Here is my essay in response to this question that was an exam question in 2005 while I was obtaining my Master’s Degree in International Studies. Enjoy.
The tools of economic statecraft that the USA could have used to be successful before the invasion of Iraq (2003) revolved around the primary goal of peace and security in the region.
Instead a veil of propaganda promoting the exportation of democratic ideals (via military statecraft) superseded the original goal. Viewing the path to peace and security using economic statecraft requires separating the targets, using well thought out alternative techniques, and assessing individual costs and benefits. A larger variety and targets used in alternatives requires assessing the effects on secondary targets and when judging costs need to be balanced on application towards the primary goal. One large application of economic statecraft is doomed to fail without a multitude of supporting policies. The other option, military statecraft focuses on one target and echo uncertain effects throughout a range of goals. In putting forward these alternative policies of economic statecraft, the discussion will first center on Iraq and expand outward in geographic regional rings. The consideration of whether Saddam Hussein should remain in power or not would be of lesser value relative to the goal of peace and security in the Middle East. Either containment or regime change shall not be chosen as a goal, but both are acceptable outcomes. Isolating and reducing the threat of Iraq’s actions disrupting the region takes priority. Additional goals concerning terrorism, weapons of mass destruction, human rights, poverty, security of oil supplies, and keeping the region in the USA sphere of influence will be considered. There were alternatives to the negative economic sanctions placed on the Iraqi people. The citizens of a nation were placed on international death row or at least by the stubbornness of a dictator. Such economic sanctions, either positive or negative, instead needed to target the Iraqi government.
The United Nations attempt at negative sanctions on Iraq, resembled the League of
Nations, followed the route of decide, declare, and disintegrate. Keeping dual purpose materials
out Saddam’s hands and food from Iraqi stomachs it divided states into two blocks, diplomatic
doves favoring time in order to work and impatient hawks calling for action. The military
statecraft option chosen through US leadership, holding the hand of the willing, could have
alternatively used that leadership position in an effort to adjust the sanctions. For example, the oil for food program did not achieve its desired effect and was doomed from the start. The scandals and kickbacks from the program and damaging effects on the Iraqi standard of living were predictable. Therefore, the implementation of the program could have been better directed and supervised. Involving states with less to loose financially if trouble escalated in Iraq would have been a wise decision. And where did the tons of food supplies come from? Surely not those
poorer states with agricultural products to trade for crude oil. They would have been perfect
candidates. Imported food stuffs were items that stockpiled under Iraqi government control and
became a tool. An alternative would have substituted storable goods with the millions of tons of
fresh fruit, vegetable, and dairy products destroyed for price stabilization on the world market. If
your isolated and hungry, the last thing to do is let the prisoner determine the menu. Just how
could the Iraqi government use food to control a hungry population had they tons of fresh fruit sitting in a warehouse with an impending loss of value situation? Modifying the content of food
for oil program seems logical. Additional problems arise in having not made these changes.
Pull North Korea into the equation, would they trade nuclear weapons for warehouses full of wheat? Could this food be traded for hard currency to support the Hussein regime during sanctions? Perishable goods to Iraq would have limit trading capabilities, instead the UN worried in detail over dual purpose material and machines while children died needlessly. It seems like a simple business decision that a rational person would make, dictating terms of an agreement while in a position of relative power. Oversight to the program could have been delegated to more neutral nations of respectable character such as Canada, Japan, Switzerland and the Scandinavian states. The countries that had investments (and previous connections) in Iraq, France, Russia, China, and Germany, for example, remained involved and were obviously too liable to corruption. Isolation through sanctions would need to focus on both sides of the coin. These modifications of positive sanctions (oil for food) would have reduced the damaging effects on the Iraqi people, prevented the negative world opinion on the harm of economic sanctions, and keep the UN partners hands cleaner. The Clinton Administration just agreeing to a policy is not enough.
Economic statecraft needs to be analyzed in detail on the level of military operations.
