with South Africa's apartheid regime and Zaire's dictator Mobutu, helped to sponsor UNITA, Joseph Savimbi's rebel band, against the left-leaning MPLA, which also happened to have far stronger support from the Angolan people. Reagan hailed the power-hungry Savimbi as a "freedom fighter," and enlisted wealthy arch-conservatives like beer merchant Joseph Coors and Rite-Aid owner Lewis E.Lehrman to organize assistance and lobby Congress for millions in aid.
In fact Savimbi turned out to be one of the world's most lethal terrorists. Even after UNITA lost UN-supervised elections in September 1992, he continued the war, financing his operations by trafficking in "blood diamonds."
The resulting guerilla war cost the Angolan people up to 1 million dead, turned a quarter of Angola's 12 million people into refugees, and devastated health and education programs and the domestic economy. It also left an estimated 6 to 20,000,000 land mines scattered all across the country, one of the world's most heavily mined countries, with more than 80,000 amputees as a byproduct. Only with Savimbi was finally killed in May 2002 was the country finally restored to peace.
Savimbi
In the case of Afghanistan, Reagan considerably expanded aid to the Afghan rebels in the early 1980s, providing them more than $1 billion in arms and sophisticated weapons like Stinger missiles to fight the Soviets. The resulting battle ultimately cost the Soviets 15,000 lives. But the price to Afghanistan was much higher -- the Afghan people lost more than 1 million dead and wounded, plus millions of refugees. Furthermore, after the Soviets finally left in the 1989, the country became a stomping ground for opium-dealing warlords, religious fanatics like the Taliban, and al-Qaeda's global terrorists.
Furthermore, we now know that Gorbachev had offered to pull Soviet troops out of Afghanistan in 1987, in exchange for reduced US arm shipments to the rebels. However, he was rebuffed by the Reagan Administration, which wanted to prolong the Soviets' agony. This not only cost a great many more Afghan (and Soviet) lives, but also helped turn Osama Bin Laden from a nobody into a folk hero. All this helped to pave the way to 9/11, the continuing war in Afghanistan, and the even more dangerous global terrorist war.
All told, then, the Reagan Administration clearly has a lot to answer for with respect to the developing world. And this is even apart from one of the most perfidious examples of Reagan's brutilitarian policies, that of Nicaragua -- as the following excerpt from The Blood Bankers makes clear.
NICARAGUA'S COUNTERREVOLUTION
By the end of 1980, with Nicaragua's civil war concluded, General Anastasio Somoza deBayle dead in Paraguay, and the country''s debt settlement with its foreign banks concluded, many Nicaraguans were looking forward to rebuilding their economy and finally achieving a more peaceful society. Alas, it was not to be.
Anastasio Somoza DeBayle
Undoubtedly the Sandinistas deserve some of the blame for the way things turned out, though, as we will see, the odds were clearly stacked against them. As the strongest faction in the winning coalition, and “the boys with the guns,” at first they commanded overwhelming popular support for having rid the country of the world’s oldest family dictatorship outside of Saudi Arabia and Paraguay. However, like Venezuela’s Hugo Chavez in the 1990s, they were torn between leading a social revolution and building a multi-party democracy.
Their hero, Augusto “Cesar” Sandino, “the general of free men,” had fought the US military and the Nicaraguan army for six years to a standstill, before he was betrayed and murdered by General Anastasio Somoza Garcia in 1934. After a decade of insurgency in the 1970s, the Sandinistas’ most important experiences to prepare them for the job of running the country were limited to armed struggle, clandestine organizing, and some very rough times in Somoza’s jails. Unhappily, one of their most accomplished political leaders, Carlos Fonseca, had been murdered by the National Guard in 1976.
Sandino
On the other hand, as South Africa demonstrates, it is not impossible for committed revolutionaries to lead a fairly peaceful transition to a multi-party democracy. After all, the ANC had waged just as long a struggle against a state that was no less repressive as Somoza’s. Many of the ANC’s supporters were also just as radical as the Sandinistas, and it also sourced most of its weapons and advisors from radical watering holes like the Soviet Union, East Germany and Libya.
However, ironically, South Africa was not as easy for the US to push around as Nicaragua. South Africa accounted for two-thirds of sub-Saharan Africa’s economy and most of the world’s gold, diamonds, platinum, and vanadium. By 1982, with some help from the UK and Israel, it had acquired nuclear weapons. Compared with Nicaragua, South Africa’s economy was actually in pretty good shape when the ANC came to power. While there had been a protracted low-intensity war against apartheid, South Africa managed to avoid the full-blown civil war that Nicaragua was forced to undertake in the 1970s to rid itself of the Somoza dictatorship.
Nicaragua was also objectively a far less strategically important target. To Washington’s national security planners, however, that made it an ideal opportunity for a relatively low-cost “demonstration." Its population was the same as Iowa’s. Its entire economy was smaller than Des Moines’s. It had few distinctive natural resources. Its only “weapons of mass destruction” were volcanoes, earthquakes, and hurricanes. It was surrounded by other countries that were also of modest strategic value – except for whatever symbolic value was associated with repeatedly crushing the aspirations of impoverished peasants into the dirt.
During the late 19th century, Nicaragua had been selected several times over by US Canal Commissions for a canal across Central America, until Teddy Roosevelt finally opted to create Panama and build a canal across it in 1902, for reasons that had more to do with Wall Street than engineering. After that, Nicaragua’s canal plans went nowhere, especially after the US Marines landed in 1910 to collect debts owed to British and US banks and to depose a nationalist leader who, among other things, made the fatal mistake of seeking European funding for an alternative to the Panama canal.
The ANC also had one other weapon that the Sandinistas clearly lacked. This was the extraordinary wisdom and good fortune of 72-year old Nelson Mandela, who had earned everyone’s respect during his 27 years in prison. He had also learned survival skills like patience, diplomacy, and the capacity for making adroit compromises with bitter enemies. Under his influence, the ANC set out to build a mass party. It agreed to hold new elections within two years of his release. It went out of its way to commit itself publicly to multi-party democracy, a market economy, civil liberties, and peaceful reconciliation.
Most of the Sandinistas’ top leaders – the so-called cupola -- were not really interested in building a mass party, much less a multi-party democracy, at least not initially. They saw themselves as a vanguard party, leading the masses toward a social revolution. As Sergio Ramirez, a leading FSLN member who served as Nicaragua’s Vice President under Daniel Ortega from 1984 to 1990, wrote in his 1999 book, Adios Muchachos,
The FSLN was not prepared...to assume its role of party of opposition inside a democratic system, because it had never been designed for this. Its vertical structure was the inspiration of Leninist manuals, of the impositions of the war and of caudillismo, our oldest cultural heritage.
To be fair, the FSLN leadership also believed that the first priority was to attack the country’s dire health, literacy, land ownership, and education problems, and to build “direct democracy” through civic organizations, not through party politics and national elections. Given the country’s emergency and the need to recover from the civil war, this was entirely understandable. But it did provide cheap shots for the FSLN’s opponents and the mainstream US media, which basically wrote Nicaragua off very early as a reprise of Castro’s Cuba.
The Sandinistas were also widely criticized for lacking the soft touch when it came to domestic politics. Among their many ham-handed moves was their May 1980 decision to expand the Council of State to include “mass organizations,” the August 1980 decision to postpone elections until 1984, the rough way they dealt with the Miskito Indians, the 1986 decision to shut down the (by then, CIA-subsidized) La Prensa, and Daniel Ortega’s various high-visibility trips to Havana, Moscow, Libya and Gucci’s eyeglass counter in New York They were also criticized for implementing a compulsory draft, detaining alleged contra sympathizers without trial after the contra war heated up, permitting the FSLN’s National Directorate (Daniel Ortega, Tomas Borge, Victor Tirado, Henry Ruiz, and Bayardo Arce) to remain an unelected (all-male) body until 1991, and seizing a huge amount of property from ex-Somocistas, even middle-class ones, for their own use during the “pinata” period after Ortega lost the 1990 election -- including more than a few beach houses.
At the same time, they were not given much credit for preserving a mixed economy, reforming the health and education systems, pursuing aid from numerous non-Communist countries in Latin America and Europe, implementing a badly-needed land reform, tolerating the virulent La Prensa, which supported the contras and called for their overthrow, until they finally reached the limit and shut it down in 1986, ultimately holding free elections in November 1984 and February 1990, and respecting the outcome of those elections even when, as in 1990 (...and 1996, and 2001..) they lost.
The basic reality is that from at least 1981 on, Nicaragua’s new government was operating in an increasingly hostile international environment, where the Western media and the USG, as well as the Miami-based Somocistas, were predisposed to seize upon the slightest departures from Roberts’ Rules of Orders to consign them to hell – and if no such departures were readily at hand, to invent them out of whole cloth. These hostile attitudes had much less to do with the FSLN’s behavior than with the USG’s new aggressive stance with respect to the Soviet Union – actually dating back at least to President Carter’s initiation of a contra-like war against the Soviet-backed government in Afghanistan in July 1979.
STATE-FUNDED TERRORISM - REAGAN STYLE
So, despite all the FSLN’s undeniable missteps, it would probably have taken divine intervention to save Nicaragua from the wrath of Ronald Reagan, who decided almost immediately upon taking office to single tiny Nicaragua out for a replay of the Carter/ Brzezinski strategy in Afghanistan.
As former CIA analyst David MacMichael testified at the International Court of the Hague’s hearings on a lawsuit brought by Nicaragua against the US in 1986, from early 1981 on, the US Government set out to create a “proxy army” that would “provoke cross-border attacks by Nicaraguan forces and demonstrate Nicaragua’s aggressive nature,” forcing the Sandinistas to “clamp down on civil liberties.....arresting its opposition, (and) demonstrate its allegedly inherent totalitarian nature.”
In other words, if they were not totalitarian enough to begin with, we would see to it that they became totalitarian – and then blame them for making the switch.
President Reagan offered several different justifications for this ultimately rather bloody-minded policy. In March 1983, in a speech to Congress, he presented his subversion theory, Congress, warning that the Sandinistas had already “imposed a new dictatorship…supported by weapons and military resources provided by the Communist bloc, (that) represses its own people, refuses to make peace, and sponsors a guerrilla war against El Salvador. (emphasis added).”
At other times, he emphasized the beachhead theory, according to which the Sandinistas provided a “Soviet beachhead… only two hours flying time away from our borders…with thousands of Cuban advisors…camped on our own doorstep…close to vital sea-lanes.” He offered similar characterizations of the threat posed by left-wing guerillas in El Salvador, Honduras, and Guatemala. In 1982, Jeane Kirkpatrick, Reagan's hawkish UN Ambassador, also promoted this beachhead theory with her own profound geographical analysis:
I believe this area is colossally important to the US national interest. I think we are dealing here not...with some sort of remote problem in some far-flung part of the world. We are dealing with our own border when we talk about the Caribbean and Central America and we are dealing with our own vital national interest.
Other elements were also sometimes thrown into the mix. On November 6, 1984, just two days after the Sandinistas won a decisive 67-percent victory in the country’s freest elections in history, there was a huge media flap in the US press over their alleged attempt – later proved false – to buy Soviet MiGs for air defense. This story later turned out to be a wholesale concoction of the State Department’s “Office of Public Diplomacy,” and of Oliver North, Otto Reich, and Robert McFarlane in particular, just one of many US propaganda efforts that were designed to distract attention from the FSLN’s victory in those elections.
Together, the subversion theory and the beachhead theory added up to a revival of the time-worn domino theory, transposed from Southeast Asia to Central America. Apparently, the notion was that since Nicaragua bordered on Honduras and El Salvador, which bordered on Guatemala and Belize, which bordered on Mexico, the Red Army might soon be drinking margaritas on the banks of the Rio Grande. Or the Reds might just jet in to El Paso in their MiGs from Managua, “only two hours away.” The fact that “they” were already 90 miles away in Havana, armed with brand new MiG 23 Flogger bombers and MiG 29s, did not get much mention from the Gipper. After all, Cuba had already demonstrated that it could stand up to a US invasion, and the Bay of Pigs was not a happy memory.
This rather strained analysis of Nicaragua’s purported threat to US national security was later endorsed, with only slight variations, by the January 1984 Bipartisan National Commission on Central America chaired by Dr. Henry Kissinger. One might have expected Kissinger to reach a different conclusion, given his long personal experience with Vietnam, Laos, Cambodia, and China, whose leftist regimes spent most of the 1970s fighting with each other, demonstrating conclusively the power of nationalism over solidarity. But he was performing the assignment to ingratiate himself with the Republican Party’s conservative wing. And unlike the National Commission on Terrorist Attacks, which he resigned from in December 2002, it did not require him to identify his consulting firms’ private clients.
