Iraq contained but not resolved 10 years on

By Paul Taylor

LONDON (Reuters): Ten years after a U.S.-led coalition unleashed Operation Desert Storm to drive Iraqi troops out of Kuwait, Iraq is a problem contained but not resolved.

President Saddam Hussein's grip on power in Baghdad seems stronger than ever despite a decade of United Nations economic sanctions, de facto Kurdish control over northern Iraq and unsubstantiated rumors of failing health.

But in the phrase of outgoing U.S. Secretary of State Madeleine Albright, Saddam is "in his box" for the foreseeable future.

Iraq, which invaded Iran in 1980 and Kuwait in 1990, no longer poses an immediate threat to its neighbors, analysts say. Nor does it seem in danger of an implosion that could suck in other regional powers, despite the heavy toll of sanctions.

Iraqi society has been impoverished and the country's relatively advanced health, education and welfare programs decimated by the embargo, but the state remains strong, says Charles Tripp, author of a new History of Iraq.

"Iraq has proved remarkably resilient as a state. It is not a basket case by any means," said Tripp of London University's School of Oriental and African Studies.

Tripp said Iraqi opposition reports that Saddam, 63, is suffering from lymph cancer or recently had a stroke appeared to be the product of wishful thinking or despair at the failure to remove him.

It was quite likely that the authoritarian president, in power since 1978, would die in his bed and be succeeded, at least initially, by his younger son Qusay, who controls key security services, he said.

In a system built on violence, there is always a chance of an assassination or a coup, Tripp said, but Saddam has shown great ruthlessness in having suspected plotters arrested, tortured and executed.

The Gulf War coalition of Western and Arab states built by the father of incoming U.S. President George W. Bush has fallen apart but the core UN sanctions remain in place.

The United States and Britain are now alone in enforcing the military containment and political isolation of Iraq amid a rising clamor from the Arab world, France and Russia for an end to the economic punishment of the Iraqi people.

Washington and London have spent billions of dollars policing sanctions, patrolling no-fly zones over northern and southern Iraq and funding opposition groups but they have failed to oust Saddam -- the declared aim of U.S. policy since 1997.

The exiled Iraqi opposition is weak and divided. The Kurds, when they are not fighting each other, care only about keeping control of their own region of northern Iraq. And none of Iraq's Arab neighbors wants to see the Iranian-backed Shi'ite Muslim opposition to Saddam's Sunni-dominated rule prevail.

The Iraqi leader continues to defy UN resolutions on the elimination of Baghdad's suspected weapons of mass destruction.

A UN Special Commission (UNSCOM) on disarmament made big strides in the mid-1990s in locating and destroying munitions, missiles and production facilities, despite Iraqi obstruction.

But the last arms inspectors left Iraq more than two years ago without being allowed to complete their mission of checking on suspected chemical and biological weapons programs.

Saddam has refused to let them back since the United States and Britain staged four days of air raids in December 1988 to punish Baghdad for blocking UNSCOM's work.

In a low-key war of attrition, U.S. and British warplanes have routinely bombed Iraqi targets since then in response to what Washington and London say are challenges to the no-fly zones imposed by the West officially to protect Kurdish and Shi'ite Muslim civilians.

British officials say privately they will try to persuade the incoming Bush administration to stop the southern air patrols, which they say are costly, risky and a source of growing public resentment in Saudi Arabia.

The 10th anniversary of "the Mother of All Battles" offers little cause for celebration beyond the borders of Kuwait.

Iraq's Gulf Arab neighbors have spent tens of billions of dollars on high-tech U.S. and European weaponry over the last decade but still feel insecure and remain uncomfortably dependent on Western military protection.

Their discomfort level has increased since the second Palestinian Intifada erupted last year, fanning public anger at perceived U.S. bias towards Israel and causing most Arab governments to move closer to Iraq and erode sanctions.

The sanctions give the United Nations control of how Iraq spends its oil revenues, restricting purchases mainly to food and medicine and syphoning off a quarter to compensate Kuwait and meet UN costs.

They also prevent foreign investment to develop Iraqi oil reserves, the world's second largest.

Iraq manages to smuggle small amounts of oil products out through Turkey, Iran and now allegedly Syria, providing Saddam with sufficient income to reward key loyalists.

But his efforts to break out of sanctions by forcing lifters to pay a surcharge for Iraqi crude outside U.N. control have failed so far.

The growing anti-Western mood in the Middle East, coupled with pressure from Security Council powers France, Russia and China, is fuelling pressure to end the embargo but U.S. Secretary of State-designate Colin Powell has vowed to "re-energize" sanctions.

British officials are looking at ways to target sanctions more specifically at military and dual-use items while allowing civilian goods to be imported more easily.

But neither Washington nor London is willing to give up the UN financial control on Iraqi oil revenues, for fear that Saddam will use the money to rearm and start throwing his weight around again.

"Sanctions didn't get Saddam out of Kuwait, they haven't made him disarm and they haven't brought him down. The current situation undermines the credibility of the UN and the United States," Tripp said.

"The question is whether they can target sanctions more effectively without seeming to have lost the whole game."