History Forum / General / British History / May 2007

A concept they will *never* understand.
Some have even managed to twist the disaster in Vietnam into some kind of US
'victory' in their deluded minds.
Seems not playing to the US script and turning up for suicidal 'battles'
against vastly superior weaponry is somehow 'cheating' and means the
Vietnamese 'lost'.
Hilarious.
And they havn't learned a thing from it - as the latest disasterous defeat
in Iraq clearly shows.

On the contrary, by comparison to the putative geopolitical advantage,
the humanitarian argument was and is far more compelling. Assuming
that the Iraqi body count you posted earlier is correct, the rate of
excess death is currently running at about 1/5th of its level  prior
to the invasion. If that argument is intended to be humanitarian, you
are on the wrong side.

Over 1996 up to the invasion, the Iraqis were permitted to export oil
at roughly their historical maximum capacity. They were unable to both
service their external debt and feed their population at the price of
oil prevailing over that period. Further, Iraq's crop yield per
hectare declined about 25% over 1980 through 2000. Syria and Iran are
both deep in the yellow-zone environmentally, as is Pakistan. Iraq and
Afghanistan are both in the red-zone, of course, and have been for
some time. Iraq has been in deep trouble longer--the war with Iran was
a calamity, as was Saddam's decision to drain the swamps. Iraq was
borrowing to buy food as early as 1983.

The fundamental issues are relatively straightforward. Iraq is
overpopulated relative to its declining food supply at its prevailing
level of external debt. As the societies begin to starve, their
governments become progressively dictatorial and outwardly hostile.
That diverts attention from problems that are of their population's
own making.

After an attempt to nationalize a large fraction of its external
government debt by invading Kuwait and threatening Saudi Arabia, the
Hussein government was driven back into its own borders and was, to
some extent contained. Forcing the population to deal with its own
problems internally led to an estimated 1.8 million deaths and
widespread starvation.

The highest average daily calories I have found reported was about
2,030 calories per day, which amounts to slow starvation (the UN
recommends 2,100 calories per day). There was substantial variation in
the average along the way. For example, following the bombings in
1991, the daily average fell to about 750. Over 1991-1995 it rose to
about 2,268. By August 1995, it had fallen back to about 1,000
calories per day. It gradually rose from there. OTOH, I haven't seen
the UN report out the standard deviation, but these are somewhat
difficult to apply in any event because the matching measures of
age/height/body weight are crude. Even so, we can form rough estimates
from the data. At an average of 1,000 calories per day (1995) about
69% of Iraqi children were malnourished: 28% stunted; 29% general
malnutrition; 12% acute malnutrition. At an average of 2,030 calories
per day (1997-1998), about 34.7% of children were malnourished: 11.7%
stunted; 14.7% general malnutrition; 8.3% acute malnutrition. At the
same time, about 25% of adult males and 16% of adult females were
malnourished.

From the standpoint of humanitarian action, in the short run, the
current policy of intervening in the genocide that was being conducted
by the Hussein government is appealing in some ways. Over the long
term, the case is less clear. It might be more humane in the long term
to let nature take care of the overpopulation problem. OTOH, whether
the US policy toward genocide in other countries is neglect, as in
Rwanda, Somalia, and Sudan, or intervention, as in Iraq, the US will
be blamed. None of the choices are/were terribly appealing, at least
two (neglect and blockade) had already been tried.

During his period in office, President Reagan primarily chose neglect.
That had the advantage of passivity and low cost, but it likely made
the ultimate problems far worse than they might have been and it
amounts to slow taking the slow road to genocide. His strategy
mirrored that of most of the European countries (France continued to
support the Sunni minority).

Although the deteriorating situation in Iraq was almost entirely
ignored, the US did provide Iraq some loan guarantees to buy food. At
the time Iraq defaulted on their food loans (just prior to Gulf War
part I), they totaled  US$2.19 billion. US commercial interests loaned
Iraq an additional US$400 million.Contrary to a lot of negative press,
the US did not directly loan Iraq anything to finance its war with
Iran, and provided a rather small amount in loan guarantees (not
loans) for food. Based on the 2005 valuation of Iraq's external debt
(about US$350 billion (2003 est), including US$125 billion in
conventional foreign debt), between them, the US and UK accounted for
less than 1% of the total. In case you're wondering, during the
Iraq/Iran war, US arms sales to Iraq totaled $200 million, i.e. almost
nothing. For purposes of comparison, Iraq owes Saudi Arabia and Kuwait
some US$30 billion and US$27 billion, respectively in conventional
foreign debt alone. Iraq had a strong incentive to invade its
neighbors to avoid paying them back.

