Thursday. 24 April 2014

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USSR was offered $30bn loans for troops against Iraq

Businessman made offer from two former Japanese PMs over Kuwait crisis

Up to $30 billion in loans were offered to the Soviets in 1990 in return for sending troops to help remove Iraq from Kuwait. The astonishing offer – apparently conveyed by a leading businessman on behalf of two former Japanese prime ministers – is revealed in secret documents unearthed by Exaro from a Soviet archive.

Exaro has had some of the material translated from Russian to English, and the documents shed light on a major event in modern history. Exaro revealed other documents from the same archive last month that showed how America secretly took part in an audacious Soviet plan to strike a peace deal with Saddam Hussein, then Iraq’s president, that would have stopped the outbreak of the Gulf War of 1990-1991.

The offer to Moscow was for Japan to provide loans of $20 billion to $30 billion if the USSR would deploy between 50,000 and 100,000 troops in the Gulf.

Under the deal, the link between loans and troop deployment would be kept secret, but the Soviets would also have had to return four islands in the Pacific Ocean captured from Japan by the Soviets after World War II.

According to the documents, the offer was conveyed by Shin Kyuk-Ho, the South Korean billionaire businessman, founder and chief executive of the Seoul-based multinational conglomerate, Lotte Group. He set out the proposals to Vadim Medvedev, who was secretary of the central committee of the Communist Party of the Soviet Union.

A meeting between the two took place in Seoul in November 1990, three months after Iraq invaded Kuwait. Medvedev had gone to the South Korean capital to negotiate a $4 billion loan to the Soviet Union.

After returning to Moscow, he wrote a report on the proposals to Mikhail Gorbachev, then Soviet president. The report is highlighted in a book, ‘Behind the Desert Storm’, due to be published later this summer.

Gorbachev rejected the offer, and the US led a military assault on Iraq – without the help of Soviet troops – two months later.

However, Gorbachev was more receptive to the idea of developing closer business ties with Seoul. In a separate memo, Gorbachev’s foreign policy adviser, Anatoly Chernyaev, advised him to discuss this with another South Korean billionaire businessman, the late Chung Ju-yung, the founder and then head of the Hyundai group.

Pavel Stroilov is a Russian journalist and political exile living in London, and author of ‘Behind the Desert Storm’. Additional reporting by Alanah Eriksen.

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