In any case, well into the 1990s, long after there were peace settlements in Nicaragua, El Salvador, and Guatemala, and long after the Sandinistas had handed over political power to their opponents, hawkish Republicans like Senators John McCain and Jesse Helms were still seeing ghosts in Nicaragua, trying to make hay out of the Sandinistas’ potential subversive threat. Indeed, as we’ll see, these charges even played a role in Daniel Ortega’s defeat in Nicaragua’s Presidential elections in 2001, even when his running mate was Violeta Chamorro’s son-in-law!
AUC paramilitary
Eventually, in fact, all the stockpiles of AK47s, landmines, rocket launchers, and surface-to-air missiles acquired by the Sandinistas to defend Nicaragua against the contras did end up posing a security threat to the US. But it was not precisely the one that that the Sandinistas' right-wing critics had predicted. In November 2001, Colombia’s 11,000-strong nasty, right-wing, drug-dealing paramilitary group, the AUC, procured 3,500 AK47’s from Nicaragua’s military stockpiles, by way of Israeli arms merchants based in Panama and Guatemala. The arms were part of a five-shipment package that included 13,000 assault rifles, millions of bullets, grenade and rocket launchers, machine guns, and explosives. The AUC, which was on the G.W. Bush’s administration’s official list of terrorist groups, was supported by landlords who wanted to combat Colombia’s leftist guerillas, the ELN and the FARC. The AUC was also supposedly fighting Colombia’s Army. From 2000 to 2003, Colombia received $2.5 billion of US military aid, plus more than 400 Special Forces troops, making it the world’s third largest recipient of US aid. The AUC also reportedly purchased arms from army stockpiles in El Salvador and Guatemala. In 2002, a OAS study also revealed that a Lebanese arms broker with al Qaeda links had tried to purchase 20 SA-7 missiles from Nicaragua’s stockpiles. The US starting pressuring Nicaragua’s President Bolanõs, a neoliberal businessman, to reduce these stockpiles – but hopefully not by selling more of them to the AUC.
In the long run, therefore, by forcing the comparatively-harmless Sandinistas to stockpile all these weapons to defend themselves, and by also arming the right-wing militaries of El Salvador and Guatemala to the teeth, the US had set a trap for itself.
In reality, of course, Nicaragua’s leftists, even if they had been so inclined, were neither necessary nor sufficient to “subvert” their neighbors. Those neighbors with the most serious liberation movements, like El Salvador, Guatemala, and Colombia, had long since done a perfectly good job of subverting themselves. Their rebel movements developed over many decades from within, on the basis of incredibly-unbalanced social structures. For example, El Salvador’s catorce, its top 14 families, controlled 90-95 percent of that country’s land and finance capital, while in Guatemala, just 2 percent of the population controlled more than 70 percent of arable land. These situations were only a slightly more anonymous version of Nicaragua, where the Somoza family alone had laid claim to a quarter of the country’s arable land. And the resulting social conflicts were similar -- in the 1980s, El Salvador’s class war claimed more than 80,000 lives, while Guatemala’s claimed 200,000, with the vast majority due to their own brutal armed forces and paramilitaries.
On the other hand, Costa Rica, Nicaragua’s good neighbor to the south, had long since inoculated itself against revolution by developing an old-fashioned middle-class democracy, with lots of small farms and more teachers than police, having completely abolished its military in 1948.
Furthermore, while the Reagan Administration asserted over and over again in the early 1980s that the Sandinistas had shipped arms to leftist guerillas in El Salvador, two decades later, these allegations have been shown to be as spurious as the MiG purchases. In fact, the Sandinistas’ aid to El Salvador’s rebels, the FLMN, was miniscule, and it was terminated in 1981, as the World Court concluded in 1986. The claim that El Salvador’s FLMN had acquired several hundred tons of weapons from the East Bloc, Arafat and Libya (!), had also been pulled out of thin air. In fact, the rebel armies in El Salvador and Guatemala were poorly armed, except for Galil rifles and rocket launchers they managed to steal or purchase from corrupt army officers. Leading Sandinistas like Tomas Borge also explicitly rejected the notion of “exporting revolution,” except by way of the FSLN’s own example. After all, the FSLN had not needed Soviet or Cuban backing for their own revolution. They also had their hands full rebuilding Nicaragua. The last thing they needed was another war with El Salvador or Guatemala, in addition to the contra war.
Finally, while the Sandinistas were not liberal democrats, and, as noted, committed many political blunders, they were scarcely in a position to run a “dictatorship,” even within Managua’s city limits. To their credit, they had greatly increased the amount of popular involvement in the country’s governance. In November 1984, they held national elections that most international observers, including Latin American scholars and Western European parliaments, agreed were reasonably clean, despite the Reagan Administration’s provision of $17 million to opposition candidates, its systematic efforts to discredit the elections, and the fact that by then Nicaragua was already under steady assault from US-backed contras. Certainly by comparison with the Somozas’ rigged elections, other countries in post-war situations, and El Salvador and Guatemala in particular, Nicaragua’s degree of political freedom was tolerable, if not beyond reproach.
Yet when 75 percent of registered voters turned out for the November 1984 elections, and the FSLN received a commanding 67 percent of the vote, capturing the Presidency and 61 of 96 seats in the new National Assembly, Nicaragua was again accused by the Reaganites of being a “dictatorship.” As former New York Times Editor John Oakes remarked at the time, “The most fraudulent thing about the Nicaraguan election was the part the Reagan Administration played in it.”
The other troubling fact for Reagan’s Nicaraguan policy was that, objectively, the Soviet Union really did not have much interest in acquiring yet another dependent, state-socialist backwater like Vietnam, Afghanistan, or Cuba -- which by the early 1980s was already costing the USSR about $3 billion a year in aid. In hindsight, we now know that, far from being an expansionist Evil Empire, at this point, the USSR was really just hanging on for dear life -- a wounded giant, obsessed with its own serious economic problems, which were even forcing it to import grain from Argentina’s fascist junta! Internationally, it had its hands full just trying to stave off an embarrassing defeat in Afghanistan on its own southern border. It was also pressing existing client states in Eastern Europe and Southeast Asia hard to practice self-reliance.
Finally, in 1980-81, before the US made it absolutely clear that it was seeking “regime change” in Nicaragua, the Sandinistas tried to restore good economic relations, plus access to World Bank and IDB loans. But for the US intervention, this access would have been maintained. And that, in turn, would have significantly reduced Nicaragua’s dependence on East-Bloc aid. After all, as a senior World Bank official noted in 1982, “Project implementation has been extraordinarily successful in Nicaragua, perhaps better than anywhere else in the world.”
About that time, Nicaragua also sought aid from many non-Soviet countries, including Venezuela, Mexico, and France. It was most successful with Mexico, which resisted US pressure and became Nicaragua’s largest aid provider until 1985. Nor did Nicaragua turn immediately to the Soviet Bloc for aid. When it tried to buy $16 million of arms from France in early 1982, however, President Reagan got the French President, Francois Mitterand, to delay the sale “indefinitely.” Only then – under increasing attack from the contras -- did Nicaragua turn to the Soviet Union and Cuba for significant quantities of arms and advisors.
Of course, as noted, many Sandinistas were undoubtedly committed radicals, dedicated to policies like land reform, free health and education, and the seizure of Somocista-owned properties. But these policies were entirely defensible, given Nicaragua’s economic conditions and its need to play catch-up with basic social justice. These are, after all, policies that the US has itself supported, or at least tolerated, in other times and places, when they happened to serve its interests.
The Sandinistas may have been mulish and full of radical bravado, but they were far from anyone’s pawns. These characterizations were 1950-vintage hobgoblins, left over from the days when Ronnie ran the Commies out of the Actors Guild in LA. At best, they reflected a desire to show the Evil Empire who was boss, by making an example of some weak little pinko regime.
On this view, then, in the early 1980s, the USG basically succeeded in pushing tiny Nicaragua into relying heavily on Soviet and Cuban arms and economic aid for its own survival– as, indeed, the USG may have also done with Fidel’s Cuba back in 1959-60. The USG then used that reliance as an excuse to expand its own provocations into a full-scale war that ultimately claimed 30,000 lives. In the historical record books, this is surely one of the clearest examples of state-funded terrorism ever.
SAYING "UNCLE"?
All these inconvenient little details were brushed aside by the Reaganites when they took office in January 1981, raring, in President Reagan’s words, to make the Sandinistas “say uncle.” Say uncle they never did -- in fact, by 1988, they’d “whupped” Olly North’s contras pretty good. But that was not for want of US efforts.
In March 1981, President Reagan signed an Executive Order that mandated the CIA to undertake covert operations in Central America, to interdict arms shipments “by Marxist guerillas.” By November 1981, the US focus had shifted from arms interdiction to regime change. That month, the Administration provided an initial $19 million to mount a pretty transparent “covert” effort to destabilize Nicaragua. The strategy, implemented by the now-famous gang of Presidential pardonees, was the classic scissors tactic that had been employed by the US and its allies in many other 20th century counterrevolutionary interventions, notably Russia (1918), Guatemala (1954), Cuba (1959-60), and Chile(1973).
On the one hand, the USG tried to cut off Nicaragua’s cash flow, reducing access to new loans from the IMF, the World Bank, and the IDB, as well as all EXIM Bank funding and OPIC risk insurance. In September 1983, the US slashed Nicaragua’s sugar quota. In November 1985, it added a total embargo on all trade with the US, Nicaragua’s main trading partner and foreign investor up to then. Given the country’s dire economic straits, this had the practical effect of cutting off all US private investment and bank lending.
At the same time, the Reagan Administration was stubbornly opposing all efforts to embargo trade or investment with respect to South Africa’s racist apartheid regime. In September 1983, for example, the State Department approved a Westinghouse application to bid on a $50 million ten-year contract to maintain and supply South Africa's two nuclear power stations. The US also continued to support World Bank and IDB loans to the right-wing regimes in Guatemala and El Salvador throughout the 1980s.
The other half of the scissors strategy was the USG’s effort to create, finance, arm, and determine strategy and tactics for an 18,000-person contra army, financed with $300 million of taxpayer money, in-kind military assistance, another $100-$200 million raised from private donors like the Sultan of Brunei, and an untold amount of cocaine proceeds. The main faction, the Frente Democrático Nacional (FDN), consisted of 3,000 ex-Somocista National Guard members and another 12-13,000 assorted mercenaries, anti-Castro Cubans, Israeli trainers, Argentine interrogators, and cocaine traffickers of several different nationalities. The Reaganites knew they were not dealing with angels here. As the CIA’s Inspector General later admitted in 1998, the agency made sure to get a statement from the US Department of Justice in 1982, waiving the CIA’s duty to report drug trafficking by any contra contractors.
From 1982 to 1989, this murderous scalawag army stoked a war that ultimately took about 30,000 lives, including those of 3,346 children and more than 250 public school teachers. Another 30,000 people were wounded, and 11,000 were kidnapped, according to the National Commission for the Protection and Promotion of Human Rights. Another half million fled the country to avoid the chaos. With the help of Harvard Law School Professor Abram Chayes, Nicaragua later successfully sued the US for launching these and other terrorist attacks and causing all this damage. In November 1986, the International Court at the Hague found the US liable for several clear violations of international law – notably, for launching an unprovoked war that was not justified by any “right of self defense.” The Court suggested that appropriate damages for the resulting property damage were on the order of $17 billion. But the Reagan Administration declined to appear in court, and refused to recognize the judgment.
THE WORLD'S HEAVIEST DEBT BURDEN
The detailed history of Nicaragua’s contra war has been told elsewhere, at least those parts of it that are not still classified, like much of the record of US knowledge about the contras’ extensive cocaine trafficking activities, and President Reagan’s confidential discussions with his aides, kept off limits for an indefinite period by a Executive Order signed in 2001 by President G.W. Bush.
Our main interest here is in the war’s devastating impact on Nicaragua’s economy and its crushing foreign debt burden. Ultimately, the FSLN soundly defeated the contras with a combination of adroit military tactics – for example, heavily-mined “free-fire” zones along its northern border with Honduras – and a large standing army, raised by draft. To pay for all this, however, the FSLN had to boost military spending, from 5 percent of national income in 1980 to 18 percent in 1988, when the first in a series of armistices was finally signed. By then, more than half of Nicaragua’s government budget was devoted to paying for an army that numbered 119,000 regular soldiers and militia – 7 percent of all Nicaraguans between the ages of 18 and 65.
