Reparations for Iraq

My piece from last week’s Fin is over the Fold. Report on the Rowat study is here.

Iraq exit will also be costly

The costs of the Iraq war have been huge, but some have received more attention, and been estimated more precisely, than others. The number of US troops who have died in Iraq (2784 as of 24 October) is precisely documented. By contrast, there is very little evidence on how many Iraqis have died.

Analysis of media reports gives documented evidence for nearly 50 000 civilian deaths since the war began, but with journalists unable to reach large parts of Iraq, this is obviously a minimum estimate. A recent survey, based on methods used in other war zones, has yielded an estimate of between … and … excess deaths. This estimate has been hotly disputed, but no-one has been able to produce a soundly-based alternative number.

There is a similar disparity in the analysis of the economic effects of the war. The cost to to the United States has been much debated, with estimates of the ultimate bill ranging between 1 trillion and 2 trillion. However, the direct costs to the budget so far can be measured reasonably precisely at around $500 billion, and the range of estimates largely reflects uncertainty about the future.

By contrast, even basic data on the Iraqi economy is hard to obtain, and often of dubious quality. Even information on something as directly measurable as electricity supply has become a political football. The now-defunct ‘Good News from Iraq’ website reported at least a dozen announcements during 2004 and 2005 that supplies had surpassed the prewar level and that new additions to the grid were imminent. Similar claims continued into 2006, with President Bush saying that

According to the State Department’s latest weekly, power supply over the last few weeks has been close to the pre-war level (sometimes above, sometimes below). Availability in Baghdad averages six hours per day.

If data on electricity supply is problematic, analysis of the impact of the war on economic activity as a whole is even more so. The first attempt has recently been made by Colin Rowat, a specialist on the Iraqi economy at the University of Birmingham in Britain. He estimates that the war has reduced Iraq’s national income by 40 per cent, or between $25 billion and $30 billion per year.

The big cost arises from the failure to bring oil output back to prewar levels. Thus Iraq has effectively missed out on the boom enjoyed by other oil exporting countries, which could have been expected to increase GDP by around 50 per cent.

Of course, the war itself contributed to the runup in oil prices, so this number may be an overestimate. And while most of the benefit of higher prices would have flowed to the Iraqi people through the Oil-for-Food program, Saddam Hussein would undoubtedly have continued to cream off a significant proportion, with the aid of international collaborators like Australia’s AWB.

But the change in gross income is only part of the story. While available income has diminished, the cost of doing almost anything has been increased by war, corruption and mismanagement. According to a report from the Special Inspector General for Iraq Reconstruction, overhead costs chewed up as much as half of the $18 billion of US aid before anything was done on the ground.

The current position of the US Administration is that having spent $18 billion, it has no more to give. Yet, there is a clear moral obligation arising from having chosen to start this war. More relevantly, perhaps, financial reparations for the damage done by the war might improve the chances of an exit strategy.

One of the biggest problems with proposals for more regional autonomy is that the Sunni regions have little or no oil. Thus, there is likely to be bitter fighting over access to oil-rich areas like Kirkuk. If the US committed itself to a continuing stream of aid of say, $20 billion a year for the next decade, it might find the Sunnis and others keener to support local authorities who could receive and distribute that aid. Given the inevitability of corruption and graft, it’s not a perfect option, but at this point there are no good options, only more or less bad ones.

Finally, what about Australia? We were among the first countries to join the ‘Coalition of the Willing’ and have been among the most steadfast backers of ‘staying the course’. If a change of direction requires a financial contribution, we will no doubt be called upon to pay our share of the bill.

16 thoughts on “Reparations for Iraq

  1. I wonder if the war planners, when they allocated targets in the first ‘shock and awe’ part of the campaign, didn’t think about the suffering they were creating with every target. Hitting, for example, power stations instead of sub-stations (which are presumably much easier to fix) and railway junctions instead of railway stock and stations. Bridge approaches instead of bridges (or even noting that the Republican Guard wasn’t going anywhere and a bridge could stay open).

  2. “According to the State Department’s latest weekly, power supply over the last few weeks has been close to the pre-war level (sometimes above, sometimes below). Availability in Baghdad averages six hours per day.”

    I don’t think 6 hours a day is anywhere remotely near pre-war levels! More like 25% of pre-war levels (and the question then arises, is this available during peak hours?).

  3. I believe an Ansett style levy should be raised on all supporters of the war in Iraq(including all members of the Liberal party for example) along a user- despoilers-pays system.

    This way the rest of us could have an economic advantage to compete in, say, the housing market, while the dupes, fakes and whores get their economic comeuppance.

    The real problem is that those taking the decisions and those supporting their ignorant leadership receive no signal from the market on the issue, and as they only understand hip pocket impact rather than ethical or moral concerns, a levy is the way to go…

    On the Ansett levy, I refused to fly when this was in effect, mostly because it target all traveller when it shold have only targetted people who had flown Ansett, a company which was subsidised by many years by pro-market Liberal Party members who would not fly the competition as it was a Communist threat.

