Saddam consolidated power in a nation riddled with profound tensions. Long before Saddam, Iraq had been split along social, ethnic, religious, and economic fault lines: Sunni versus Shi'ite, Arab versus Kurd, tribal chief versus urban merchant, nomad versus peasant. Stable rule in a country rife with factionalism required the improvement of living standards. Saddam moved up the ranks in the new government by aiding attempts to strengthen and unify the Ba'ath party and taking a leading role in addressing the country's major domestic problems and expanding the party's following.

Saddam actively fostered the modernization of the Iraqi economy along with the creation of a strong security apparatus to prevent coups within the power structure and insurrections apart from it. Ever concerned with broadening his base of support among the diverse elements of Iraqi society and mobilizing mass support, he closely followed the administration of state welfare and development programs.

At the center of this strategy was Iraq's oil. On June 1, 1972, Saddam oversaw the seizure of international oil interests, which, at the time, had a monopoly on the country's oil. A year later, world oil prices rose dramatically as a result of the 1973 energy crisis, and skyrocketing revenues enabled Saddam to expand his agenda.

Within just a few years, Iraq was providing social services that were unprecedented among Middle Eastern countries. Saddam established and controlled the "National Campaign for the Eradication of Illiteracy" and the campaign for "Compulsory Free Education in Iraq," and largely under his auspices, the government established universal free schooling up to the highest education levels; hundreds of thousands learned to read in the years following the initiation of the program. The government also supported families of soldiers, granted free hospitalization to everyone, and gave subsidies to farmers. Iraq created one of the most modernized public-health systems in the Middle East, earning Saddam an award from the United Nations Educational, Scientific and Cultural Organization (UNESCO).