How the United States Can Free Itself From a Costly, Unrewarding Gulf Policy : Foreign affairs: Gulf security may be enhanced if the sanctions against the Kurds are lifted and Iran is encouraged to play a stronger role.

Three years ago this week, the world faced its first post-Cold War test, as Saddam Hussein’s forces swept into and then swallowed Kuwait. In its response--a punishing 42-day air assault, then a precision 100-hour ground war--the world supposedly established an efficient new model for future warfare.

In military terms, the stated goals were swiftly and easily achieved. Yet today, the United States remains enmeshed in the Gulf. And the issue is not just Hussein’s lingering presence.

There’s also no imminent prospect of extrication from Operation Provide Comfort in northern Kurdistan or Operation Southern Watch in the Shiite-dominated south. And the U.S. Navy must keep seven to 15 warships nearby because, under present circumstances, the United States will have to defend the Persian Gulf indefinitely. The area is too vast and too valuable, its strategic assets too scattered and its population too small to go it alone.

Meanwhile, costs are mounting. Since the war ended, Washington has given $48 million just for U.N. monitoring. That sum doesn’t include the price of relief efforts, disarming Iraq’s deadliest weapons, intelligence gathering and other postwar commitments. And the United States long ago went through the $53.6 billion donated by Gulf and European allies.

In other words, the prolonged and costly sequel to Operation Desert Storm is anything but a model for the New World. Indeed, it’s setting dangerous precedents for other post-Cold War crises.

So what now?

In his first six months, President Bill Clinton picked up where President George Bush left off on Iraq, but expanded policy on the Gulf. In May, U.S. officials announced a new policy of “dual containment” for both Iraq and Iran.

In fact, however, it doesn’t really “contain” either country. And there’s nothing dual or symmetrical about it.

In Iraq, Washington’s goal is to see Hussein toppled and his system replaced by a democracy--which is much more than containment. In Iran, it is to pressure Tehran, by restricting its foreign trade, to honor human rights and to abandon arms development and aggressive actions abroad--or less than containment.

As a policy, containment--or preventing the spread of something--is better applied to ideologies than to states. Containment worked against communism, but “dual containment” is unlikely to be a viable or effective policy in the Gulf.

So, three years after Iraq’s invasion, the time has come to initiate a more creative postwar policy. It’s urgently needed to expedite U.S. interests in Iraq and Iran, to ensure broader Gulf security for free flow of oil and to cut costs and manpower.

But it’s also needed to show how the world can--and should--deal with the endgame of post-Cold War crises.

Two initiatives suggest the kind of approaches to help end the Gulf impasse.

In Iraq, the United States could advocate lifting United Nations economic sanctions against the Kurds--a step serving many functions.

First, the Kurds live under greater restrictions than any group in Iraq. Besides U.N. sanctions, they must cope with Baghdad’s sanctions that isolate Kurdistan from Iraq’s resources.

The squeeze is now so severe that Hussein may achieve by economic means what he couldn’t militarily or politically--force the Kurds back under his control. Relief agencies predict the number of aid-dependent Kurds will soar from 700,000 to a million this winter.

But under U.N. provisions, help is restricted. Since the 1991 flight of more than a million Kurds to Turkey and Iran during Hussein’s reprisals for their uprising, intervention has been limited to humanitarian aid and monitoring Iraq’s skies. The world, for example, can’t buy Kurdish wheat--forcing the Kurds to sell to Baghdad at low prices and to accept Baghdad’s questionable new currency.

Lifting sanctions would help the Kurds fend for themselves. They could sell their current harvest for real money to the outside world, thereby helping to jump-start their economy, avert another humanitarian disaster this winter and diminish the financial drain on donors.

Second, liberating Kurdistan economically tightens the economic squeeze on Hussein, since Kurdish crops would no longer be available to him on his terms.

It might also force Baghdad to comply with U.N. resolutions 706 and 712, which allow Iraq to sell oil to pay for humanitarian goods. Hussein has balked, since profits would also compensate Kuwait and defray U.N. costs.

