One of the curious developments in the aftermath of the Iraq war has been the fight over who will get contracts for the reconstruction of Iraq. It?s curious because, so far at least, the only money that has been put up to fund this reconstruction is $US2.3 billion included in the Bush?s $US73 billion war appropriation. This is a fair sum of money, but scarcely the stuff of an international incident. It?s important, then, to consider how much Iraqi reconstruction is likely to cost and where the money is going to come from.
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This NYT report gives ground for a pessimistic view about SARS, but has some credibility problems. It begins:

The death rate from SARS may be significantly higher than health officials had thought, up to 55 percent in people 60 and older, and up to 13.2 percent in younger people, the first major epidemiological study of the disease suggests.

Mortality rates are bound to change somewhat as an epidemic continues. But unless the numbers fall drastically, SARS would be among infectious diseases with the highest death rates. Until now, fatality rates reported by the World Health Organization had ranged from 2 percent, when the epidemic was first detected in March, to 7.2 percent.

The new findings come from a statistical analysis of 1,425 patients suspected of having SARS who were admitted to Hong Kong hospitals from Feb. 20 to April 15. Over all, their mortality rate was estimated to be as high as 19.9 percent. By contrast, the influenza pandemic of 1918, which killed tens of millions of people worldwide, had an estimated mortality rate, over all, of 1 percent or less.

Let’s look at the last number. If a disease that kills ten million people has a mortality rate of 1 per cent, the number infected is 1 billion. The report is inexact, but clearly implies that several times that many people were killed and that the mortality rate was below 1 per cent. The world population in 1920 was less than 2 billion.

Obviously something is wrong here. This doesn’t mean that the estimates quoted about SARS are wrong, but it would be useful to have a better baseline for comparison.

My piece in todays Fin (subscription required) is about the opportunity cost of the war on Iraq. An excerpt

In the absence of large-scale discoveries of weapons, attention has focused on the undoubted benefits of overthrowing an evil and oppressive dictator. This is a form of foreign aid and can usefully be compared to other aid programs. The total budget of USAID, the main US agency for development and humanitarian assistance is $8.7 billion for the coming year. That is, the money already spent on the Iraq war could have doubled USAID’s budget for the next five years.

It seems certain, however, that the war will herald a sustained increase in military expenditure of at least $US100 billion per year. A more reasonable comparison, therefore, is the ambitious proposal of the Commission on Macroeconomics and Health, led by Harvard Economist Jeffrey Sachs. The Commission aimed to achieve, for all a poor countries, a two-thirds reduction of 1990 child mortality levels, a three-fourths reduction of 1990 maternal mortality ratios and an end to the rising prevalence of major diseases, especially HIV/AIDS.

As the Commission pointed out, in addition to the humanitarian benefits of saving as many as 8 million lives per year, reductions in mortality are directly correlated with a reduced frequency of military coups and state collapse. These provide the breeding ground for terrorism and dictatorship and ultimately lead, in many cases, lead to US military intervention. The estimated cost for the Commission’s seemingly-utopian program over the next decade is estimated at between $US 50 billion and $US 100 billion per year.

War is sometimes necessary in self-defence. But when war is adopted as an instrument of policy, it is often counterproductive and almost never cost-effective.