The sanctions isolating Iraq damaged economic ties of a few states without enough consideration for the consequences. For example the Chinese, French, and Germans had major investments in Iraqi telecommunications infrastructure. To influence these states to abide by the negative sanctions and agree to alternative positive sanctions suggested by the USA, there needed to be benefits offered for sacrifices made, either guaranteeing a percentage of any loss incurred, paying a subsidy to any firms loosing money under the sanctions, or even buying contracts or products destined for Iraq. It is straightforward approach but the sanctions would have been better supported and lasted longer under different conditions that calculated its ripple effects amongst participants. Other alternatives to reducing the Iraqi people’s suffering during the sanctions needed to be implemented. There could have been the channeling of funds for medical supplies and staff through acceptable institutions. The long ignored US Muslim population that is not in the extremist camp may have been a good candidate. International funding combined with US Muslim charities could work with legitimate Islamic charities (the Red Crescent) to distribute
assistance. This long isolated segment of the US population would gain respect and acceptance stateside and display the benefits of multiculturalism to the world as a benefit. Costs would be minimal and the technique is feasible as proven by extremist groups have been using this for years. The UN economic sanctions, like the Iraq invasion (2003), were based on actions that existed at one point in time and was not a functioning policy after that. A goal is not obtained by one action and waiting for a response, a real policy would have built in contingency plans to
Additionally aid directed for the Iraqi people could have been channeled through the surrounding states. A enemy handing an apple to you when you are hungry looks different face to face than through a gun sight. The traditional rivals of Iraq, Iran and Saudi Arabia, have concernsover more than just peace in the region, sections of the the Iraqi population are related by the the
Sunni and Shi’a Muslim sects of Saudi Arabia and Iran. Persuading Saudi capital to invest into Iraqi oil infrastructure as an offer to Saddam for compliance with UN mandates was never offered. It would have required Saddam to adjust his behavior but aid from a neighboring Muslim nation would have a better chance of acceptance than from a state outside the region . Of course this would have to be offered after the sanctions had further deteriorated the Iraqi economy and infrastructure. US Iran relations have suffered terribly over the past decades. Displaying concerns for the Shi’a population and opening dialog with the Iranians to assist in the problem would have been an opening door to better diplomatic relations. If correspondence was accomplished in the IranContra scandal, why not use another third party state again? Iran would be resistant to publicity of cooperation but any dialog, even if secretive, could lead to further cooperation. What other opportunities exist for USIran relations to start? This was an excellent opportunity.
A significant problem for developing nations is the exodus of intellectuals. The USA has been a traditional destination for of these individuals. After the September 11th attacks there has been a significant reduction of skilled and educated labor choosing the USA as a destination. This loss along with the decrease in foreign students, could have been substituted by a brain drain targeted at Iraqi society. Offering benefits to defectors and the chance for a better life utilizing his or respective field of expertise would have not only weakened Saddam’s regime. Interviewing an
academic scholar to determine his or her claimed skill or educational level would be much easier
than determining if a student or tourist is part of a terrorist cell. Costs of such a plan would have
to weighed against the cost of educating the US citizen to the same level and experience. If the
negative sanctions did not diminish Saddam’s control over the Iraqi nation, an alternative was to
complicate his long term ability to do so by manpower reduction.
Iran stands as a main rival to Iraq. Iran also suffers from major deterioration of its oil
industry infrastructure. If Saddam did not fear US led invasion, a strengthened Iran and possible
future war, would be an additional threat to his regime. It may be 19th century European political
attitude in nature to have a balance of power, but does stabilization have t be built on democracy
or can it be accomplished by a balance of power? Additionally, if comparing Germany’s 20th
century fears of a two front war, Saddam’s Iraq was in a much weaker state to deal with such a
possibility. If the USA announced economic aid to help boost Iran’s oil industry, either direct or
through a third party state, the weight of the statement would have its desired. Such aid could be
slated for a future date, trickled, or delayed after the announcement to target Iran into complying
with additional agreements. The announcing to possibly releasing spare parts for Iran’s aging US
built fighter aircraft could also be included. Another possible war with Iran, this time without US
military aid, could be the straw that breaks the camel’s back, either by internal military coup
against Saddam or nonsupport of such a war by the populace. Potential costs of a stronger Iran
in the region would be only to the degree of aid given, and could be terminated. It may seem
extreme but the USA has let the these states to battle before, even the possibility of such could be
used to US advantage. The costs may reduce US international prestige and outrage domestic
forces in changing its hardline course towards Iran but this would only be temporary. Benefits of
a softer line on Iraq would also assist in Afghanistan reducing the threat Iran experiences by US
presence through commencing any form of diplomatic relations.