    Unless of course you do not bellieve in user-pays.

    Why the hell should I pay for the iodicy of the howard government, its bad enough that my descendent while have to compete in the future affected by gloabl warming with the descendants of Howard et al.

    Bring back dynastic elimination I say.

  4. I believe the latest study’s Iraq casualty figures were between 300,000 and 655,000. As Riverbend recently reminded people, the warmongers used to love telling everybody how Saddam had killed 300,000 people – so by a certain logic this makes the invaders at least as “evil” as him, if not worse.

    If you want to add the UN sanctions figures on top of that, the number of dead is potentially well over a million. Then you can add the wounded, the homeless, the exiled… And that is only the human cost!

    There is a stark air of unreality surrounding talk of a withdrawal from Iraq, because our leaders have yet to acknowledge anything more vague than “mistakes were made”. Iraqis deserve not only financial reparations but also whole-hearted apologies from Bush, Blair and Howard, not to mention all those who supported and enabled them.

    I do not see how we can have anything like a viable exit strategy when we still have no accountability for the reasons why we went to war in the first place.

    The best thing, it seems to me, would be a quick exit followed by a Royal Commission (in Australia) which would include the role of the media, intelligence agencies, government, business and the military.

    This is the single greatest disgrace in modern Australian history, on a par with the slaughter of our original indigenous inhabitants. Shame on all of us who have lived to see it.

  5. Actually, the estimate is between 390,000 and 940,000 deaths, with 655,000 being the most likely value.

  6. To suggest that we leave and then compensate them seems a little odd. Surely if one of the things they want from us (as expressed by their democratically elected government) is assistance in re-establishing internal security then this is surely the most obvious first form of charity (or compensation) we should extend. If after that they expect further forms of charity (or compensation) then that is a separate matter.

  7. Terje,

    Are you being serious, or quite deliberately obtuse? The Devil has many advocates, bro’ – he don’t need no more!

  8. Gandi,

    If they ask for help in this regard then why should it be refused? I would think that in terms of moral obligations this ranks pretty high.


  9. It would be an interesting exercise to tabulate or graph the prevalence of the many arguments used by war proponents (can we call them ‘mongers’) in favour of the whole bloody fiasco.

    Such a table would look a bit like the diagrams generated by paleontologists showing the prevalence of certain families, genera and species of dinosaurs over geological time – you know, sauropods appear in the late Triassic, reach their zenith of population and species diversity in the late Jurassic, and decline during the Cretaceous to a point beyond which no fossils are found – ie extinct.

    We could in this way plot the ‘smoking gun = mushroom cloud’ nonsense (species?) from its birth out of Condy’s lips in December 2002 through to its extinction some time in August-September 2003. The general WMD argument (genus?) emerged from the primordial slime at some time in the late 1990s and remains, monotreme-like, as a living fossil inhabiting trailer parks and Christian Zionist chapels in isolated pockets of the former Confederate States of America.

    The family of ‘Iraqi Freedom’ arguments, ranging from the ‘Good News From Iraq’ website dinosaur through to the ‘at least we got rid of Saddam’ hardy mouse-like critter, emerged as a dominant life-form about June of 2003 and appears destined to survive, if at all, only among the terminally credulous and purblind. It seems to be disappearing in what were once its most productive habitats – the writings of right-wing ratbags of the Bolt and Blair (both Tim and Tony) ilk. Even as they fulminate about the inaccuracy of the Lancet estimate, the ‘Iraqi Freedom’ line is being quietly snuffed out. It may in the end survive only in the alcohol-fuelled ravings of Christopher Hitchens.

    The last productive line of what was once a world-bestriding order is the ‘stay the course’ family, now by and large limited to the ‘if we got out now things would be even worse’ jackal-like species. Its days are numbered, as Iraq comes more and more to resemble Rwanda or Somalia,

  10. Terje,

    When you invade and occupy another country, you have a moral obligation to its citizens to provide security. That is not charity, it’s responsibility under international law.

    Sadly, the US-led coalition has never been able to provide this security. Perhaps if (in the very beginning) they had given clear indications that they were going to leave one day (instead of securing oil pipelines and building massive military bases), things might have been different. But now over 90% or Iraqis now want us out of their country.

    It’s time to go.

    This nonsense about providing security is a lie, and the talk of withdrawal is just designed to placate the voters short-term, while Big Oil completes its oil-grabbing plans.

  11. Ghandi,

    Bush was clear early on (at least in his public statements) that they did not intend occupying the place long term. That may have been a lie but who can be sure. At least the rhetoric was correct.
    Don’t forget that Bremer cooked up a democratisation strategy that spanned 3-4 years and first Rumsfield and then the president said no because they wanted to exit more quickly (ie some time in 2004). Bremer may have been right but it is hard to argue that Bush was keen for a long stay. It is more realistic to observe that they had to stay longer because circumstances on the ground made their timetable for withdrawing less tennable.