Early on, the Sandinistas had made a strong commitment to building new health clinics and schools in the county. These social programs, plus land reform, were among their most important accomplishments. Even in the midst of the war, with the help of 2500 Cuban doctors, they managed to increase spending on health and education, open hundreds of new medical clinics, and sharply reduce infant mortality, malnutrition, disease, and illiteracy. They also implemented a land reform that redistributed more than 49 percent of Nicaragua’s arable land to small farmers.
But the war made it very hard to sustain these undeniable social accomplishments Despite the FSLN’s military “victory,” Nicaragua’s regular economy took a direct hit. Trade and investment plummeted, unemployment soared to 25 percent, and inflation reached more than 36,000 percent by 1988-89. From 1980 to 1990, Nicaragua’s average real per capita income fell 35 percent, and the incidence of poverty rose to 44 percent. To deal with shortages in the face of soaring inflation, the FSLN had to implement a rationing system for food and other basic commodities. As the Nixon Administration had done to the Allende regime in Chile a decade earlier, so the Reaganites did to Nicaragua – they made the economy “scream.”
All told, by 1990, Nicaragua had displaced Honduras as the poorest country in Central America. It had also become the world’s most heavily indebted country. To fund the defense budget and their other commitments in the face of declining tax revenues, trade, investment, and multilateral funding, the FSLN partly relied on inflationary finance, by having the Central Bank just print more cordobas. But for vital foreign purchases, including oil and weapons, it required dollar loans from sympathetic countries, mainly the Soviet Union ($3.3 billion), Mexico ($1.1 billion), Costa Rica, Germany, Spain, Venezuela, Brazil, and Guatemala (!), plus more than $500 million from the Central American Bank for Economic Integration, one multilateral institution that the US did not control.
When the newly-elected government of Violeta Barrios de Chamorro took office in April 1990, the debt stood at $10.74 billion – more than 10 times its level in 1980, and nearly 11 times Nicaragua’s national income.
This was by far the highest foreign debt burden in the world, thirty times the average debt-income ratio for all developing countries. And it was not derived from “technical policy errors,” “economic accidents,” or “geographic misfortune. ” Part of it was the $1.5 billion of dirty debt left over from the Somoza years. The rest derived from the ruthless persecution by world’s most powerful country of a tiny, stubborn Central American nation that was determined to finally make its own history.
CONCLUSION - REAGAN'S IMPACT ON NICARAGUA
In the 1980s, against all odds, and woefully ignorant of economics, politics, business, and diplomacy, a handful of rather foolhardy Nicaraguans dared to challenge the Reagan Administration's attempt to prevent them from controlling their own destiny.
They made many mistakes, and they required much on-the-job training. But at least they tried to stand up.
When they did so, they were attacked, and when they defended themselves, they were portrayed as the aggressors. Ultimately they won a victory of sorts, but it left their country a shambles.
Then their successors, worshipers of the latest fashions in neoliberal economic theology, came to power promising reform and freedom, and ended up turning the country into a bantustan.
Perhaps Nicaragua will need another revolution.
***
(c) James S. Henry, SubmergingMarkets.com(tm) 2004. Not for reproduction or other use without express consent from the author. All rights reserved.
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INTRODUCTION
Former President Reagan’s $10 million taxpayer-funded bicoastal funeral extravaganza is finally over, and we may at last be able to regain a little objectivity about the man’s true accomplishments. This really was an extraordinary Hollywood-scale production – one of Reagan’s best performances ever. Apparently the actor/President started planning it himself way back in 1981, shortly after he took office at the age of 69. Evidently he never expected to live to be 94.
For over a week we have been inundated with neoconservative hagiography from adoring Reagan fans -- one is almost reminded of Chairman Leonid Brezhnev's funeral in 1982. Even the final event’s non-partisan appeal was slightly undercut by the fact that only die-hard conservatives like President George W. Bush, former President George H. W. Bush, Margaret Thatcher, and Canada’s Brian Mulroney were invited to give eulogies. But at least this saved Democrats the embarrassment of having to say nice things about their fiercest, most popular, and most regressive antagonist of the 20th Century.
Some Bush campaign staff members reportedly recommended shipping the casket home from DC to California by train. Cynics suggested that this must have been intended to prolong the event and distract voters from Bush’s serious political difficulties. Thankfully Nancy Reagan spared us all this agonizing spectacle. She probably recognized that it would only invite unfavorable comparisons with FDR, whose family eschewed the state funeral in favor of the more humble train ride. Furthermore, AMTRAK no longer serves most of the towns along the way.
There has already been quite a bit of dissent from the many one-sided tributes to Reagan. Most of it has focused on domestic policy -- especially Reagan's very mixed track record on civil rights and the HIV/AIDs epidemic, his strong anti-union bias, the huge deficits created by his “supply-side” legerdemain, his deep cutbacks in welfare and education spending, and his weak leadership on conservation, the environment, consumer protection, and energy policy. Reagan’s hard-right bias on domestic policy certainly was underscored by the almost complete absence of blacks and other minorities among the ranks of ordinary Americans who lined up to mourn his passing.
With respect to foreign policy, the “Iran-Contra” arms scandal and Reagan’s support for apartheid were recalled by some observers. But most of the attention was directed to Reagan's supposedly uniformly positive contributions to the demise of the Soviet Union and the end of the Cold War.
In this article, the first of two in this series, we'll examine Reagan's foreign policy contributions more closely. The analysis has important implications not only for our assessment of Reagan, but also the White House's current incumbent.
DID RONNIE REALLY “WIN THE COLD WAR?”
We can debate this alleged role endlessly. Of course, like John Kennedy (“Ich bin ein Berliner”) Reagan made one very forceful speech in Berlin (“Tear down this wall, Mr. Gorbachev.”) Especially during his first term, he also supported policies that tried to roll back the Soviet Empire’s frontiers in distant places like Afghanistan, Angola, Nicaragua, and Grenada. He also expanded the US defense budget, accelerated the deployment of theater-nuclear missiles in Europe that had already been started by President Carter, and financed the (largely-nonproductive) first round of the “Star Wars” anti-missile program. All these moves no doubt increased pressure on the Soviets, and probably encouraged them to negotiate and reform.
However, Reagan was hardly responsible for the fact that the “Soviet Empire” had been more or less successfully “contained” almost everywhere except Cuba, Vietnam, and Afghanistan from the 1950s to the 1980s, and that even these client states had become more of a burden to the USSR than a blessing.
Nor was he responsible for the fact that President Carter had initiated anti-Soviet aid to the Poles and the Afghan rebels in the late 1970s; deployed the first long-range cruise and Pershing II missiles in Europe in December 1979, partly in response to the Soviets’ deployment of SS-20 missiles in Eastern Europe; suspended Senate consideration of the SALT II Treaty in January 1980; and issued Presidential Directive 59 in August 1980, adopting a new, much more aggressive “countervailing force” strategy for nuclear war.
Nor did Reagan have much to do with the fact that a whole new generation of Soviet leaders, including Mikhail Gorbachev, took power in 1984-85, or the fact that these new leaders chose the “glasnost/ big bang” route to reform rather than the more gradual and successful one that has kept the Chinese Communist Party in power to this day. This was also a matter largely of the Soviets' own choosing.
Nor was Reagan responsible for the fact that Gorbachev, who actually sought to preserve a stronger, reformed version of the Soviet Union rather than disband it, proved to be much less adept at Russian politics than Boris Yeltsin.
Even if we acknowledge that Reagan’s policies contributed to ending the Cold War, therefore, the historical record is very far from giving him “but for” credit for this happy ending.
In fact, even if "Cold War liberals" like Jimmie Carter and Fritz Mondale had presided over the US throughout the 1980s, the odds are that the very same key systemic and generational factors that helped to produce fundamental change in the Soviet system would have still applied – with very similar outcomes.
WHAT RISKS DID RON RUN?
In the literature on the economics of investment, it is well established that (at least in equilibrium, with competitive markets) there are no increased rewards without increased risk. When it comes to evaluating historical leaders, however, apparently this basic principle is often overlooked.
Reagan’s confrontational approach to the “Evil Empire” clearly was very distinctive. But this was hardly an unmixed blessing. Indeed, we now know that he took incredible risks in the early 1980s, and, as discussed below, that we are all extraordinarily lucky to have survived this period intact.
Furthermore, we are all still living with serious systemic risks that are a direct byproduct of Reagan’s high-risk strategies—even apart from the long-term legacy of his Afghan “freedom fighters” and latter-day terrorists.
Andropov
For example, only in the mid-1990s, after the USSR’s collapse, did we learn that the Soviet Politburo and top Soviet military planners really had become convinced in the early 1980s that Reagan had adopted a new pro-nuclear war-fighting strategy, changing from “mutually assured destruction” to the pursuit of an all-out victory.
Soviet leaders came to this conclusion partly because of several key developments in military technology and strategy.
- By the early 1980s the US had acquired a growing advantage in submarine-based nuclear weapons (D-5 Trident missiles, with greater accuracy and short flight times) and anti-submarine warfare techniques, as well as space-based communications, surveillance, and hunter-killer satellite capabilities.
- As noted, Carter and Reagan both started to deploy cruise and Pershing II missiles in Europe and on submarines. These were just 4-6 minutes from the Soviets’ command-and-control centers and many of their ICBM silos, which they counted on for up to two-thirds of their deterrent capability.
- In the early 1980s the US also took several steps that were apparently intended to increase its chances of surviving a nuclear war. These not only included “Star Wars,” but also hardened telecommunications, new command-and-control systems and some “civil defense” measures, and revised policies for “continuity in government.”
On top of these structural changes, the Reagan Adminstration’s aggressive rhetoric and behavior also contributed to this new Soviet view of US intentions.
In early 1981, for example, Reagan ordered the military to mount a still-highly-classified series of “psyops” that probed USSR airspace and naval boundaries with US and NATO jet fighters and bombers, submarines, and surface ships. The US and NATO also conducted several large-scale exercises in 1982-84. The US also sharply increased its assistance to “freedom fighters” like the Nicaraguan contras, the Afghan rebels, and Jonas Savimbi’s bloodthirsty South-Africa-assisted renegades in Angola.
As we now know, all this belligerent US activity scared the living daylights out of old-line Soviet leaders like Yury Andropov. It reminded them of Hitler’s sudden blitzkrieg attack on the Soviet Union in 1941, a searing experience for which Stalin had been surprisingly unprepared. They came to believe that the US was actually planning the nuclear equivalent of this blitzkrieg -- a first strike that would decapitate Soviet command-and-control while minimizing the effects of retaliation on the US. Of course Europe would be probably destroyed in such a confrontation. But the Soviets assumed, perhaps correctly, that the US saw “Old Europe” as dispensable.
In response to this perceived US threat, the Soviets did not roll over and play dead. Rather, drawing on their 1941 experience, their first response was to assume the worst and try to prepare for it.
- From May 1981 on, they ordered a worldwide intelligence alert, code-named “RYAN”, aimed at keeping the Politburo informed on a daily basis of US preparations for a first strike.
- The Soviets shifted their nuclear posture decisively to “launch-on-warning.” For the first time they also provided the Politburo with the ability to sidestep the Soviet General Staff and launch all strategic missiles with a central command. To support this shift, they also deployed new ground-based radar and space-based early-warning systems.
- Most striking of all, in the early 1980s the Soviets also implemented a full-scale nuclear “doomsday” system, code-named “Perimeter.” This system, first tested in November 1984, placed the power to unleash a devastating retaliatory strike against the US essentially on autopilot, whenever the system “sensed” that a nuclear strike against Moscow had either occurred, or was about to occur.
Together, all these shifts in Soviet defensive strategy cut the decision time available to their leaders, when deciding how to respond to a perceived US/ NATO attack, to as little as
3-4 minutes.
As Gorbachev later remarked,“Never, perhaps, in the postwar decades was the situation in the world as explosive and hence, more difficult and unfavorable, as in the first half of the 1980s.”
THE LEGACY
To our great distress, despite the mutual de-targeting that was announced with so much fanfare by Presidents Clinton and Yeltsin in 1994, both these Cold War “hair trigger” responses to Reagan’s initiatives are still in place today, responsible for controlling at least the 5000+ strategic nuclear warheads that Russia still maintains.
 |
Lt. Colonel Petrov had been forced to make a profound decision about world civilization in a matter of minutes, with alarms and red lights going off all around him.
|
These systems have already experienced several close calls. Among the incidents that we know about were those in
September 1983,
August 1984, and
January 1995. In this last incident,
President Yeltsin -- who was not always a picture of mental health and stability -- came within minutes of unleashing a full-scale nuclear retaliation in response to a false alarm set off by a Norwegian research missile that was sent aloft to study the Northern Lights. Apparently it bore a striking resemblance to an incoming Trident missile on Soviet radar until it crashed harmlessly in the sea.
