What was Saddam Hussein's game plan for holding and controlling Kuwait and what was his justification for invading in the first place?

The lynchpin to Saddam's strategy for holding onto Kuwait rested upon his very skewed understanding of global politics and where Iraq stood within the international community. Iraq had garnered economic and military support from the various Gulf states during the Iran-Iraq War (for example, the Iraq Air Force had some dispersal airbases around the Gulf) and Saddam conflated this soft support with actual diplomatic strength. In 1989, the Saudis signed a non-aggression and military assistance pact with Iraq, and Saddam misconstrued as tacit Saudi approval of isolating Kuwait. He believed that since Iraq had protected the region from Iran, it would accept the price by acquiescing to the conquest of Kuwait. As Saddam explained to the Yemeni president in August 1990:

Iraq…who defends them [the Arabs] for ten years [and] they consider his defense as a liability against [Iraq]?…The time has come for every person to say…I’m Arabian…I’m Saddam Hussein…[If] Iraq will pay this amount of money to develop the Arab nation and to defend it [then] the other Arab countries must pay this amount of money…if they don’t we will fight them.

Saddam had hoped that overtures to various Gulf states would fracture any attempt by the Saudis and exile Kuwaitis to form a response against his invasion. Although there was some validity to this assessment of Arab unity, Saddam woefully underestimated the fact that his use of armed force to resolve differences with Kuwait unified political opinion against him within the region.

Further afield, Saddam also did not understand the geopolitical changes that happened in 1989. In November 1990, his foreign Minister Tariq Aziz gave him optimistic reports that Gorbachev was not in favor of military action and would act to restrain the Americans:

as I have shared my opinion with you, deducing that the Soviet Union has no interest in a war of this manner happening and at this large scale. Maybe at the beginning and at different intervals the idea of a surgical [military] operation came up. [T]o hit Iraq and force it to withdraw from Kuwait, as maybe a disciplinary move for Iraq; it possibly entered their mind, but when they saw the reality and the fact that the Iraqi power was not something they could control in days or weeks and that this war will lead to major destruction in the region and to political and economic imbalance; and because the Soviet Union is worried about Europe and has internal problems, sir, they couldn’t imagine that the situation would explode in the Middle East, seeing that it is their southern border. If a war of this manner happens the situation will explode, the Islamic factor, the nationalistic factor, the oil, and security all these would explode….and as Primakov said to you when you met, after you told him that we would hit Israel, that that was a nightmare they didn’t want to see…[A] nightmare to the Soviet Union, not out of love or care for us, but a nightmare.

Additionally, Saddam hoped that France, which had developed economic and military ties to Iraq, would also break apart the Coalition. Both of these estimates were off base. Although the USSR was not happy about Gulf War, it was more preoccupied with the domestic turmoil that was precipitating its breakup. A foreign intervention in the Middle East was the last thing Gorbachev needed, especially after the Afghanistan debacle. Aziz played up Mitterrand's ambiguous statements about the invasion and claimed that France would not jeopardize its domestic tranquility because of its large Muslim population. Attempting to use the French to split the Coalition had the opposite effect and the French behaved in a much more hardline fashion. In some ways, Saddam learned the wrong lesson from the fall of the Berlin wall; it made him feel that the age of the Superpowers was ending when instead it was leaving the US much greater latitude to act.

In short, Saddam believed that if he occupied Kuwait, it would be a diplomatic and military fait acompli. Iraqi strategy was that by turning Kuwait into a large fortified area, the Coalition would naturally fracture and Iraq's occupation would be assured. In a ministerial conference of August 1990, he said:

[W]e should focus on the historical event, such as the war between France and Germany in 1870 and during the First World War when France retrieved the Alsace Lorraine region and kept it united under regional policy laws, municipal laws, and autonomy after the First World War. France gradually extended its authority to this region until it became internationally and constitutionally part of France.

In hindsight, Saddam was naive and possessed a highly mistaken grasp of foreign affairs.

Sources

Sassoon, Joseph. Saddam Hussein's Ba'th Party: Inside an Authoritarian Regime. Cambridge: Cambridge University Press, 2011.

Woods, Kevin M. Iraqi Perspectives Project Phase II. Um Al-Ma'arik (The Mother of All Battles): Operational and Strategic Insights from an Iraqi Perspective, Volume 1 (Revised May 2008). Ft. Belvoir: Defense Technical Information Center, 2008. http://handle.dtic.mil/100.2/ADA484530.