If encouraging people to solve their own problems internally fails,
the next round of choices is always bleak. In Iraq's case, the
population nearly doubled while environmental destruction worsened and
food production declined. Insufficiently high oil prices then
triggered the crisis. Whether the US stays or goes, those problems
remain.

Iraq has significant problems. Although satellite imagery indicates
that the UN's environmental project has succeeded in restoring about
1/2 of the wetlands Saddam ordered to be drained, reclamation of the
other half will be both time consuming and increasingly
difficult/costly as the area expands. In addition, at about US$7-10
billion and about 10 years each, Iraq's 3-5 Superfund sites will need
to be cleaned up before it will be possible to stabilize the water
supply. Also, only a fraction of Iraq's agricultural problems are
solvable in Auroville fashion (a combination of reforestation and
sustainable agriculture). Again, it's a minimum 15-year commitment.

Worse, Iraq's biggest problems are due to salinization. It is possible
to reverse the damage, but it's extremely expensive and very
long-term--roughly 75 years if the salt as not reached the water table
and as much as 500 years if it has. We know that at least some of the
land is, for practical purposes, permanently contaminated by salt in
the water table because salt water is degrading the oil fields;
however, some of the salinated land may be reclaimable sooner
depending on the salt concentration and what crops are planted (food
plants are variably salt-tolerant). Even so, 10-15 years is probably
optimistic given the current population. Our expectation should be
that Iraq will need to import much of its food for the foreseeable
future. On the plus side, due to technological issues, Iraq may be
using as little as 50% of its arable land, so there is some hope for a
significant agricultural expansion under certain conditions.

Saddam spent more than a decade at war, projecting his national
problems outward instead of attempting to solve them internally. In
response, Bush Sr chose a policy of blockade/containment. That had the
advantage of forcing the issue. Among other things, it placed the
immediate blame for the resulting death rate on Saddam's government.
Unfortunately, in the face of world opinion, blockade/containment is
evidently unsustainable against a country with a valuable strategic
resource. Although containment worked reasonably well against the USSR
during the Cold War despite the horrific death rate, given that
Western Europe is now in thrall to Russian energy supplies and other
raw materials, a similar strategy would likely fail today. There's
still a reasonably good chance that it would succeed against North
Korea.  Pakistan, the Philippines and Indonesia are iffy. Iran's
probably a no-go.

In the end, the blame for Iraq's death rate under the sanctions stuck
to the US anyway, and in much the same way as the genocides in
Somalia, Rwanda, and currently Darfur, have done. Had it been the case
that the world could afford a protracted blow up in Iraq, it is hard
to imagine the US being willing to intervene in any significant
military way. Unfortunately, that isn't the case. During the Iran-Iraq
war, Iraqi oil production declined by about two-thirds. Permitting
that to occur again is not practical for the global economy. With
estimates of oil demand over the next 15 years suggesting a need to
add the equivalent of four Saudi Arabias to global supply, that is
particularly true under the existing circumstances.

In any event, reverting to a policy of neglect there would likely have
had serious consequences. Among them millions more Iraqis would likely
have died. Saddam would probably have repudiated his external debt to
everyone but his arms suppliers. That would have put him in a position
to re-arm, and threaten the region again, very likely this time with
nuclear weapons following a path similar to that taken by North Korea,
another unstable environmental hotspot. On the plus side, the direct
immediate cost would have been  low and we could  always try to say
"Who me?" when the situation went to hell. Of course, that
didn't work the last time, so there was no real reason to think it
would work any better this time.

I have touched on Iraq's debt situation a bit before, but with players
like Allawi touting the "success story" of debt forgiveness, it is
probably worthwhile to look again.

Following the US intervention, the US and UK pressed for renegotiation
of Iraq's external debt. Because they were very small creditors, i.e.
had stuck to the moral high ground in the first place, this led to
widespread complaints that the US wanted to spend other people's
money. Translation: no one else has been very forgiving (not a
surprise, since most of them have debt problems of their own). Of the
original US$350 billion owed, the Paris Club countries forgave about
US$17 billion (80% of what they were owed), leaving US$333 billion
owed. Of that, $25 billion was owed for adjudicated Gulf War I
obligations, to be serviced with 25% of Iraq's oil revenues. That
obligation should have been satisfied at the end of 2006, or so. That
leaves roughly US$308 billion owed. Assuming debt service at 6% per
annum , Iraq's annual outflow for debt service alone would be
about US$18.4 billion.

It's difficult to assess whether 6% is a reasonable estimate. Once
negotiations on debt forgiveness foundered, proposals circulated to
decrease the interest on the debts to that level. Given the risk, that
level would be unusually low, and the data is sparse. Iraq's annual
debt service may in fact be much higher.