The
September 1983 incident, at the height of Soviet tensions with the Reagan Administration, and just a few months after the huge anti-Soviet NATO exercise “
Able Archer” in Western Europe, was even more scary. In 2000,
Lt. Colonel Stanislov Petrov, the duty officer who had been in charge of an early-warning bunker south of Moscow at the time,
told Western journalists what happened when the new early-warning computers at his facility suddenly reported a full-scale US attack:
"I felt as if I'd been punched in my nervous system. There was a huge map of the States with a US base lit up, showing that the missiles had been launched. I didn't want to make a mistake…..I made a decision and that was it. In principle, a nuclear war could have broken out. The whole world could have been destroyed. After it was over, I drank half a liter of vodka as if it were only a glass and slept for 28 hours."
Ultimately it turned out that the new Soviet early-warning system had malfunctioned. Lt. Colonel Petrov had been forced to make a profound decision about world civilization in a matter of minutes, with alarms and red lights going off all around him.
Fortunately for all of us, he decided to not to believe his own computers.
Unfortunately for all of us, a modified version of that same hair-trigger early warning system is still in place in both Russia and the US to this day, since neither side has ever reverted to the pre-Reagan “MAD” strategy -- and Lt. Colonel Petrov has long since retired to a humble Moscow flat.
SUMMARY
From this vantage point, President Reagan’s long-term legacy is a little more difficult to evaluate, even with respect to his impact on the Cold War.
- Clearly he had a great deal of help from others, as well as from sheer fortuity.
- We are still living with the heightened risks in the world system that were partly created by the aggressive nuclear strategy adopted by President Reagan, and to some extent by President Carter before him. If Russia’s early warning systems and doomsday systems – both of which are now reportedly starved for maintenance funds -- should ever fail, history may not be so kind to Ronald Reagan, assuming that there is anyone left to write it.
- Much of Reagan’s vaunted “strength” was really based on a blithe combination of sheer ignorance, blind faith, and risk taking. Compared with President Nixon (who, like FDR, also eschewed a state funeral), Reagan knew almost nothing about world affairs other than what he read in The Readers Digest and (perhaps) The National Review.
- On the other hand, compared with the insecure Nixon, who was constantly seeking reassurance from his advisors, Reagan certainly did have much more faith in his own convictions. With respect to the Soviet Union’s nuclear strategy, like a determined child, he may have never fully appreciated the fact that he was playing with…well, er.., much more than dynamite.
After the fact, of course, like any high-stakes gambler who bets it all on “black,” spins the wheel, and wins, Reagan looks like a hero, at least to many Americans.
However, whether or not ordinary citizens of the world should look back on this track record and cheer, much less encourage our present and future leaders to adopt similar blind-faith strategies, is very doubtful.
Indeed, today, most of the rest of the world seems to regard President Reagan -- rather more accurately than many Americans -- as the friendly, fearless, perhaps well-meaning, but really quite reckless “cowboy” that he truly was.
***
(c) James S. Henry, SubmergingMarkets.com, 2003. Not for reproduction or other use without express consent from the author. All rights reserved.
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Yesterday the UN Security Council voted unanimously to approve a resolution with regard to Iraq. This action is already being positioned by Bush, Blair, and some journalists as a legitimation of the 160,000 Coalition forces in Iraq, and a sea change in the international community's attitude toward the war.
We need to examine this closely, to see whether it really is a turning point. Does it represent an important concession by the hard-pressed Bush Administration to important UN demands -- not so much because of the June 30 deadline, but because of the real deadline, November 2? Or was it just another example of the UN's inability to accomplish very much on this core international issue other than to "follow the US or get out of the way?"
Doesn't the UN resolution really amount to a kind of "appeasement" of Bush and Blair, a bizarre reward for having launched this illegal war without explicit UN authorization? What do the Kurds think of the UN resolution, which completely ignores their demand for autonomy? And where does it leave the hapless John Kerry, who now finds that one of his few policy suggestions for Iraq, the notion of getting the UN more involved, has been encapsulated by the President?
SOVEREIGNTY?
To begin with, the resolution endorses President Bush's June 30th deadline for the transfer of "full responsibility and authority"to the "sovereign" Interim Government of Iraq.
The UN resolution also notes that on June 30, control over accumulated profits from oil sales and the UN's "oil for food" program will be transferred to the interim Iraqi government. Of course, given the high costs of security and recent constraints on production and exports, oil profits have been relatively modest. As for the UN oil for food program, it is almost extinct, with key former administrators under investigation for corruption. For the foreseeable future, therefore, the interim Iraqi Government is likely to remain heavily dependent on aid from the US Government, which is still sitting on more than $18 billion that was supposed to have been spent on infrastructure, and on relief from Iraq's $130 billion foreign debt.
Furthermore, the new "sovereign" government is also instructed to "refrain from taking any actions affecting Iraq's destiny beyond its interim period of governance."
Presumably this rules out privatizing oil assets. One hopes that it doesn't also prevent the interim government from challenging US plans to build 14 new military bases all over the country, or from revising the extraordinary neoliberal provisions in the country's new laws on investment, trade, privatization, and taxes.
These were drafted by Paul Bremer's staff (including McKinsey veteran and Greenwich-based venture capitalist Tom Foley) and adopted by the Iraqi Governing Council and the CPA without any significant debate. They include some of the most extreme "free market" provisions in the developing world -- 2 percent import duties, wide open capital markets, and a maximum 15 percent income tax rate. Russia, which already tried an experiment with such measures in the early 1990s, should volunteer to give the new interim Iraqi government some free advice about the effects of such measures.
AN END TO OCCUPATION?
The UN resolution also declares the "end of the occupation" and the authority of the US-led Coalition Provisional Authority as of June 30th. On the other hand, it also recognizes the mandate of the "multinational force" (MNF) currently in Iraq at the request of the interim Government (sic)" to "take all necessary measures to contribute to the maintenance of security and stability."
In exercising this broad mandate, the MNF is requested to "work in partnership" with the new "sovereign" Iraqi Government. The request from France and Spain that the MNF report to the Iraqis was turned down.
Nor is there any attempt to create a UN peacekeeping force, other than a "small" (4,000 person!) force to protect UN workers themselves. (How many UN workers will there be, exactly?) Apart from the US and the UK, none of the other Security Council members are yet prepared to commit their own troops to joining the MNF in this adventure -- despite their newfound enthusiasm for Bush's plans.
The UN promises to review this MNF mandate in one year. It also assures us that if the Iraqi Government wants the UN to terminate the MNF's mandate to be in Iraq, it only has to ask. Of course the US will then promptly withdraw all its troops from Iraq, because, after all, we only invaded the country....with....uh...firm...uh...UN...authorization?
That kind of request might conceivably occur under some hypothetical future Iraqi government. But the UN knows full well that at the moment, this "right to demand withdrawal" business is pure cosmetics -- the Tigris- Euphrates will freeze in summertime and all looters will leave Baghdad before such a request is made by the interim government of Prime Minister Iyad Allawi.
This rising star and secular Shiite was not a London brain surgeon for nothing. He is also a leading Chalabi rival, Iraqi National Accord leader, and early Baath Party member who was hand-picked by the now-defunct Iraqi Governing Council, with Paul Bremer's backing.
Allawi, who is reported to have spied for the Baathist Party in London before he turned against Saddam in the 1980s, has a long history of cooperation with US and UK intelligence agencies, as well as with disgruntled senior Iraqi Army officers. Allawi has become the agencies' preferred alternative to Chalabi -- a talented administrator who represents "the acceptable face" of Baathism, and has none of Chalabi's weird connections with the Iranians, busted Jordanian banks, or the insufferable Richard N. Perle.
It is far too early to say whether or not Allawi will be able to leverage his "transitional" role into a more permanent one, or even live to see the fall, but he and his numerous relatives -- some of whom are married to Chalabi's relatives -- are more likely to ask for increased MNF troops than to ask them to withdraw.
The UN resolution does recognize that Iraqi security forces will, at least technically, report to the Iraqi Government rather than to the MNF. This provision may help Allawi restore more control to his friends in the Iraqi Army. But since they will continue to derive most of their payroll, training, arms and ammunition from the Coalition for the foreseeable future, it is unclear how much practical difference this really makes.
Unless the MNF is booted out by a successor Iraqi Government, according to the UN resolution, its mandate is scheduled to expire "on completion of the political process outlined above." Optimists may read this to mean "by December 31, 2005." But that assumes that this "process" will stay on track. We have all seen in the last 14 months just how accurate such forecasts have been with respect to Iraqi politics -- for example, the abortive effort to "write a constitution by March 2004." Bearing this in mind, the UN resolution was careful not to specify an explicit date for MNF withdrawal.
THE ROAD TO DEMOCRACY?
The UN resolution also endorses a rather convoluted timetable for the creation of representative government in Iraq -- the broad contours of which can only be described as "Floridian," in terms of the efforts being made to control the exercise of democratic choice as much as possible, even while making loud noises in favor of it.
- The process begins with a "national conference reflecting the diversity of Iraqi society." How a conference can do that without being democratically elected is a puzzle that evidently the UN has solved, since it will help to organize and convene this conference in July 2004.
That conference, in turn, will select a "Consultative Council" of 100 members, which will "advise" the Interim Government and have "veto power over its orders." Precisely how this Council, which has just been added to the stew, will exercise this potentially very important power over Allawi and his team, is unclear -- remember, folks, we are making this up as we go along.
- With the UN's help and the Consultative Council's "advice," the Interim Government will then hold "direct democratic" elections for a "Transitional National Assembly" by the end of 2004, or January 31, 2005 at the latest. This is the UN, remember; one-month variations in schedules fall like raindrops from the sky.
- This Transitional National Assembly, in turn, will establish a "Transitional National Government," which would take charge of drafting a "permanent constitution."
Presumably the Consultative Council will by then have faded away, along with the interim Iraqi government and the Iraqi Governing Council before it. Iraq may be setting something of a record here for prophylactic appointed governmental bodies, designed to sharply slow the rate of descent to that point where ordinary people actually get to vote. (The so-called "non-Florida point.")
- Finally, on the basis of the yet-to-be drafted constitution, a "constitutionally-elected government" will finally be elected by the Iraqi people themselves by December 31, 2005. Or perhaps by January 31, 2006; who knows?
What are ordinary Iraqis likely to make of this "timetable?"
First, they've already had more than 14 months of "interim" rule by people who were basically appointed by foreigners, and many of them evidently have some very strong opinions about the results.
Now they are being told that they will basically continue to be governed by recycled ex-Baathist exiles and military men, also chosen by foreigners, for at least another seven months.
Furthermore, these appointees will also now be in charge of the Iraqi military. In a country where government is commonly viewed, with strong historical justification, as a private fiefdom that is populated by a gang of thieves, this is unlikely to encourage people to believe in the UN's roadmap.
Finally, they are also being told that even when they do finally get to vote for the first time, by say January 2005, they will only be electing yet another "transitional" government, on the way to a constitutional convention and yet another new government the following year.
In this regard, the Iraqi Kurds, in particular, have enormous reasons for concern. Their demands for a loose federation and a great deal of autonomy, which were recognized in the draft March 2004 constitution, were not mentioned at all by the UN. Apparently they face the prospect of having to start over from scratch, without nearly as much leverage and high level support as they had before. Already key Kurdish members of the interim Iraqi Government have threatened to resign over this issue.
In short, even if everything goes according to plan, this political timetable requires ordinary Iraqis -- many of whom are still unemployed, and most of whom are already incredibly angry at how the US has mismanaged Saddam's overthrow -- to have extraordinary patience and to suspend an extraordinary amount of disbelief.
But we've already seen how difficult it was to achieve agreement on an overall national constitution this year. My humble conjecture is that that difficulty was not due to a shortage of UN advice, consultative councils, or Security Council resolutions.
Rather, it reflects very real, deep-seated divisions of views, interests, ideology, and affiliations within Iraqi society.
These divisions may never be overcome, or they might be overcome by a bold experiment in de-occupation, liberation, local autonomy, and democratization. But they are unlikely to be overcome by the slow-motion, controlled kind of pseudo-democratization that the UN, in its wisdom, has just endorsed.
We should not really be surprised, therefore, if the roadmap just outlined produces even greater resistance and discord, rather than peace and quiet.
REWARDING AGGRESSION?
