Bet. 1980-88 Iraq engaged in bloody and expensive war w/ Iran.By end Iraq owed nearly $100 billion.
To compound economic crisis main source of foreign revenue from oil: prices fallen and crisis threatened political survival of Iraq's dictator Saddam Hussein.
Iraq had reasonable relations w/ non- Middle Eastern powers. USA keen to have ally after fall of Pro-US Shah of Iran in 79. By 1990 US provided $3 billion worth of trade.
Despite this, W-states reluctant to provide financial assistance due to Saddams bad human rights record.
Little hope of help from USSR as own economy under severe pressure.
Regionally, allies were Jordan and PLO: Saddam had borrowed heavily from Gulf states in war w/ Iran but by 1990 clear debts couldnt be repaid.
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