Global Policy Forum

The US-led occupation has not brought prosperity to Iraq, but rather increased poverty and economic disparity. Ongoing security concerns have thwarted investment, while high unemployment has forced many impoverished Iraqis to sift through trash in search of food and salvageable goods. (Reuters)

Through 2005, the UK military has spent £5.06 billion on its operations in Iraq. The equivalent amount of money, the Iraq Analysis Groupreports, could be used to build 32 new hospitals, fund 7,500 new teachers for 10 years, or provide 2 years of full immunization to every child in the developing world.

In this joint report, the American Enterprise Institute and the Brookings Institutionprovide a comprehensive estimate of the direct costs, both present and future, of the war in Iraq. While US budgetary allocations for the war total $212 billion, "the actual direct cost…[includes] the opportunity cost of resources used in the conflict that cannot be used elsewhere and the welfare losses of those killed and wounded." At the time of publication this sum comes to $429 billion, while cost estimates through 2015 are projected to exceed $1 trillion.

Phyllis Bennis and Erik Leaver of the Institute for Policy Studies/Foreign Policy in Focusprovide a detailed account of the numerous social, economic, environmental and humanitarian costs and consequences of the Iraq War. They report that to date, the war has cost the US $727 per capita, making it the most expensive military operation of the last 60 years. In addition, maintaining the level of operations in Iraq and Afghanistan will lead to a near doubling of the US federal budget deficit over the next ten years. Furthermore, they note that the world has become less secure, as State Department reports of "‘significant' terrorist attacks reached a record 655 in 2004, up from 175 in 2003."

Iraqi authorities have announced that they intend to privatize a broad section of Iraq's publicly-held industries. This article wonders what this will mean for Iraqi workers, and surveys the activities of labor unions since the US-UK invasion. Although US occupation authorities preserved the repressive labor laws dating from Saddam Hussein's rule, workers still organize unions and have occasionally gone on strike, demanding better wages and more Iraqi control over the oil sector. (PlanetaPortoAlegre.net)

The high cost of the war in Iraq is prompting conservative lawmakers and experts to criticize out-of-control military spending and the Pentagon's inability to formulate concrete strategic goals. The wars in Afghanistan and Iraq have cost US taxpayers $5.6 billion a month during the 2005 fiscal year, and experts say that figure will almost certainly rise. (San Francisco Chronicle)

Widespread corruption and violence keep desperately needed investors out of Iraq. Moreover, some companies already working in the country are leaving because of the security situation: one US firm "has walked away from an estimated $325-million road-and-bridge contract due to heavy expenses required to provide security for its staff." (Agence France Presse)

The major problem in estimating the cost of the war in Iraq is that it is not over. According to a US report released by the Democratic staff of the House Budget Committee, the war and occupation could end up costing between US$461 billion and $646 billion by 2015. These numbers are far higher than earlier predictions; Lawrence Lindsey, President George W. Bush's former chief economic adviser, cited a figure between $100 and $200 billion at most, which the administration dismissed. (Asia Times)

Iraqis suffer from increasing violence in the country, but also face daily hardship due to the collapsed economy. US President George Bush's promise of "freedom and independence, security and prosperity for the Iraqi people" has resulted in 70% unemployment, foreign ownership of Iraqi businesses and no preference for local over foreign businesses. (Inter Press Service)

21,000 laborers and 5,100 students were hired by the city of Baghdad to remove "the mountains of food waste, soda cans, plastic bags and spare car parts" from the city that have piled up since the US invasion in March 2003. The program, funded by the US Agency for International Development (USAID), started in July 2004 with a goal to clean up Baghdad and to create jobs for the unemployed. (Washington Post)

The overthrow of Saddam Hussein in March 2003 sparked a revitalization of Iraq's labor movement, as workers organized in trade unions. However, CPA Administrator Paul Bremer repressed workers rights by imposing a law banning unions in public enterprises. To date, Iraq's Interim Government has yet to lift the ban. (Foreign Policy in Focus)

The overthrow of the Saddam Hussein regime by US forces in March 2003 also ended a 14-year-long arms embargo on Iraq. Inter Press Servicereports that ending military sanctions has triggered a rush by the world's largest weapons dealers, including the US, Austria and Russia, to stake a claim in the re-emerging Iraqi arms market.

Marylou Malig examines Order 39, imposed by CPA Administrator Paul Bremer in September 2003. The decree transforms Iraq's state-run economy into a market economy geared towards "promoting foreign investment through the protection of the rights and property of foreign investors." Malig contends that several provisions of Order 39 allows foreign investment even in sectors that have been regulated by the most controversial free trade agreements, including NAFTA and FTAA. (Focus on the Global South)

Fourteen months after the March 2003 US-led invasion, experienced Iraqi workers and managers continue to sit idle as US multinational firms charged with rebuilding Iraq hire foreign workers and subcontractors. This report contends that the high unemployment rate undermines the prospects for stability throughout the country, and recommends the implementation of economic reforms emphasizing the creation of new jobs for Iraqi companies. (Education for Peace in Iraq Center)

This Middle East Economic Surveyreport identifies key challenges facing the occupation forces and a future Iraqi government in implementing a strategy to rebuild Iraq's economy, including reducing dependency on oil revenues to fund government expenditures.

Patrick Nixon, top British member of the Coalition Provisional Authority (CPA), warns of a possible spike in Iraq's inflation rate, sparked by increasing demand for housing, transport and consumer goods. (Observer)

Labor unions in post-Saddam Hussein Iraq struggle to address workers' rights with few resources and no legal status. This article from the Progressivehighlights this dire situation because "privatization looms like a sword of Damocles" over the heads of Iraqi workers.