Beyond the impacts of the UN resolution within Iraq, the other key risk is that it constitutes appeasement. In effect, rather than being sanctioned by the UN for starting this preemptive war on false grounds in clear violation of international law, the US and the UK are now to some extent being let off the hook. And Bush and Blair, in particular, who are both fighting for their political lives, will undoubtedly be helped by the perception that their policy has at last been embraced by the UN.
Of course UN members can argue that they had little choice from the standpoint of helping the Iraqi people, and that the new resolution says nothing about the "original sin" that may have been committed.
This will be cold comfort to Bush opponents like John Kerry, who had made UN and Nato involvement in Iraq a key pillar of his approach to the war. At this point, armed with the UN's blessing, it is no longer clear how Kerry's position differs at all from the President's.
More important, by swallowing whole so much of the Bush/Blair program for Iraq, caving in on UN representative Brahimi's preferences for key appointments in the interim Iraqi government, and effectively sanctioning the continuation of the occupation until the country achieves political nirvana (or forever - whichever comes first), the UN may have reduced its own influence even further, and cleared the way for more such adventures.
SUMMARY
After more than a year of grossly mismanaging Iraq's transition to democracy, and more than eight decades of pushing the country toward autocracy, the reluctance of today's "Great Powers" to put an end to this custodial occupation and proceed more expeditiously with a bold experiment in "ASAP" local democracy is discouraging.
Between the lines, this measure has really sanctioned the continuation of an open-ended military occupation, alienated key constituents like the Kurds, undermined the opponents of the war, and rewarded serial violators of international law.
Yet to our senior leaders, and, indeed, many journalists, victory, suitably redefined, is once more just around the corner.
Of course we never found those WMDs or the links to al-Qaeda, we were not welcomed as liberators, and a majority of Iraqis now want us to leave the way we came in --quickly. But the theory is that now, with the UN solidly in our corner, and more and more troops on the ground (perhaps including some from NATO), we really will be able to (1) stabilize the country; (2) hold more or less free elections; (3) make sure that the winners are friendly moderates; (4) hang on to our precious military bases; and of course (5) minimize US casualties.
Over the next few months, I fear that a great many more lives will be wasted as we wait once again to find out whether or not this latest untested neoimperialist prophesy is true.
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(c) James S. Henry, SubmergingMarkets.com, 2003. Not for reproduction or other use without express consent from the author. All rights reserved.
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This weekend President Bush was in Europe,
celebrating the 60th anniversary of D-Day. He was joined by thousands of American, British, Canadian, and French veterans of World War II, members of the so-called
“Greatest Generation,” as well as the
Queen, the UK’s Tony Blair, France’s Jacque Chirac, Russia’s Vladimir Putin, and Germany’s Gerhard Schroeder, all of whom converged on Normandy for
commemoration ceremonies. As Schroeder
duly noted, the fact that all the leaders of these former allies and enemies could finally come together to celebrate D-Day for the first time means that “the post-war period is finally over.”
Many other US leaders, from Donald Rumsfeld and Dick Cheney to John McCain and John Kerry, have also recently tried to associate themselves with the valor and sacrifices of American veterans in our increasingly long list of foreign wars. Their tributes have been similar, whether the veterans in question fought in wars that were short or long, one-sided or evenly matched, just or unjust -- and whether or not the politicians in question have ever spent even a single minute on an actual battlefield.
This year, such martial rhetoric is flying thicker than usual because of the coincidence of several events. In late April, the long-awaited $190 million memorial to America’s World War II veterans was finally unveiled in Washington DC. Its architectural reviews have been decidedly mixed, especially by comparison with the beautifully-understated Vietnam War memorial. But this certainly is a long-overdue tribute to the 16.4 million Americans who served in that objectively “good” war and the 405,000 who lost their lives in it.
We are also in the middle of an unusual US Presidential election race, which is proceeding while the country fights two wars at once – the war in Iraq and the less visible, potentially much more dangerous “war on terror.” Both key Presidential candidates are vying hard to be viewed as stalwart defenders of national security and close friends of the veterans community.
Indeed, the whole period from Memorial Day to July 4th has become a high season for veteran commemorations and martial romanticism. Those who happen to part of the majority of Americans who are neither veterans nor members of the “Greatest Generation” may feel a bit uncomfortable – sort of like non-Christians at Christmas.
I don’t happen to share this discomfort. To begin with, my family has done more than its share of fighting for the nation since it arrived in Virginia in the 1620s. We’ve volunteered for almost every single “good” American war in history, from the Revolutionary War and the War of 1812 to the Civil War, World War I, World War II, and the Korea War. As for the “Greatest Generation,” we also supplied several authentic members, including my father, a World War II veteran who served four years with the Navy in the South Pacific, and my uncle, one of General Patton’s tank commanders who helped to liberate the Buchenwald concentration camp.
It is also not the fault of subsequent generations that almost all the wars that the US has chosen to fight since the Korean War in the early 1950s have been one-sided affairs, undertaken against more or less defenseless Third World countries like Vietnam, Cuba, Nicaragua, Granada, Panama, Afghanistan, and Iraq. Except for Afghanistan, where the Taliban allowed al-Qaeda to build training camps, none of these countries ever attacked us or our allies, posed a serious direct threat to our national security, or even had air forces or navies, much less nuclear weapons.
These wars were basically neo-imperialist adventures in gunboat diplomacy. Not surprisingly, most of them proved to be vastly more lethal to the hapless natives than to US troops. For example, while the US lost 58,226 killed and 2300 missing in Vietnam, the Vietnamese lost an estimated 1 million combatants killed, 4 million killed and 200,000 missing in action, most of them to our relentless bombing campaigns.
Furthermore, while those American veterans who have served in genuinely defensive wars certainly deserve to be honored, our political leaders do no service by oversimplifying their contributions. As the history of Germany indicates, excessive militarism and the idealization of martial values like “honor, duty, and blind obedience to one’s superiors” may help to encourage still more aggressive wars, which creates more veterans, which creates more glorification, which encourages still more wars…..
So, in the interests of reversing this venomous cycle, we offer the following critique of “Greatest Generation” mythology -- and also pay homage to other members of the Greatest Generation whose contributions have largely been forgotten.
REALITY CHECKS
The conventional image that most Americans seem to have of the US role in World War II is that we – or, at most, the US and the UK – basically won the war.
In this view, fed by sixty years of Hollywood films, poltical rhetoric, jingoistic reportage in the mass media, and bad history courses, the vast majority of the “Greatest Generation” supposedly volunteered courageously to fight against the Axis Powers. The US military supposedly played a decisive role in defeating not only Japan but also Nazi Germany and Italy, and the Normandy invasion was supposedly critical to the German defeat.
Unfortunately, it was not quite that simple.
>Draftee Predominance. To begin with, of the 16.4 million US veterans who served in World War II, only about a third were volunteers. The rest were drafted. Even in this “best of all possible wars,” therefore, where the lines between good and evil could not possibly have been any clearer, compulsion, not volunteerism, was the main motor force. In fact, volunteerism was even less in evidence during World War II than it was during the Vietnam War. Just a quarter of the 2.6 million Americans who served in the Vietnam War from 1965 to 1973 were draftees – notwithstanding the role that the draft played in stimulating opposition to that war.
>Casualties. On D-Day, June 6, 1944, the US suffered a grand total of 6603 casualties, including about 2000 killed in action or missing. Our other non-Soviet Allies added another 3646 casualties. All told, that first day, there were about 3000 killedamong all the Allies. For the entire Battle of Normandy, the US suffered 126,847 casualties, including about 30,000 killed, and the UK and other non-Soviet allies added 83,045 casualties.
For World War II as a whole, as noted, the US suffered 405,000 American deaths. About 290,000 of these were due to combat, the rest to accidents and disease.
These were impressive losses by comparison with other American wars. Only the Civil War recorded a larger number of total fatalities, but those included a huge number who died from disease. World War II's combat fatalities was the largest for any US war.
Despite these records, the fact is that all these US and non-Soviet Allied casualty statistics pale by comparison with those suffered by our key Ally on the Eastern Front, the Soviet Union.
All told, the USSR lost 8.7 million to 11 million troops killed in combat against Germany, Italy, Rumania, and the other Axis coalition members from 1941 to 1945. This included 500,000 troops killed at the Battle of Stalingrad alone from September 1942 – January 1943. There were also 440,000 Soviet troops killed at the Siege of Leningrad from 1941 to 1944, 250,000 at the decisive Battle of Kursk in June 1943, and 450,000 on the march to Berlin in 1945.
In addition, there were also another 12-18 million civilian casualties in the Soviet Union during World War II, compared with the 60,000 civilian casualties that the British lost to Germany air raids, and negligible US civilian casualties.
>Strategic Role – Germany. Most important, far from playing a decisive role in defeating Hitler, the fact is that the D-Day invasion came so late in the war that even if it had been turned back by Hitler, the chances are that this would have only delayed the Soviet advances into Berlin by six months to a year at most, without fundamentally affecting the outcome of the war.
The Soviets had been lobbying hard for a D-Day invasion from 1942 on, but were resisted by Churchill, in particular, who favored a "southern" strategy through Italy and the Balkans -- and had been a lifelong hardline anti-Communist.
During the 1944 Normandy invasion and the Battle of France, the key battles involved, at most, about 15 Allied and 15 Germany divisions.
On the Eastern Front, by comparison, from 1941-44 more than 400 Germany and Soviet divisions battled each other along a 1000-mile front, and the Soviets succeeded in destroying more than 600 Germany divisions. (Overy, Why the Allies Won, 321).
Even as the Normandy Invasion was proceeding, the much larger Soviet Army was driving towards Berlin, destroying Germany’s main army group and costing the Axis powers nearly 4 million casualties.
Without this Soviet effort on the Eastern Front, therefore, the Normandy invasion could not have succeeded, and Hitler would probably have prevailed. Combined with the successful invasion of Normandy, by the time it came, the main effect was to shorten the war a bit in Europe.
Nor did the “Lend-Lease” aid provided to the Soviet Union by the US and the UK during the war prove decisive. Much more important was the fact that Soviet industry, relocated to the east, was able to out-produce Germany several times over in aircraft, tanks, and artillery pieces throughout the war.
Despite all this, the commemoration speeches given this weekend by Western leaders failed to even mention the Soviet contribution to the war effort. .
>Strategic Performance – Japan. As for the war with Japan, it has long been recognized by military historians that it was distinctly less important than the war with Germany. Without the victory over Germany, the victory over Japan would have been impossible; with it, given Japan’s relative weakness, V-J Day was basically just a matter of time. Consistent with this, the war with Japan only consumed about 15 percent of the total US war effort.
After Germany’s demise in April 1945, the US, with some belated help from the Soviet Union, turned its attention to Japan, and quickly swept it out of China and the Pacific. By August 1945, when the US dropped its two atomic bombs, the Japanese were already on the verge of surrender. As Gar Alperowitz, the leading historian of Truman’s decision to drop the bomb, has argued, that decision was largely undertaken to impress Stalin, not because of military necessity or to save American lives.
IMPLICATIONS
All this is not to say that American World War II veterans do not richly deserve the honors that have been bestowed on them. Millions of them fought valiantly, at D-Day and elsewhere.
However, especially in these times, when the US has given in to the temptation to launch an unprovoked war largely alone on its own, it is important to remember how much assistance the US needed from allies in its most important victory ever -- and how it achieved its best results when it was fighting a clearly justified defensive war.
This viewpoint offers a helpful perspective on several other popular myths about World War II. These include (1) the myth that British intelligence breakthroughs like “Ultra” – a program that broke German encryption codes -- were critical to the war’s outcome; (2) the myth that US economic capacity provided the decisive edge; and (3) the myth that the atomic bomb had to be used to force Japan’s surrender.
This analysis also provides an interesting perspective on the many critics who have deplored the “tragedy” of the Russian Revolution and the brutality of Stalin’s forced industrialization campaign during the 1930s.
The unpleasant reality is that Tsarist Russia had barely held its own against Germany during World War I. It t is very unlikely that a Tsarist regime or even a Kerensky-style liberal capitalist regime could have achieved anything like the rapid industrial development that Stalin accomplished during the 1920s and 1930s. however, in restrospect, there is little question that Stalin's crash industrialization program permitted the Soviet Union to acquire the industrial base that proved to be essential for the defeat of Nazi Germany.
So it is all very well for First World liberal democracies like the US and the UK to look down their long noses at Russia's developmental misfortunes. But perhaps we in the West should at least acknowledge our debt to the Russian Revolution, Stalin’s brutal industrialization program, his millions of victims, and especially the long-suffering Russian people. If they accomplished nothing else, at least they saved our liberal democracies from fascism. This is hardly an apology for Stalin. But if anyone deserves to be called “the Greatest Generation,” it was the generation of Russians that had to face down both Stalin and Hitler during the 1930s and 1940s.
