Iraq announces its intention to fire upon U.S. and British warplanes that patrol the northern and southern no-fly zones.
Ba'athist Iraq, formally the Iraqi Republic until 6 January 1992 and the Republic of Iraq thereafter, covers the national history of Iraq between 1968 and 2003 under the rule of the Arab Socialist Ba'ath Party. This period began with high economic growth and soaring prosperity, but ended with Iraq facing social, political, and economic stagnation. The average annual income decreased both because of external factors and the internal policies of the Iraqi government.
Iraqi President Abdul Rahman Arif and Iraqi Prime Minister Tahir Yahya were ousted during the 17 July coup d'état led by Ahmed Hassan al-Bakr of the Ba'ath Party, which had previously held power in 1963 and was led primarily by al-Bakr—who served as its leader—and Saddam Hussein. Saddam, through his post as chief of the party's intelligence services, became the country's de facto leader by the mid-1970s. During al-Bakr's de jure rule, the country's economy grew, and Iraq's standing within the Arab world increased. However, several internal factors were threatening the country's stability, among them being the government's conflict with various factions of the Iraqi Shia Muslim community as well as with the Iraqi Kurdish community in the north (see Shia–Sunni sectarian violence in Iraq and the Iraqi–Kurdish conflict). Additionally, Iraq's conflict with the neighbouring Imperial State of Iran due to bilateral border disputes over the Shatt al-Arab waterway served as a major external threat to the country's stability due to Iran's backing of Kurdish rebels in northern Iraq.
After dismissing al-Bakr in 1979, Saddam officially succeeded him as the fifth President of Iraq, as Chairman of the Revolutionary Command Council, and as Prime Minister and General Secretary of the Regional Command of the Ba'ath Party. Saddam's seizure of power occurred during a wave of anti-government protests in Iraq, which were led by Shias. The Ba'ath Party, which was officially secular in nature, harshly repressed the protests. Another policy change during this time was in Iraq's foreign policy towards Iran, a Shia-majority country which had recently undergone a major revolution that ousted the Shah, Mohammed Reza Pahlavi, and established a theocratic Islamic state led by the Shia clergy with Ruhollah Khomeini serving as its Supreme Leader. Rapidly deteriorating relations eventually led to the Iran–Iraq War by 1980, which began following the Iraqi invasion of Iran in September 1980. After the 1979 Islamic Revolution, the Iraqi leadership believed that Iran's internal post-revolutionary chaos had made the Iranians militarily weak, and thus a relatively easy target for the Iraqi military, which had until this point struggled to combat Iranian forces under the Shah. This notion proved to be incorrect, and the war lasted for eight years; the economy of Iraq deteriorated during this period, and the country became dependent on foreign loans to fund its war effort. The conflict ended in a stalemate when a United Nations Security Council-mandated ceasefire was accepted by both sides in 1988, which resulted in a status quo ante bellum.
When the war ended, Iraq was in the midst of an economic depression, owed millions of dollars to foreign countries, and was unable to repay its creditors. During this time, Kuwait deliberately increased its oil output, greatly reducing international oil prices and further weakening the Iraqi economy while exerting pressure on the Iraqi leadership to pay back its loans. During bilateral negotiations, Iraq began exerting pressure on the Kuwaiti leadership to reduce its oil output and also accused Kuwait of cross-border slant drilling to steal Iraqi oil. The Iraqi leadership threatened military action if Kuwait did not make amends and demanded compensation for the violation of its sovereignty. Negotiations eventually broke down, and resulted in the Iraqi invasion of Kuwait on 2 August 1990. The resulting international response by a United States-led coalition led to the Persian Gulf War, which Iraq lost. The United Nations (UN) initiated economic sanctions against Iraq in the war's aftermath to weaken the Ba'athist regime. The country's economic conditions worsened during the 1990s, but by the early 2000s, the Iraqi economy started to grow again as several countries began to ignore UN sanctions. In the aftermath of the September 11 attacks on American soil by al-Qaeda, the United States proclaimed a "War on Terror" and labelled Iraq as part of an "Axis of Evil". In 2003, United States-led coalition forces invaded Iraq, and the Ba'athist Iraqi regime was deposed less than a month later.