The European Union could also be swayed into supporting US policy for alternative economic statecraft. As previously suggested, the covering European losses in Iraq would be a
start. A rather bold move would to be by meddling in Europe’s backyard. The goal would be to
test the European Union resolve into accepted US hegemony or stepping up to the plate and
becoming a major world actor. Europe went from one extreme to the other, imperialists to
diplomats. The USA should pressure the EU to either become a partner or get out of their way. If
the USA targeted economic aid into the Balkan and Eastern European states it may reduce the
prestige of European leadership. Europe has for the past decades been unwilling to extend it
political power into world affairs. The inability and lack of will to resolve the recent conflict in
the former Yugoslavia is proof. The USA encroaching into the European Union’s sphere of
influence would be an attempt to test its political will and become a stronger influence in world
affairs or bow to US hegemony. Saddam was aware of the differences in US and EU attitudes and
policies. By the USA forcing the EU to make a move and take a stance, it could release itself
from the divide Saddam’s could manipulate. Is it feasible? Consider the Coalition of the Willing
that allied to invade Iraq in 2003, a move was made to confirm support or resistance in regards to
the use of military statecraft. Such a move should be done to test the alliances in economic
statecraft as well. One can not assume cooperation from autonomous states that are not in direct
threat of attack from a rogue nation. Turkey, the political Achilles heal of NATO and a problem
the European Union vacillates on, could also be a target of US economic aid. A stronger US
Turkish alliance raising cooperation above NATO’s common defense policy, would seal the ring
around Hussein’s expansionist tendencies. Economic statecraft could be used to separate support
or opposition to US foreign policy.
One of the rallying cries to the Muslim for Saddam’s anti-US stance was the Israeli
Palestine question. The Marshall Plan using a massive economic aid to assist recovery was able
to unite a centuries war torn European continent into a cooperative political entity. Economic
prosperity is a reality the Palestinians are along way from obtaining. Positive action towards
Palestine would pull the race card from the poker hand of Saddam. Israel, could also be offered a
major package with stringent conditions to further assure the policy of peace with Palestine
would be successful. Just a percentage of what is spent on a overseas modern conflict would be
effective. Economic statecraft can, like military statecraft, erode the strengths of a targeted
China as a nation with a developing appetite for petroleum could have been involved with
negotiating positive sanctions and aid in the region. China is searching for a greater position in
world affairs. Its expansion policy into neighboring countries and military buildup seem the only
methods available to achieving increase stature. The cash reserves and Chinese craft at using time as an asset would be a beneficial partner. They have relations with nations in the region and
could have been an active player reducing the burden on the USA. Additionally, involving China
would continue the policy of splitting SinoRusso relations and help counter Russia’s influence in
the region. Major cost would be acceptance of China as a viable world power and US realization
that as the Soviet Union dissolved as a superpower, so did some of the status the US held.
A perplexing problem in Iraq was the shadow cast by the former Soviet Union. Russia’s
vast resources, traditional authoritarian ways, and historic interest in the region would be a
challenge to any policy based on economic statecraft. Offering the Russians a warm water port
or asking them to stop arms sales in the region would be a difficult prospect. The Russian will
always choose their own way and either stance to isolate them or share some influence could be
chosen. How involve in obtaining the goal of peace and security in the Middle East region
centered on Iraq through economic statecraft may prove to be extremely challenging.