This does not imply that the Normandy invasion was worthless. What it really may have accomplished was not so much the defeat of Hitler, per se, but a more balanced post-war political division of Europe. With the Soviet Army in control of Germany and perhaps even much of France and Italy after World War II, the post-war history of Europe might have been very different. In that sense, the value of D-Day was less a matter of defeating Hitler than of affecting the division of Europe with Stalin.
THE FORGOTTEN GREATEST GENERATION
In retrospect, there is one group of American veterans that unquestionably deserves to be included in the “greatest generation” -- although it is never mentioned in veteran tributes, and none of its members have ever qualified for US veteran benefits.
This is the all-volunteer group of 2800 Americans that journeyed to Spain at their own risk and expense in 1936-39 to serve as members of the Abraham Lincoln Battalion in the Spanish Civil War.
A ragtag army, mainly consisting of leftists, union members, and many American Jews, they joined forces with some 56,000 other international volunteers from more than 50 countries, and fought against overwhelming odds to defend the Spain’s democratically-elected Republic against General Franco’s army, which was openly supported by Hitler’s Germany and Mussolini’s Italy.
Most of these volunteers were amateur fighters, without any military training. The arms embargo that was enforced by the future Allies -- the UK, France, and the US -- against the Spanish Republic – but not Germany or Italy – prevented the Lincolns and their comrades from having adequate arms and munitions. As a result, combat fatalities were very high. More than a third of the Lincolns died in battle, even higher than the 20-30 percent fatality rates recorded by US troops on D-Day.
Meanwhile, the US, the UK, France, and most other European countries (except the USSR), heavily influenced by conservative business elements and the Catholic Church, concocted the “non-intervention pact” that prevented arms and other aid from reaching the Spanish Republic. These Western countries also stood by and watched while Germany, Italy, and their allies aided Franco, seized Ethiopia, butchered China, and occupied Czechoslovakia. Throughout the 1930s, major US firms like GM, Texaco, Exxon, DuPont, Alcoa, and IBM, as well as Wall Street firms like JPMorgan, Brown Brothers Harriman, and Citibank, also continued to trade and invest, not only with Franco, but also with Hitler’s Germany and Mussolini’s Italy.
In the aftermath of the civil war, the Lincoln Battlion members continued to prove their heroism and commitment. After Franco won the civil war in 1939 and the Lincolns returned to the US, they were labeled as “premature anti-fascists” by the US government, prevented from holding government jobs or joining the military. To continue to fight the fascists, they had to enlist in foreign military services. In the 1950s, during the McCarthy era, many were blacklisted and otherwise persecuted. Despite such pressures, they continued to play a leading role in progressive causes throughout the last fifty years, right down to leading recent protests against the invasion of Iraq.
Ultimately, in the late 1970s, Franco’s dictatorship – which was supported by the US Government after World War II for nearly twenty years – gave way to the return of democracy in Spain.
Finally, in 1996, as a tribute to the Lincolns’ sacrifices, the “Second Spanish Republic” celebrated the 60th anniversary of the Spanish Civil War by welcoming those American veterans who had managed to survive to a commemoration ceremony in Madrid -- a modest version of this weekend's ceremonies at Normandy. Spain, at least, recognized that these American veterans had been the forgotten members of the Greatest Generation, whose courageous efforts were never properly honored by their own country.
SUMMARY
American veterans like my father and uncle certainly displayed extraordinary courage, sacrifice, and heroism during World War II. But, as they would have been the first to admit, in some ways they actually had a relatively easy time of it. This was not only because they had a great deal of help from allies like the Russians, the British, and the Chinese (against Japan). It was also because, as noted earlier, their war was perhaps the most clear-cut struggle ever fought between good and evil.
The veterans of all too many other American wars have had to face the fact that their wars were much less virtuous. Bearing that kind of understanding honestly certainly requires a special kind of courage and sacrifice. Perhaps that is why there is so much enthusiasm for the World War II festivities -- perhaps there is a hope that some of that war's glory will rub off on these other efforts. Those of us who have an opportunity to prevent our overly-adventurous leaders from launching such misconceived efforts, or to bring them to a halt as soon as possible, have every obligation to do so.
Finally, as we saw in the case of the Lincoln Battalion, still other American veterans have sometimes had to defy their own country’s policies of the day in order to fight for justice, and then pay a very heavy price for being “prematurely” right.
This year, as we honor those who helped to defeat global fascism, we should also honor those who were among the very first to take up arms against it.
***
(c) James S. Henry, SubmergingMarkets.com, 2003. Not for reproduction or other use without express consent from the author. All rights reserved.
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On December 5, 2003, President George W. Bush announced that he is appointing James A. Baker III to
to be his “debt envoy,” in charge of renegotiating Iraq’s huge foreign debt. To many, this is a welcome move -- Baker appears to be a savvy, affable fellow with strong diplomatic skills and multilateralist inclinations, which this administration sorely needs. And Iraq’s debt now stands at $128-$200 billion or more, depending on whose claims are recognized. (See below.) Since this is at least several times Iraq's entire national income, a debt restructuring is certainly long over due.
Indeed, as I’ve argued elsewhere, if Iraq’s foreign debt had been restructured in the late 1980s, when Baker was Secretary of State, many of our difficulties with Iraq -- including Saddam’s 1990 invasion of Kuwait, the prolonged embargo, and our most recent invasion of Iraq -- might well have been avoided entirely.
Those who are old enough to remember James Baker's terms as Secretary of the Treasury from January 1985 to August 1988 and Secretary of State from January 1989 to August 1992 may be struck by several other ironies.
As we’ll remind ourselves below, not only did his "Baker Plan" utterly fail to reduce the Third World debt when he was Treasury Secretary, but when he was Secretary of State, he actually encouraged the US Department of Agriculture and leading US and foreign banks to lend billions of dollars to Iraq -- despite its credit unworthiness. His motive back then was evidently to help Saddam continue to be able to import weapons from abroad and manufacture even nastier weapons back home. It seemed like a good idea at the time.
So, in a sense, this recent appointment shows that our policies have come full circle. It must be profoundly satisfying for 73-year old Jim Baker. His last hurrah in government may be to finally successfully restructure a Third World country's debts -- indeed, in this case, the same very country whose debts he helped to increase substantially fifteen years ago. We may not be able to find Bin Laden, but we certainly have located another enemy, Pogo……
THE BAKER PLAN’S TRACK RECORD
To begin with, Jim Baker’s credibility in debt restructuring is not exactly unsullied. In 1985, as President Reagan’s second Treasury Secretary, he launched his so-called "Baker Plan," the first of several attempts by the US Government to tackle the exploding Third World debt problem. It was managed day-to-day by Baker’s close associate, former Undersecretary of the Treasury Dr. David C. Mulford, who later became Chairman of Credit Suisse First Boston's International Group, and just last month was designated by President Bush II as the new Ambassador to India.
The “Baker Plan,” which relied heavily on a combination of tougher IMF/World Bank conditions in exchange for a modest amount of new loans, basically assumed that with the right policies, developing countries could grow themselves out of their excessive debts. Unfortunately this assumption proved to be wrong – with disastrous consequences for the countries. The Baker Plan, together with its successor, Treasury Secretary Nicholas Brady’s so-called "market-oriented," voluntaristic approach to debt reduction, were utter flops. The conditions that were imposed on debtor countries threw them into even deep recessions, provoking bloody riots (Venezuela, 1989) and debt moratoria (Brazil, 1987; Argentina, 1988). By the year 2000, the real level of Third World debt was 150 percent higher than it had been in 1985. (See Chart 1.1)
However, the Baker Plan, the Brady Plan, and other such “market-based” approaches to debt reduction that succeeded them did at least have one beneficial effect. They provided lots of opportunities for leading First World investment banks -- like Mulford’s former employer Credit Suisse First Boston, and Nick Brady’s investment bank Darby Overseas Investments Ltd., but unlike Baker’s own Carlyle Group, which has generally avoided developing countries -- to make a ton of money by structuring and syndicating privatizations and debt swaps, and by advising developing countries on the intricacies of how these plans really worked. (See my book for more juicy details -- including Dr. Mulford's involvement in Argentina's 2001-02 debt debacle.)
Mulford
THE ORIGINS OF IRAQ’S DEBT AND THE KUWAIT INVASION
In announcing Jim Baker's new appointment, President Bush explained that "the future of the Iraqi people should not be mortgaged to the enormous burden of debt incurred to enrich Saddam Hussein's regime.(emphasis added.)" It is hard to quarrel with that statement – up until the last five words. If Mr. Bush had actually bothered to examine the origins of Iraq's foreign debt, he would have quickly realized that "enriching Saddam" was a very minor part of the story.
Indeed, the vast bulk of Iraq's foreign debt today is supposedly “owed” to Kuwait, Saudi Arabia, and the other Gulf States. Most of this was incurred to help fight the Iran-Iraq War and defend the autocratic dynasties that rule these oil emirates against the Ayatollah Khomeini's brand of populist fundamentalism in the 1980s.
One of the main reasons why Saddam invaded Kuwait in August 1990, in fact, was that Kuwait and Saudi Arabia refused to restructure these "Iraqi debts" – at the same time they were accelerating oil production, driving oil prices down and decimating Iraq's oil revenues (and their own -- but they had much less need for the revenue back then.) By 1989, as it emerged from an eight-year war, Iraq's economy was a complete mess, with hundreds of thousands of war casualties, more than a million soldiers under arms, declining oil revenues, and this huge war debt.
Iran-Iraq War
Yet for reasons that are still very unclear to this day, the Kuwaitis and the Saudis insisted on being repaid in full, and actually accelerated their oil production.
If James A. Baker III, who was Secretary of State at that point, had really wanted to avoid Iraq’s subsequent invasion of Kuwait, he (and Mulford/ Brady) might easily have exerted pressure on these two US allies, who were completely dependent on the US military for their protection. Given that pressure, they might well have restructured Iraq's excessive debts back then, at a fraction of the cost that will be required in 2003 -- even ignoring all the other side effects of this delay.
Instead, Baker choose to adopt what might be termed a “Weimar” response with respect to Saddam’s debts. It was nothing less than a throwback to the hard-hearted policy that the US, France, and the UK adopted with respect to Germany’s war reparation debts after World War I – with somewhat similar long-term consequences.
Please don’t take my word for this, however. Instead, examine the detailed history of the “lessons learned” from the Iran-Iraq war that was published in December 1990 by the US Army War College’s own Strategic Studies Institute, just a few months after Saddam invaded Kuwait. On the subject of why Saddam had chosen to do so, the study had this to say:
Conventional wisdom maintains that Iraq always was covetous of Kuwait, and that, indeed, the nature of the Ba’athists is to be expansionists; in invading, the Iraqis were merely following their instincts. This explanation does not hold water. Why, for example, if they desired territory, didn’t they seize Khuzestan at the end of the war when Iran was prostrate? Why did they not at least insure themselves control of the Shatt Al Arab? By withdrawing completely from Iran, and turning the issue over to the UN for settlement, the Iraqis behaved as a responsible member of the world community.
Nor does it seem reasonable to argue that Iraq invaded Kuwait because it thought it could get away with it. Throughout the war, the Iraqis had ample evidence of the importance of Kuwait to the superpowers….M/font>
Taking all this into account, it seems obvious that Iraq invaded its neighbors because it was desperate. (Emphasis added.) It had a million man army that it could not demobilize, because it had not jobs to send the men home to. It had no jobs because its economy had been ruined by the war. It could not get its economy going again until it demobilized. Thus the Iraqi leadership saw itself in a vicious dilemma. At the same time, Kuwait was fabulously wealthy, and Iraq – by seizing it – could hope to exploit its wealth to resolve its economic problems….The lesson would appear to be, never make war until you have assessed the potential of your opponent. Iraq’s initial mistake in attacking Iran was in failing to appreciate the vast human potential that Tehran could exploit…And in the end, although it emerged “victorious,” it practically bankrupted itself.
In this view, then, Saddam was not so much a crazed madman, an expansionist bent on regional domination, or even an undeterrable, diehard anti-Zionist, as much as he was a desperate bungler, driven into the corner by his country’s own economic situation.
THE COSTS OF NOT RESTRUCTURING IN 1990
Was this view correct? We may never know. What is clear is that the cost of not bothering to find out has been enormous – especially compared with the cost of the mere $27 billion settlement that Iraq proposed and Kuwait rejected in July 1990, on the eve of the war.