However, it does jive with the publicly available information under
some assumptions. Assuming that oil's share of the Iraqi economy has
fallen from 85% of GDP to about 50% of GDP, constant imports at 2003
levels (US$7.8 billion) and an oil price of US$60 per barrel (the
current OPEC target), with 27 million Iraqis, that implies a per
capita income of US$882.16, US$1,193.85 (US$1,188 actual),
US$1,779.68, and US$2,825.11 over 2004 through 2007 (forecast),
respectively. Assuming that Iraq serviced its debt, that would have
been true regardless of what the US did, and even that rosy scenario
assumes that Iraq spends nothing to correct its environmental
problems, and the US stays. Any illusion the Iraqis may have had of
greater prosperity was just that, an illusion. The Hussein government
and Iraqi industry borrowed a great deal of money that the rest of the
world wants paid back. [These GDP numbers lump the usual war time
black markets euphemistically in with 'economic diversification', but
the numbers work out pretty close to estimates of the actual income
per capita.]

If the weapons and money didn't come from the US and UK, one might
wonder where they did come from. SIPRIs estimates of the distribution
of Iraq's arms supplies for 1980-82 are: USSR and Warsaw Pact - 68.5%;
France - 20.6%; China - 2.7%; Egypt - 1.6%; US - 0%; All others -
6.6%. For 1983-1988 the numbers are similar: USSR and Warsaw Pact -
57.8%; France - 13.2%; China - 20.5%; Egypt - 1.6%; US - 0.8%; All
others - 6.0%. As for Iraq's conventional foreign loans, about 19%
came from the USSR/Warsaw Pact/Russia/China/France. Western Europe,
Canada, Australia and Japan kicked in another 13%, and about 65% came
from the Middle East and Africa.

Prior to the current mess, the menu of options was very bleak.
Sanctions failed to achieve the desired result, and were coming apart
anyway. The death rate was too slow to get the population back into
balance, but unacceptably high from the standpoint of global spin.
Blockade having failed, there were two main choices, ignore or invade.
From one point of view, the former is more or less equivalent to
letting Russia, and China get back into the business of destabilizing
the region to strengthen their own strategic interests.

Although invasion was  a bad choice, it was probably not the worst
choice and it had certain advantages. Among them, you get rid of
Saddam and guarantee some sort of longish-term presence to blunt the
destabilizing influence of the Russians, and Chinese. Also, using
Iraq's external debt as leverage, you force Iraq under the yoke of the
IMF. By forcing the privatization of Iraq's oil resource, you
permanently weaken any future Iraqi government. Disbanding the
military has much the same effect. It also puts you in a position to
begin to correct the fundamental problem, i.e., environmental
degradation/food supply. Also, as your own numbers suggest,  the
excess death rate among Iraqis has fallen very sharply. In spite of
popular and sometimes well-deserved criticism, this has in fact been a
cakewalk as these things go.

To the extent that we can read the future, I think the scenarios for
the Iraqis darken the sooner the US pulls out. An economic baseline
may be useful:

In 2002, the average nominal price of a barrel of oil was US$22.51.
That price level reflected a shallow US economic slowdown. Iraq's
production was about 738 million barrels that year. That gave them
income of US$19.5 billion. Assuming that Iraq services their debt,
that would only leave about US$1.1 billion available to feed, clothe
and house their population--not nearly enough.

Assuming a per capita subsistence of 2,100 calories per day consisting
of the UN's recommended food bundle is available at US$0.40 per day
per person, and a non-food survival allocation of US$0.60 per person
per day, basic subsistence for Iraq's population would be about US$10
billion for 2007. In other words, at more normal oil price levels,
Iraq cannot both service its debt and feed, clothe and house its
population, much less allocate US$30 billion to repair its
Superfund-equivalent sites, or begin the process of repairing the
damage to its agricultural lands. The World Bank estimates the annual
cost of that effort at a minimum of US$3.6 billion per year, of which
only US$2.4 million was available in the 2004  budget, with oil prices
at US$40 per barrel.

With oil prices at US$60 (the Saudi target price), Iraq currently has
a surplus. Anticipating either that the current price level will be
maintained once the US leaves Iraq, or that Iraq will be able to
maintain its current level of production during a civil war is at best
speculative and at worst, dangerous. In 1980, Iraq's per capita GDP
was roughly US$4,200, so it's really not surprising that there's
widespread dissatisfaction, but the situation will likely be far worse
if the US abandons Iraq to its advancing civil war. Wartime oil
production in Iraq is significantly lower (less than half) than
peacetime production, and the Sunni, who have no oil themselves, have
a strong incentive to disrupt oil production that benefits the Shia
and Kurds. That effort would probably be aided by the Saudis and
perhaps, the French.