Third, a healthy Kurdistan linked to and doing business with the world could have political impact. It might motivate other Iraqis to do what the world has been long awaiting. Alternatively, to avoid losing the Kurds politically, it might force Hussein to act on reforms to accommodate Iraq’s non-Sunni Muslims.

To avert fears that the move would be the first step toward an independent Kurdistan, Washington could repeat its commitment to Iraq’s territorial integrity. It could make clear that lifting sanctions is a response to Hussein’s isolation of his people--and would last only until Iraq complied with U.N. resolutions and sanctions were lifted nationwide.

As for Turkey’s fears, exacerbated by clashes with its Kurds, three years have shown that, even with U.N. and U.S. protection, Iraq’s Kurds have not joined ethnic brethren elsewhere. After long separations, the fragmented Kurds are focused more on states that absorbed them than on an ethnic “nation.”

The incentive for the Turks is trade with the Kurds and international traffic via Turkey, since Iraqi routes are cut off. Prospects of prosperity usually enhance prospects of peace.

The second policy shift deals with both Iran and the issue of Gulf security.

The current Gulf crisis dates to Tehran’s 1979 revolution. It altered the balance of power and set in motion a chain of events, including the Iran-Iraq war, that aligned Gulf Arabs and Persians against each other. The conflict coalesced six otherwise disparate sheikhdoms into the Gulf Cooperation Council (GCC).

The rift was most severe on two fronts: Between Iran and Kuwait, which served as Iraq’s supply line for eight years. And between Iran and Saudi Arabia, which gave Iraq billions of petrodollars.

But since the war’s end in 1988, a series of tentative overtures, talks and visits have taken place to end Gulf divisions.

A threshold was crossed after Iraq’s invasion of Kuwait, when Iran condemned Iraq, talked with Kuwait, refused to return Iraqi planes, honored U.N. sanctions and did not challenge the U.S.-led coalition. Those steps marked the first tangible hope for Gulf detente in a decade.

The long-term U.S. goal should be to encourage and expedite that process, for the only way to ensure Gulf security without foreign intervention is to build a mechanism in which all parties participate to guarantee peace. That includes Iran, whose Gulf border is longer than all the other Gulf states’ combined.

Traditional wisdom holds that Iran will eventually be enticed to accept international norms of behavior through a relationship with the West, notably Europe. But with a thaw inside the Gulf, Gulf states offer an alternative route. And their preconditions on Iran are much tougher than the West’s.

Building a new regional relationship won’t be easy or fast. Indeed, Gulf detente has been on hold since 1991.

In the 1991 Damascus Declaration, the Gulf states agreed to turn to Egypt and Syria for military help, excluding Iran from a role in its own back yard. The pact has since faded into oblivion.

Iran, in turn, enraged Gulf Arabs by reasserting its claim to sovereignty on Abu Mousa, an island shared with the United Arab Emirates. Both sides have since backed away from a confrontation.

Gulf detente will thus require patience and phases, beginning with agreement on joint goals and confidence-building measures to prove good intent--particularly by Tehran.

Like the shah, the mullahs want a strong role in the region--an in-built incentive to meet GCC terms like non-intervention in internal affairs and non-aggression against regional borders. Security is vital to the trade Iran needs to revive its troubled economy.

Promoting Gulf detente and engaging rather than excluding Iran might yield other benefits, including lessening its interest in new arms. Tehran is rearming as it lost 40% of its arsenal during the Iran-Iraq war; its isolation during the conflict, even after a U.N. team proved Iraq’s use of chemical weapons, also makes it feel vulnerable. Defusing the causes of tension can defuse the effects.

Gulf detente might also entice Iraq. The prospect of a regional pact excluding Baghdad is a big incentive to take those steps required to be included.

Finally, the two initiatives could end the inertia now limiting movement to a series of tit-for-tat confrontations that Hussein often controls.

They will also serve as a signal that, while tenaciously following through on original commitments, the world can and will look for innovative ways to settle problems so that its energy and resources can be focused elsewhere.