Among the subsequent costs of failing to restructure Saddam’s debts” back then, we can include:
>The direct costs of the 1991 Gulf War. These include at least $100 billion of damage to non-oil infrastructure in Kuwait and $50 billion in Iraq, plus $61 billion of direct military expenses for the US-led coalition forces, an estimated $600 billion in longer-term reductions of the region’s gross domestic product; 2500 to 3500 civilians, 50,000 to 100,000 Iraqi soldiers, and 350 coalition forces killed; about 111,000 indirect civilian deaths during the wartime period, including 70,000 children, due to a breakdown in sanitation, the spread of infectious diseases, the disruption of hospital care caused by power outages, and the side-effects of more than 300 tons of depleted uranium ordinance used by the coalition in southern Iraq; up to 25,000 coalition troops who complained after the war of “Gulf War” syndrome, a mysterious “illness” that many believed might have been caused by exposure to chemical weapons; nearly 700 oil wells that were set afire, burned for a year, and caused an environmental disaster and another $20 billion of damage; and 11,000,000 barrels of oil that were released into the Persian Gulf, about twenty times the size of the 1989 Exxon Valdez spill. (See the PDF Version for footnotes to sources.)
>Compensation Claims for Gulf War Damage. As a result of the 1991 war, Iraq was also saddled with about $320 billion in claims for damage compensation, which it was supposed to pay out of oil revenues, channeled through the UN under the terms imposed by the Coalition. These claims included $117 billion claimed by Kuwait’s Public Authority for Assessment of Compensation.
By 2003, $148 billion of these Gulf War claims had been settled for about $.30 on the dollar, or $43 billion. Assuming conservatively that the remaining claims will be settled for an average present value of $.20 cents on the dollar, the remaining claims would be worth $36 billion. At that rate, Iraq will ultimately have paid out about $79 billion, in present value, for Gulf War damage -- on top of its foreign debt. This means that these compensation claims will have cost it almost as much as its entire Iran-Iraq war debt.
In the wake of the 2003 US invasion, Kuwait has indicated that it may be willing to exchange a portion of these claims for a stake in Iraq’s new oil concessions. Throughout the last decade, Iraq protested to no avail that many of Kuwait’s compensation claims were spurious, amounting to yet another forced transfer of its oil revenues to the wealthy Kuwaitis, even while Iraq's own citizens were starving. (Just to cite one example -- the case of a wealthy Kuwaiti who complained to the UN in 2003 about losing his thoroughbreds, jewelry, and art collection, and received $4 million in compensation, all of it paid for from Iraq's oil revenues.)
>Sanctions. There was also the enormous cost of the UN sanctions that banned all imports of Iraqi goods. The UN imposed these on Iraq four days after the invasion, and maintained them for 13 years, until May 2003. This was one of the most comprehensive economic blockades in history – way beyond the effort maintained, for example, against South Africa in the 1980s. But even these sanctions failed to get Saddam out of Kuwait, topple him from power, or force him to cough up his purported “weapons of mass destruction.”
What they did do was to create what can only be described as an economic catastrophe for Iraq’s people – despite the fact that they had much less responsibility for their dictator’s behavior than, say, the international community that had helped bring him to power in the 1960s, armed him to the teeth, and encouraged his aggressions throughout the 1980s, so long as it was directed against Khomeini.
These sanctions created havoc in Iraq’s public health, sanitation, and hospital systems, by interrupting the supply of imported medicines, hospital equipment, chlorine and pipes for water treatment plants, pollution control gear for the country’s oil refineries, and many other imported necessities. UNICEF has estimated that these 1990s sanctions alone were responsible for boosting Iraq’s infant mortality from 25 per 1000 births in 1990 to 92 per 1000 in 1995, and causing a one-third reduction in average per capita caloric intake by 1996. In 1996 the UN Oil-for-Food program was introduced to moderate these effects. Still, aid experts estimated that for the decade as a whole, the sanctions on Iraq probably claimed at least 60,000 to 100,000 victims per year – half of them children. In addition, the sanctions also imposed heavy costs on neighboring states like Turkey, which estimated that it lost $80 to $100 billion in trade revenues with Iraq because of their border’s closure.
Meanwhile, the one group of Iraqis that was least affected by the sanctions was of course Saddam’s own Ba’athist Party. A 2002 study by the GAO found that, while the UN Oil for Food program accounted for $51 billion of Iraq oil revenues from 1997 to 2001, another $6 billion of illicit income was probably generated through illegal oil exports and surcharges levied by key officials in exchange for contracts. It speculated that much of this income ended up in the usual places – bank accounts in offshore havens like Switzerland, Lebanon, and Cyprus.
These sanctions also provided the occasion for the well-known remark by US Secretary of State Madeleine Albright in 1996. When asked by reporter Leslie Stahl whether the policy was worth the deaths of 500,000 Iraqi children, she replied, “I think this is a very hard choice, but we think the price is worth it.” Many others did not agree. Two successive senior UN humanitarian program coordinators and the head of the World Food Program resigned from the program in 1998 and 2000, describing what was being done to the Iraqi people as “intolerable.” As one commented, “How long should the civilian population of Iraq be exposed to such punishment for something they have never done?”
The Clinton Administration’s answer -- like that of President George H.W. Bush I and James A. Baker III way back in 1991-92 -- was that, from the standpoint of the First World's own selfish interests, this brutilitarian policy was preferable to the full-scale invasion that would have been needed to take out Saddam and his crew. But for the events of September 11th 2001, and the opportunity that it presented to conflate Saddam’s regime with other “Islamic terrorists,” President Bush II would probably have reached the same conclusion.
All these costs are even before accounting for the enormous costs of the 2003 US-led invasion – at least $100 billion for military costs for the period March 2003 through yearend 2004, and an estimated $20-$30 billion a year for reconstruction. All told, the failure to head off Saddam’s adventurous attempt to solve his “debt problem” by invading Kuwait has easily had an economic price tag – even apart from all the suffering it caused – of at least $800 billion to $1 trillion.
This makes Iraq’s foreign debt – whatever it is – pale by comparison. And it should also make us all a wee bit curious to know whether negotiating a debt-and-oil-price settlement with Saddam was ever seriously considered by James Baker way back in the late 1980s, before all these bloody chickens came home to roost?
IRAQ’S FOREIGN DEBT – WHO’S OWED WHAT NOW?
A s for Iraq’s foreign debt now, who is owed what, and with whom will ‘debt envoy” Baker have to negotiate? Estimates of the debt’s size vary widely, because different measuring rods and time periods are used by different analysts. But by all measures, the accumulated debt burden was already very heavy by the end of the 1980s. And most of it was clearly due to the Iran-Iraq War, which lasted from October 1980 until July 1988, when Iran finally accepted a ceasefire. Since the US and its allies, including Kuwait and Saudi Arabia, actively encouraged that war, and provided assistance to both sides in the interests of perpetuating it, there is a strong moral argument that the portion of the Iraqi debt that pertains to it should indeed be these allies' responsibility.
Iraq’s own official estimate of its foreign debt as of December 31, 1990 was just $42.1 billion. But this left out a huge amount of “quasi-loans” that it had obtained from neighbors like Kuwait, Saudi Arabia, and the Gulf States -- all of which informed Saddam after the war that they had never considered these funds as "grants," but loans, which they expected to be repaid. As noted, this became a crucial bone of contention in the events leading up to the Kuwait invasion.
Since Iraq was embargoed throughout the 1990s, except for UN-approved “Oil-for-Food” transactions, it did not contract any new loans after August 1990. The World Bank/ Bank of International Settlements estimated in 2001 that as of 1998, Iraq’s foreign debt totaled $127.7 billion.
However, this included about $47 billion of interest that accrued during the 1990s. Since this was a period when Iraq was subject to sanctions that prevented it from doing any debt restructuring, however, it is questionable whether it is really fair to charge Iraq for all this imputed interest (calculated by the World Bank at a 7 percent a year.)
Netting out this interest, the World Bank's estimate implies that Iraq’s foreign debt was $80.7 billion in August 1990, just before the Gulf War – including all the disputed finance from the Gulf States. That already made Iraq’s debt-to-national income ratio about 1.1, or $4600 of foreign debt per capita – not quite as high as the debt burdens of some other Third World countries (like Nicaragua), but as high as for the typical “heavily-indebted country.”
Of this $81 billion total, fully $47 billion was "owed" to Arab kingdoms, including $17 billion to Kuwait, $20 billion to Saudi Arabia, and $300 million from Jordan and Morocco. (If interest is included, this adds another $30 billion the $47 billion. ) Most of the $47 billion was provided during the first three years of the Iran-Iraq war, when these countries were most afraid that Iraq might lose the war to Iran. A US intelligence estimate says that Kuwait and the Gulf emirates provided Iraq at least $1 billion a month from October 1980 through the end of 1984, in order to sponsor this war effort.
Another $13.5 billion was provided by the Soviet Bloc, including $12 billion from the USSR (including about $7 billion for arms), $1 billion from Bulgaria, and $500 million from Poland, in the form of export credits. Another $800 million was loaned by Iraq’s good neighbor to the north, Turkey. (Iraq also received the whopping sum of $50 million in foreign aid from the Soviets and Western Europe during this period.)
Finally, about $19 billion of Iraq’s foreign debt came from First World Western sources, including $13.5 billion of bilateral and government-guaranteed export credits from the 16 members of the “Paris Club.” These were also mainly used to finance Iraq’s arms imports. The leading providers were France’s COFACE, which loaned $ 3.75 billion of export credits outstanding for arms and $4.3 billion for other goods; Japan’s JEXIM and leading trading houses, which loaned Iraq 700 billion yen ($5.8 billion); the UK’s ECGD, which provided more than $1 billion in credits, and became Iraq’s “paramount favored creditor;” and Germany’s HERMES, Austria’s OeKB, Canada’s EDC, and Australia’s EFIC.
While these government agencies provided the loan guarantees, a whole army of private banks actually got involved in delivering the guaranteed credits, and some also provided their own credits to Iraq. Among the most important private banks involved in Iraq lending during the 1980s were Germany’s Commerzbank, JP Morgan, Chase, Gironzentrale (Austria), First City Bank of Houston, and Gulf International Bank (Bahrain.) In the early 1980s, JPMorgan also made several rather unusual, life-saving loans to a Brazilian arms company, Engesa, which became one of Iraqi’s principal arms suppliers.
All told, therefore, when James Baker looks around to see who will have to “eat the losses” on Iraq’s foreign debt, he will quickly learn that it not just our Old European rivals, the French and the Germans, or even the fair-weather Russians, but the original “hard ball” players from 1991, Kuwait and Saudi Arabia.
Let’s just hope that James Baker has more success negotiating a debt reduction for Iraq with Kuwait and Saudi Arabia than Saddam did.
IRAQ’S FOREIGN DEBT – BAKER’S OWN INVOLVEMENT
The other interesting fact to know about James Baker’s experience with Iraq’s foreign debt is that he was deeply involved in making it larger. While he was Secretary of State from 1988-92, our very own US Department of Agriculture's Commodity Credit (CCC) Program loaned Saddam nearly $5 billion, with James A. Baker III's knowledge and active encouragement.
Under the US Department of Agriculture's "GSM-102" export credit program, the CCC underwrote private loans that were extended by US banks to foreign banks or US exporters, supposedly for purchasing US commodities like wheat and rice. The DOA had approved Iraq’s participation in the “GSM-102” program early in the Reagan Administration, in December 1982. In 1983 the CCC guarantee $385 million in Iraqi credits to import American grain, the first in a long series of such guarantees. By 1990, these CCC credit guarantees were being issued to Iraq at the rate of $1 billion per year, and accounted for more than 20 percent of the entire GSM-102 program.
These loans were made, not just to feed Iraq’s people and support US farmers, or certainly not because Iraq had good credit, but as part of an effort to cultivate a close relationship with Saddam’s regime -- and especially in the late 1980s, at a point when his oil revenues were collapsing and no one else would lend him any more money, in order to help him continue buying arms.
Yeutter
In June 1989, for example, US Secretary of State James A. Baker III wrote to the US Secretary of Agriculture, Clayton Yeuter, asking him to boost the CCC’s loan guarantee program to Iraq to $1 billion a year. Yeuter promptly did so. Even September 1989, when a major scandal surfaced that involved lending to Saddam by Italy's largest state-owned bank (privatized in 1998) Banco Nazionale del Lavoro (BNL), the record shows that Baker lobbied hard to continue this lending, with the State Department commenting in February 1990 that “the CCC program is a key component of the (Iraq) relationship….we need to move quickly to repair the damage to the US-Iraqi relationship by getting this critical program on track.”