Assuming that Iraq is able to maintain its historical wartime average
oil production of 332,287,631 barrels per year (about a third of
current production), the Saudis maintain their price target of $60 per
barrel, Iraq makes its debt service payments and imports are held
constant, Iraq's per capita GDP projection of US$2,825.11 in 2007
falls to US$506.46. Again, that assumes that Iraq spends nothing to
correct it's environmental problems, and the civil war does nothing to
make the existing problems worse. Neither is likely.

[In addition, the assumption that OPEC could maintain a per barrel
price target of US$60 is rather shaky. When the US withdraws, downward
wartime pressure on the dollar will end. If the US economy continues
to grow more rapidly than those in Europe and Japan (highly likely
given the demographics), the dollar will rise and the price of oil
should decline.]

The scenarios deteriorate from there. At the moment, oil prices are
high, and Iraq's production is running near its peacetime average. The
US, Canada, and the UN are doing environmental reconstruction. Iraq is
making its debt service payments.

If the US, Europe, or China has a recession, the price of oil will
decline sharply, perhaps back to the $15 range. At that level, Iraq
can barely feed, clothe and house its people. Debt service payments
fall to zero. That would destabilize the economies of Russia, China,
and the former Warsaw Pact nations, the rest of the Middle East
excluding Iran, and possibly trigger a worldwide recession, but things
are still not as horrific as they might be (perhaps 350,000 excess
Iraqi dead per year).

One step further down: Iraq's oil production falls to its wartime low
of 111,325,000 barrels. At that level of production, if there's a
recession in the US, China, and/or Europe and the price of oil falls
to US$15/barrel, Iraq cannot feed itself. Keep in mind that that was
the price level in the mid-1990s and, even with a strong-arm
government there were more than 1.8 million excess deaths. Expect
full-scale civil war and genocide. Refugees flood across the borders
into Iran, Syria. Both have growing environmental problems of their
own and neither has much surplus food. Syria and Jordan already have 2
million Iraqi refugees that they can't afford to feed living in camps.
Both Iran and Syria are in danger of tumbling down the same cliff as
Iraq.

Like Iraq, Kuwait, Saudi Arabia have each experienced declining per
capita GDP as their population growth rates have exceeded the growth
rate in their real GDP, and neighboring Turkey is already plagued with
problems from the Kurds. At that point, you are in danger of a wider
regional or perhaps (with probability too low to be anything but
alarmist) a world war. I would guess maybe 4-7 million Iraqi dead plus
a potential for wider conflict. On the plus side, that would get
Iraq's population back in line with the current food supply.

As far as I can see, as bad as it might get, the best case scenario
(for Iraq) by far occurs if the US stays, though it would be better
still if the UN went in, and there's no perfect solution either way.
The odds improve dramatically if the world community writes down
Iraq's debt and begins a massive environmental recovery program there.
Neither is extremely likely, though I see failing to do it as
penny-wise.

OTOH, it is politically difficult. Among other things, it would
require the Bush administration to acknowledge the environmental
issues. Russia, China, and France would have to back off of some of
their ambitions and trouble making, and a lot of people would have to
bite the bullet on the debt. Between cleaning up the severe
environmental problems, stabilizing the water supply, and fixing the
easier agricultural issues, recovery will take 10-15 years. There is a
decreasing likelihood that the political situation in the US will
support that. If not, it would probably be cheaper to defend Saudi
Arabia/Kuwait, Jordan and Turkey, and let the Iraqis kill one another,
while their refugees destabilize Iran and Syria.

Although giving in to Saudi pressure to switch sides and back the
Sunni/Kurds would probably buy some time (much as it did when the
British withdrew last time), that's a temporary solution that would
probably lead to fighting the whole thing over again later. It would
also require the US to abandon the whole 'democratization' line,
though I think that if they fail to deal with the debt and
environmental issues, that's the best we can hope for any time soon in
any event.

Other scenarios are possible, but the core issues: the environmental
catastrophe/food supply, Iraq's external debt problems and the price
of oil must be part of the discussion. Low-information, un-analytical
political spin and hot air is pointless, and is highly unlikely to
yield a favorable outcome.

In particular, if anyone out there has more current information on the
status of Iraq's external debt that they are willing and able to
share, I would appreciate hearing about it. Also, if anyone has access
to public information on the environmental efforts in Iraq, that could
prove useful.

That's a good one.....question: when did this Iraqi 'civil war'
begin? Prior to, or after our invading and removing Saddam?

If only, there were a civil war in Iraq......keep saying it
and even I, may start to believe it too.....

Mark