First of all, they'll be stunned to find that Saddam surrendered meekly rather than die fighting the Americans, as he has urged his followers. Second, his detention following the killing earlier this year of his sons, Uday and Qusay, will dash what hopes remain of the Baathist regime returning anytime soon. Those carrying out attacks will now have to ask themselves if there's any point risking their lives for what looks increasingly like a hopeless cause.
The question is whether the U.S. can seize on this breakthrough to correct the flaws in its post-invasion policies. Just capturing Saddam won't be enough. Despite Iraq's abysmal performance as a state over the last few decades, nationalist sentiments run much stronger among Iraqis than the Bush Administration reckoned before the March invasion. The insurgency has been feeding off those emotions for months.
BIGGER PAYDAYS. The only way to blunt resistance motivated by nationalism may be to reduce the American profile and turn over more power to Iraqis. That's exactly what the U.S. is trying to do with its commitment to transfer a substantial degree of authority to Iraqis by next summer and by training tens of thousands of Iraqi military and police personnel. The U.S. also plans to pump substantial sums into the Iraqi economy. Already, salaries of lower-level civil servants have been raised more than tenfold. Such hikes are bound to improve the public mood.
Not all is doom and gloom in Iraq. The northern, Kurdish-dominated region is calm and prospering following the regime's demise. Markets are well-stocked, homebuilding is booming, and -- except for jubilant Iraqis celebrating Saddam's capture -- the only people carrying guns are those authorized to do so. A few days ago, the main road from the Kurdish city of Irbil to the oil city of Kirkuk and on to the handsome valley town of Sulaimaniya hummed with traffic as people went about their normal, daily business.
The real test will come as the U.S. hands increasing responsibility to Iraqis. So far, the Governing Council, a group of senior Iraqis appointed by chief U.S. administrator Paul Bremer, has preserved a united front. But Bremer has largely made the big decisions so far. When more power is at stake, the temptation to fight for it will grow.
THREATENING SCENARIO. The capitals of surrounding countries are looking on with mixed feelings. No Arab leader is sorry to be rid of Saddam, and some -- such as the Kuwaitis -- are undoubtedly enjoying the spectacle of seeing him humiliated. But the more repressive among them have to be worried by the precedent of having one of their peers ousted and then jailed with the intent of eventually putting him on trial for human rights abuses and war crimes.
Only Kuwait, Qatar, and Jordan have been notably active in helping Iraq so far. Along with serving as the major staging area for earlier military operations, Kuwait has already given about $1 billion in economic assistance. Qatar, the tiny Arabian peninsula country, which served as the locus of U.S. military headquarters in the Gulf, also is still providing backup. And Jordan is offering logistics support, including the scheduled training of 500 Iraqi police officers.
The other Arab nations are watching the outcome. For regimes such as those of Syria and even Saudi Arabia, a messy situation in Iraq isn't such a bad thing. They can say, "We warned of the dangers of intervening in an Arab country."
However, a successful, democratic Iraq, as distant as that outcome might still seem, would be much more threatening to the Syrian and Saudi regimes. Now, Saddam's capture gives that scenario a better chance at clarity than it has had since Iraqis cheered the fall of Saddam's statute eight months ago. Reed, BusinessWeek's London bureau manager, has extensive experience covering the Middle East, just returned from a trip to Iraq on Dec. 10