A major stumbling block in US foreign policy would also have to consider the domestic
political costs and ability for the government to gather public support. Typically US foreign
policy is aimed at the Middle East to obtain secure oil supplies and sustain the US economy. Our
domestic energy policy (or lack of) is geared towards the US as the center of the economic
universe. The attitude is that of a world driver of the global economy with a firm hand grip on
the wheel. If the US is going to steer, it should at least head in a direction minimally acceptable
by the passengers. Could a combined domestic based policy and internationally focused target
be such an alternative? Action taken on a domestic front could have a targeted goal on the
international level. The do as I say, not as I do phrase could be eliminated and transformed in
positive based economic statecraft. If USA domestic actions benefited the world, it would easier
to secure long term coalition opposing Saddam’s regime. States defecting from cooperation in
economic sanctions are more detrimental in the long run that sanctions that fail in unified
attempts. A loose disgruntled coalition would be apprehensive to continued attempts as long term
economic planning. Then how could US domestic policy strengthen support for economic or
military statecraft amongst a multitude of autonomous states?
Modern military specialists speak of the psychological effects of shock and awe. When the Bush Administration speaks of reducing oil dependency, it is more like talk and ignore. Rather than implementing domestic policy requiring slight changes in social behavior, US society continues on its self-centered path. The US implementing various domestic policies to reduce energy consumption with a publicly stated objective of benefiting its allies would definitely be labeled shock and awe. If the US reduce petroleum consumption, the resultant increased supplies would lower world oil prices. These benefits could be directed towards allies and potential ones. For example, Europe facing reduced energy costs in a time of high unemployment would benefit might loosen its stance to US leadership. One is more apt to follow a leader who sets a good example. Two previous US Presidents convinced a generations to cross an ocean and die to free Europe, couldn’t one at least try and get a generation not to run to the mall or joyride to save fuel? There is not mush press on any congressional leader riding a bicycle to work. Also, where did all the talk of hydrogen fueled automobiles go from Bush’s state of the union address a few years back? It left as fast as a Tomahawk cruise missile on its way to Baghdad. The US homeland offers an excellent opportunity to increase support for US economic statecraft. Finally, lower petroleum prices equates to less capital flowing into the hands of decision makers not concerned with US foreign policy goals.
The prospect of the USA approaching the coalition of nations implementing all types of
economic sanctions needed better foresight and diversity in its application. The leadership role
needed the USA to accept more costs if it was to expect others to do the same. The obvious “
obey the sanctions or else” attitude towards Iraq was about as comprehensive and well thought as
the current quagmire the USA is in now. If the poor man always pays more in the long run holds
true, then the USA is truly a poor man. If half of the estimated 400 billion dollars spent on the war were directed on positive economic statecraft, either towards Iraq or the Middle East region,
the USA may have regained its pre-Cold War stature as a genuine benevolent state.
If the goal of sanctions was to damage Saddam Hussein, two outcomes were possible,
either his compliance with regards to United Nations demands or regime change by popular
uprising or military coup. The negative sanctions were relatively ineffective in either case. The
addition of positive economic actions may have given the Iraqis something long forgotten, hope.
If the Iraqi people looked at neighboring Islamic nations conditions as measure of US policy in
the region, keeping Saddam may have been a lesser of two evils. A situation that is bad yet
familiar is a rational choice to uncertainty of future conditions. The US and European Muslim
population are not known for praising the treatment received as immigrants.
In either economic or military statecraft, some change is needed by governmental action.
President Bush had two options in regards to calling upon his Christian faith as a leader.
The first option was the sword to backup economic sanctions against Iraq. Let us not forget the
use of the word crusade in one of his public statements. The second option is the long forgotten
Christian principal of charity, let alone forgiveness. Commonalities in the two religions were not
applied to the policy of economic statecraft. Christian based nations chose to create poverty
rather than alleviate it. The longstanding alienation of the Muslim world has reached a new level
and at the crossroads, the USA took a shortcut. By not adjusting economic statecraft to obtain
goals, the US gambled with military statecraft without regard for real negative side effects.
Foreign policy towards Muslim extremists, like the economic statecraft polices towards Iraq,
passed on from the Clinton to Bush Administration clearly failed. The policy of economic
sanctions again will be filed under the failed, labeling all forms of economic statecraft as
ineffective. If the resolve is found to attempt economic statecraft in the future, it should be
conducted on multiple levels and targets using a complete arsenal of techniques in innovative and
even unorthodox ways.