No Prosperity, No Peace: The Iraqi Economy and Instability

Saddam Hussein’s Iraq witnessed hundreds of thousands of its conscripted soldiers return from the battlefield with weapons in hand and no jobs in sight when the devastating Iran-Iraq war concluded with a stalemate in 1988. The country owed $130 billion in foreign debt; it had sliced its oil income by nearly 40 percent; it essentially claimed its neighbors were committing acts of economic warfare against it. The financial disarray further inflamed Iraq’s sizable and already-marginalized groups such as the Kurds and Shi’as. To restore relative economic stability and maintain his grip on power, Saddam invaded Kuwait in 1991