    I agree that if 90% of Iraqis want the coalition to get out then we should leave. However I have not seen any poll that says they want us to leave this week. Most seem to refer to a six month timeframe. And I do still think it is the Iraqi government that should make the decision given that it will be the one to assume responsibility for security.

    As far as international law goes I accept your point however I think you perhaps missed that I was using the word “charity” in a deliberately loose manner.

    Broadly speaking I don’t think we disagree on the Iraq war or on how to proceed. And if we do disagree I would say it is only on minor tactical issues and timing.


  12. Terje,

    Bush has never – NEVER – made an unambiguous commitment to a full withdrawal, and neither has anyone else in his administration, nor the US military, nor even the US Democrats. Even today, the talk of withdrawal remains ominously lacking in specifics.

    It is quite clear to Iraqis and neighbouring countries that the huge military bases around Iraq, and the massive Green Zone “embassy”, are here to stay. Nobody has ever even discussed handing them over to Iraqis. Likewise, the Iraqi army still lacks heavy armoured weaponry and there is no sign of them getting anything soon. In such circumstances, the Iraqi government will always remain puppets.

    I also think your reading of Bremer’s intentions may be clouded by your own perceptions at the time. The fact that his CPA was so incoherent and inept may also have contributed to any misunderstanding. Their plan was always simple: install puppets, secure the oil for the USA, build a military foothold in the ME, and then declare victory and move on to the next war. It just didn’t pan out right for them.

  13. This is what Bush said in May 2004:-

    Iraqis are proud people who resent foreign control of their affairs, just as we would. After decades under the tyrant, they are also reluctant to trust authority. By keeping our promise on June 30th, the coalition will demonstrate that we have no interest in occupation.

    I saw a recent interview with Bremer and he said he was very frustrated with the different view of things that Rumsfield and the President had at the time. He said they were pushing him hard for a quick hand over of government and he thought it should be done over a longer timeframe. I agree with your assertion that there was a lot of ineptitude at the time. And I can’t find anything to contradict your claim that Bush has never made an unambiguous commitment to a full troop withdrawal, so you are probably correct on that point.

    Their plan was always simple: install puppets, secure the oil for the USA, build a military foothold in the ME, and then declare victory and move on to the next war.

    I would agree that they wanted a sympathetic government but I am not sure when you would call that a puppet. Does the USA have a puppet government in Australia? As for building a military foothold in the ME they already had that in Saudi Arabia.

    In terms of “secure the oil for the USA” what does this statement really mean? Do you mean that the USA was going to then be able to buy Iraqi oil below the world price?

  14. Does the USA have a puppet government in Australia?

    Yes, but only until the next election.

    As for building a military foothold in the ME they already had that in Saudi Arabia.

    Not like they thought they could establish in Iraq. Saudi is a fragile tribal religious powder-keg of an oil pardner. Iraq was supposed to become a liberal, secular westernised oil pardner. What the heck were Wolfowitz and Cheney thinking?

  15. Dear John

    I would insist that we should pay our share of war reparations, even if some have to move into a smaller Mcmansion, drive fewer kms in the urban assault vehicle (and hopefully trade down to a hybrid 4 cyl) and throw away fewer plastic bags. Australians will have to learn to take more notice of what their government is doing.

    One of our problems, as discussed by Kate Burton, is that our foreign policy is too much subject to secrecy. Kevin Rudd says that he will differentiate our foreign policy from that or the USA more than the present governmnet. Should we start taking b*ts on this?

    Willy Bach

  16. Terje,

    It’s a symantic minefield, isn’t it, discussing these issues? When I said “secure the oil for the USA” I should have said “secure the oil for Dick Cheney’s US-based Big Oil friends” but even that is a gross over-simplification.

    It’s a global game of oil control. Obviously, a main aim is to keep oil trading in US dollars. Another is to be able to control global oil prices, as well as the voracious US market on which they feed. If China and India are also forced to buy oil in US dollars, so much the better for Cheney’s friends. It’s not a question of selling below the market in the USA, but feeding the US economic beast – perhaps ultimately at the expense of others who do play ball with the White House & friends.

    I think some in the US government believe they are pursuing the noble goal of securing US economic intests for generations to come, but those who really control things are just chasing money and power however they can get them. Bush told Rush Limbaugh the other day that terrorists could “blackmail” the USA (eg into abandoning Israel) if they controlled Iraq’s oil. Bush & Co want to be doing the blackmailing, and the profiteering. It’s the ugly side of economic globalization at its worst.

    As for Saudi Arabia, it’s seldom mentioned that one of Osama’s main demands after 9/11 was removal of US forces from that country. This demand was quickly and quietly met, largely because Bush & Co thought Iraq would be a slam dunk (certainly easier than fighting off angry mobs in Saudi, which would further destabilize their House of Saud oil partners).

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