The US is more dependent on the rest of the world for capital than at any time in the past 50 years. The unilateral foreign policy of the Bush administration, most notably the war on Iraq, has added even more tension and vulnerability to the economic situation. (New York Times)

Banks are reopening in Baghdad but after the lootings there is not much they can offer to the people. The Iraqi dinar does not have much value and circulation of the US dollar is increasing. (Los Angeles Times)

"Can a global hyperpower also be a global hyperdebtor?" asks Niall Ferguson in the New York Times. Foreign investors increasingly bankroll US military expansion, as the US trade deficit grows to unprecedented levels, leaving some analysts to wonder how long it can last.

The war in Iraq may result in one trillion dollars in losses in the Gulf region, falling levels of investment and increased military spending. (Inter Press Service)

The Iraq crisis will likely overshadow poverty, AIDS, education, and debt relief for poor countries at the World Bank and IMF's annual spring meetings in Washington, highlighting rich countries' gross over-representation at the two institutions. A Bank report says, "bluntly speaking," poor countries will not meet UN goals to halve poverty rates by 2015. (Reuters)

Among many theories on why the US is attacking Iraq, some analysts believe the Bush administration wants to preserve the dominance of the dollar in world oil transactions. However, war has hit the dollar hard and may in fact deepen the US current account deficit, with grim implications for the US economy. (Asia Times)

US arms sales are expected to rise. This can be attributed to its military forces attacking Iraq with state of the art weaponry ranging from Tomahawk cruise missiles to laser-guided bombs, harming both military and civilians. (Inter Press Service)

The central bank of Indonesia and many Indonesian businesses may switch from the dollar to the euro for international transactions, citing the dollar's potential long term instability and "political baggage." The US led war on Iraq has had a direct impact on weakening the dollar in relation to the euro. (Asia Times)

The immediate economic burden of the war on Iraq is obvious, writes Hamish McRae of the Independent, but the war may have even more dire long-term consequences for multilateral cooperation and free trade. The decline of multilateralism could undermine the world's capacity to recover from post-war recession.

Arms industry analysts say powerful and precise performance by new US weapons technology in Iraq could bring a significant boost in foreign sales, mirroring the frenzy of arms sales that followed the first Gulf War. Industry observers warn that US firms may end up arming unstable regimes and fueling further violence. (Washington Post)

Jay Garner, the retired US general who will oversee humanitarian relief and reconstruction in Iraq, is also the president of SY Coleman, a company that provides crucial technical support in the manufacture of the Patriot missile system. Garner's background is causing serious concerns at the UN and among international aid agencies. (Observer)

Oliver Morgan of the Observerprofiles Jay Garner, the former US general who will head the Pentagon's Office for Reconstruction and Humanitarian Assistance in Iraq. Some aid agencies are worried about Garner's connections to prominent hawks in the Bush administration and to arms manufacturers.

Jason Leopold examines the various controversies surrounding Richard Perle, who resigned as chairman of the Defense Policy Board after disclosures about conflicts of interest in his business dealings. Perle had resigned from a previous post as assistant secretary of state in April 1987 amid complaints of conflicts of interest. (Asia Times)

In the midst of an expensive and dangerous war on Iraq, the Bush administration is quietly proposing the largest budget cuts in history on food stamps, child nutrition programs, health care for the poor, and even veterans' benefits. The "very idea of a humane and responsive government" is under attack, writes Bob Herbert of the New York Times.

A new budget resolution may pass the US Congress virtually unnoticed as US citizens remain preoccupied with the war on Iraq. By mid-April the budget proposal could become law. (Boston Globe)

President George W. Bush formally asks Congress for $US 75 billion for the war in Iraq. But critics are doubtful that it will cover the complete costs of the war and economists state that America's deficit could exceed $US 400 billion by the end of this year. (Guardian)

Describing "the high price of bad diplomacy," this article from Business Weekwarns that the costs of a US war against Iraq, in both economic and political terms, could be higher than anyone now anticipates.

Pentagon officials have estimated the cost for defeating and occupying Iraq for six months to be around $85 billion US dollars. That is twice the cost of war cited by Defense Secretary Donald H. Rumsfeld. (Los Angeles Times)

Australian researches report that a "short" war with Iraq and its aftermath could cost the world one percent of its economic output over the next few years and a total of more than $1 trillion by 2010. (Reuters)

The cost of a war with Iraq might exceed 1991's Gulf War and if the war continues for an extended period of time it might reach 650 billion US dollars.(Middle East Online)

This article suggests that a US attack against Iraq could lead to a rise in oil prices, trigger a crisis for the already-struggling global economy and lead to "colossal economic ruin." (Yellow Times)

Joseph Stiglitz dispels the common myth that war generates economic growth. He predicts that attacking Iraq would have negative effects on the US and the world economy. Even from the perspective of oil interests, a war against Iraq represents a "risky venture" that may have adverse consequences on oil prices. (Guardian)

A report finds that a war on Iraq could cost the US between $99 billion and $1.9 trillion. The figures depend on the success of military, diplomatic, and nation-building campaigns. (Associated Press)

This essay gives a comprehensive analysis of the potential costs of a war against Iraq. It presents different scenarios including the risk of a humanitarian disaster, impacts on the oil market, aftermath of hostilities, and costs of rebuilding Iraq. (New York Review of Books)

Economists worry that a war with Iraq might upset the emerging recovery of the US economy by causing consumer spending and business investment to fall and oil prices to rise. According to Wall Street economist William Quan, these negative effects will overwhelm "any stimulation to the economy from today's extra defense spending." (Christian Science Monitor)

If the US decides to attack on Iraq, without any Persian Gulf war international allies, it would have to pay most of the cost and endure the burden of any oil price shock, which will profoundly affect already declining US economy. At the end of the day, this war is really about the "War on Oil." (New York Times)