Many prominent US and foreign banks helped to arrange these Iraqi credits under the CCC program, including BNL, JPMorgan, Midland Bank, Chase, First City Bank of Houston, Bank of New York, DG Bank (Germany), Bank of America, Arab Banking Corp. (Bahrain), Gulf International Bank (Bahrain), Girozentrale (Austria), and UBAF. All told, from 1983 to 1990, the USDA’s CCC program extended more than $5.5 billion of credits to Iraq – of which $2 billion was still outstanding when it invaded Kuwait in August 1990.
For a country with just 18 million people at that time, this was an enormous trade credit. But we now know from sources in Iraq and Jordan that much of the grain that these loans were supposed to have purchased never even reached Iraq. Much of it was traded by Saddam’s intermediaries in Jordan, Turkey, and the then-Soviet Union for munitions, spare parts, chemical and other military supplies.
Most of this story has never been fully investigated. The morally-obtuse Clinton Administration decided that it had better things to do than chase down “Iraq-Gate” after it won the 1992 election, and the current installment of the Bush Dynasty certainly has no interest in doing so. Fortunately for Mr. James A. Baker III, the appointment to his new "debt envoy" position doesn't require Senate confirmation.…..
The historian can always dream, however, of being able to ask him a few questions about what really happened way back then, and what he thinks might have been possible with a little more aggressive, more timely, if perhaps less "voluntaristic" approach to debt restructuring.
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(c) James S. Henry, SubmergingMarkets.com, 2003. Not for reproduction or other use without express consent from the author. All rights reserved.
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Cynics say it was always just a matter of time. Indeed, the real story is not about Saddam Hussein’s capture, but about
how he managed to survive so long, given all the forces that were arrayed against him.
There is also the dismal possibility that, despite his capture, the Iraqi resistance will continue to escalate its attacks, especially on other Iraqis. (Indeed, at least in the first few days after Saddam's arrest, this is precisely what has happened. The arrest has, however, resulted in some short-term gains against the resistance. We can only hope that these prove to be longer-lasting than the impacts of the deaths of Saddam's sons last summer.)
Furthermore, the tactics that were applied to "get him" may be largely inapplicable to "real terrorists" like Osama bin Laden and Ayman Al-Zawahiri, who have already targeted thousands of US civilians, yet remain free. From their standpoint, on the one hand, they never got very much (or perhaps any -- the evidence is very sketchy) support from Saddam, and as President Bush has admitted, there is no evidence that he was involved in 9/11. On the other hand, they are probably delighted to see the US tied down in this costly military venture in Iraq, rather than focusing on them. (The recent upgrade of the US terror alert status to "high" (orange) is not inconsistent with this interpretation. We hope that we are proved wrong.)
Finally, of course, the direct costs of this "arrest" have indeed been astronomical. As of this week, this most recent US-backed effort to invade Iraq and eliminate Saddam has, according to most recent estimates, cost the lives of more than 543 Coalition troops, 8-10,000 Iraqi civilians, another 8-10,000 Iraqi combatants during the first month of battle, and at least that number of combatant lives since then. The number of Coalition wounded is now at least 3100, while the number of Iraqi wounded may be conservatively estimated at 50,000 (about 2 times the minimum number of fatalities).
In addition, it now looks as if former Bush economic advisor Larry Lindsey was absolutely right: the cost of the Second Iraq War and the reconstruction to follow will easily reach $166-$200 billion by the end of 2004. By comparison, the USG's entire foreign aid budget in 2004 for all other countries is less than $20 billion.
Compared with all these costs, it is now clear that the best way to have avoided Saddam's menace would have been to have not assisted his rise to power in the first place in the 1960s and 1970s, or at least to have not armed him to the teeth in the 1980s, or at least to have not prevented UN coalition forces from removing him in 1991, after the Gulf War.
In short, while it would be perverse not to celebrate Saddam's capture, this development is surely no panacea, and the "opportunity costs" of abetting Saddam's rise and fall appear to have been very high. Let's hope that the US at least learns something from this very expensive tutorial about the long-run costs of coddling dictatorships.
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In hindsight, it really does appear incredible that Saddam has lasted as long as he has. After all, it is not as if he is without enemies in Iraq, even apart from the US. And the effort that the US has devoted to "getting him" has been truly stupendous:
At the war’s outset, in March 2003, Saddam was targeted by several "decapitation" air strikes that employed the latest “smart bombs,” eavesdropping equipment, remote-controlled flying drones, and satellite intelligence. On March 19, for example, one of his compounds near Baghdad University was hit by four 2000-lb. bunker-busters and 40 cruise missiles. President Bush rejoiced that “Saddam at the very minimum was severely wounded,” but that remark proved to be premature. On April 7, a B1 bomber dropped four more 2000-lb. bombs on a Baghdad restaurant where Saddam was supposed to be hiding with his two eldest sons. US investigators spent weeks going through the rubble, searching in vain for Saddam’s DNA. They did find the DNA of 14 deceased Iraqi civilians.
After the war’s official end on April 9, Saddam was pursued for nine months by up to 1500 US “elite” troops who were members of black ops” units like "Task Force 20," “Gray Fox,” and “Task Force 121.” They moved pretty freely throughout the country, carrying out more than 400 raids and detaining several thousand Iraqis for questioning, including several dozen members of Saddam’s extended family. Last July they succeeded in killing two of his three sons, Uday and Qusay. (No one says much about Ali, the third son born out of wed lock.) These elite forces also managed to kill at least a half dozen more Iraqi civilians and 25-30 gasoline smugglers who were chased 25 miles into Syria on a false tip.
It is worth noting that, contrary to the expectations of senior US military officers, killing Uday and Qusay had no noticeable effect on the Iraqi resistance – indeed, it grew rapidly after their demise.
From July 3 on, Saddam had a $25 million bounty on his head – about 20,000 times the average Iraqi’s annual income. Apparently such bounties may have helped produce information that helped to locate Saddam’s sons. But it is doubtful that the bounties had anything to do with Saddam’s capture. Just last week in Baghdad, Defense Secretary Rumsfeld admitted that the reward had not produced any useful information, and conceded that he was “dumbfounded.” And US General Ricardo Sanchez’’s report on Saddam’s capture also suggests that US troops did not rely on big bounties – though they probably made use of smaller payments.
So after months of the big bounty/ special ops approach, as of mid-November the hunt for Saddam had stalled. When Bush visited the UK on November 18, he got lots of caustic comments about precisely this issue – Glenda Jackson, the former minister and actress, asked, 'Why is George Bush being given a triumphal ride down Whitehall when Saddam is still roaming free?' And Air Marshal Sir Timothy Garden, of the Institute of Strategic Studies, hardly a screaming loony, declared that it was 'totally unacceptable” and “down to incompetence” that Saddam was still at large.
Meanwhile, the Iraqi resistance took off. November saw 109 fatalities and nearly 400 wounded among coalition forces, the worst month since March. Even more important for the country's stability and the resistance's future, the number of Iraqi civilian casualties was soaring.
Moreover, with less than a year to go until the 2004 US Presidential election, the proportion of Americans who felt the war was going well had fallen from 86 percent in May to 42 percent. Fully 55 percent disapproved of Bush’s “post-combat” management of Iraq situation. Despite the fact that the economy was showing signs of recovery, several polls taken during the first two weeks of December, showed that Bush’s approval rating had fallen to just 50 percent, its lowest level since before 9/11, with record disapproval levels.
Responding to all these developments, the US military, under strong pressure from Washington, decided to unleash much more aggressive tactics on the ground, especially in the Central Provinces around Tikrit. Ultimately it was these harsher tactics that turned the trick.
To begin with, according to Seymour Hersch’s report just this week, US special forces like “Task Force 121” were recently authorized to engage in proactive tactics that resemble the CIA’s Phoenix Program in Vietnam and Israel’s tactics against the Palestinians, including the use of assassination, kidnapping, and torture against civilian insurgents.
Even more important, in mid-November, the 4000-person First Brigade of the US Army’s 4th Infantry Division in Tikrit, under the command of Colonel James Hickey, started to resort to the use of West Bank/Gaza -like tactics, complete with giant Israeli D-9 bulletproof bulldozers and Israeli advice on counter-insurgency tactics. These new tactics included late-night house-to-house searches, military checkpoints, razor wire cordons, curfews, the detention of suspected insurgents’ relatives, and house demolitions.
It appears that these strong-arm tactics, especially the mass roundups and family interrogations, helped to produce the information that finally resulted in Saddam’s capture. In particular, it now appears that the critical information that led to Saddam's capture was produced not by voluntary cooperation, but by the interrogation of a detainee.
Whether the benefits of flushing Saddam out of his spider hole are ultimately worth the undoubted damage that such tactics may have rendered to US relationships in Iraq and the Middle East in general is debatable. But one point is clear -- unless the US invades Pakistan, these strong-arm tactics will not be available to use in the lawless regions of Pakistan’s Northwest Frontier Province, where Osama bin Laden, Ayman Al-Zawahiri, and former Taliban chief Mullah Omar are reportedly holed up.
In other words, even if the bounties on these proven terrorists in Pakistan are increased (the bounties on Osama and Al-Zawahiri are already $25 million each) , and even more “special ops” units are diverted to search for them, Osama and his associates are unlikely to ever be captured. Of course these folks are the only ones who have ever been shown to have launched catastrophic attacks against US civilian targets -- unlike Saddam Hussein. And they are all holed up in Pakistan, an unstable country that really does have weapons of mass destruction - plus instability, and tens of thousands of religious fundamentalists. Indeed, just yesterday, while Saddam was being processed after his arrest, Pakistanalmost lost President Musharraf to a terrorist attack.
But the day after Saddam's capture, President Bush was in no mood to focus on such complexities. He lost no time in trumpeting Saddam’s capture, pledging that it meant that "a dark and painful era in the history of Iraq is finally over.” Characteristically, Donald Rumsfeld was even more hyperbolic, asserting that “The Iraqi people have now been liberated in spirit, as well as in fact.”
They might eventually prove right, but their ability to predict Iraq’s future has so far not exactly proved to be spot -on. In particular, there’s no evidence that Saddam exerted anything like the influence that Bush and Rumsfeld imply he did with respect to the Iraqi resistance. He was widely detested, even by his fellow Ba’athists. He had no communications equipment with him when he was captured, so it is doubtful whether he could have played much of a role in coordinating the resistance. Most important, the resistance is likely to continue until there is a genuine representative government in Iraq – sometime that will not happen until next summer, at the earliest. With Saddam gone, however, and just 13 people left on the Coalition’s “top 55” most-wanted list, at least this theory of the resistance can now be decisively tested.
One of the more surprising aspect of Saddam's capture, by the way, was its pacific character. Actually, we should all feel grateful for the fact that this putative “monster” was captured alive. Apparently Saddam’s faith in the afterlife did not rival that of other members of the Iraqi resistance. This will permit him to receive a fair trial -- a salutary exercise for Iraq's first post-Saddam government. And he may also be able to use his brief remaining time on this earth to help us solve a few riddles about the past, such as what really became of all his WMDs, his alleged connections with al-Queda, and the history of his relationships with foreign powers during the 1980s. Naturally we trust the Bush Administration to share all his candid responses with us. (According to Time, Saddam has reportedly already told American interrogators that Iraq never had weapons of mass destruction.)
So good riddance to Saddam! One cannot but hope that this will indeed prove to be a turning point in Iraq’s struggle for democracy, peace, and independence.
To the triumphalists in the Bush II Administration, however, we also need to insist that Saddam’s capture really becomes a turning point for the First World-- it should henceforce be unwilling to help such dictators rise to power in the first place. In particular:
- Saddam's removal might have been undertaken 13 years ago, at much lower cost, by the UN-backed international coalition that was assembled by Bush I.
- Even before that, during the first Reagan Administration, in which Rumsfeld served, and in the last year of the Carter Adminstration, Saddam might have been discouraged from invading Iran, and he might have been provided with far fewer weapons and key ingredients for WMDs.
- Long before that, the Nixon Administration and Henry Kissinger might have refused to betray the Kurds when they tried to resist Saddam.
- Before that, in the 1960s, the Kennedy /Johnson Administrations and the CIA might have declined to help install Saddam’s Ba’athists in Iraq in the first place.
Of course all these were complex judgments, made under the acute pressures of the time. But it is important for us to be reminded of our own deep responsibility for the Saddam "monster" -- if only to avoid making such mistakes again.
For the moment, however, conventional news coverage will probably just continue to celebrate Saddam’s capture like some medieval morality play. This doesn't do justice to history, but at least it helps television news compete with its increasingly close substitutes -- the all-movie and all-wrestling channels.
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© James S. Henry, Submerging Markets, 2003
