Financial Costs of the war
The Stiglitz and Nordhaus studies.
The most significant analysis of costs incurred as a result of the Iraq war is that compiled by Professor Stiglitz, a Nobel prize winning economist from Columbia University, and Linda Bilmes, who is a budget expert from Harvard. However, this study is still controversial as it estimates that costs could ultimately reach $3 trillion ($3,000 billion or £1500 billion).1
Stiglitz says the figure is so large because it includes costs that official estimates do not, such as the cost of the lifetime medical care of the 65,000 injured American service personnel. He also says that 100,000 of the 750,000 combat troops discharged so far have been diagnosed with mental health problems. Comparison with other wars shows that still others will have mental problems in the future. Disability pay and health care costs to the US budget will continue for several decades. Stiglitz estimates these costs could add a further $600 billion to the cost of the war. His figures also include costs to the economy caused by people unable to work as productively as they might have done and the cost of sending thousands of National Guard troops who might have otherwise continued working at their civilian jobs. This he says amounts to some $400 billion.
These costs are controversial because many of the war’s supporters say they are hypothetical and are being included on political grounds.
Deborah White has compiled a very interesting analysis of the costs of the war, based upon a breakdown into individual factors, which can be viewed on the About.com website.2 White’s findings are as follows:
Lost & Unaccounted For Funds
$9 billion of taxpayers money
$549.7 million in spare parts shipped in 2004 to US contractors
190,000 guns – including 110,000 AK47 rifles (ABC News)
$1 billion in tractor trailers, tank recovery vehicles, machine guns, RPG’s and other equipment provided to the Iraqi security forces (CBS News 2007)
Mismanaged & Wasted Funds
$10 billion (Feb 2007 Congressional Hearings)
$1.4 billion – Halliburton overcharges classified by the Pentagon as unreasonable and unsupported
$20 billion – Amount paid to KBR (a former Halliburton division) to supply US military in Iraq with food, fuel, housing and other items
Monthly Spending in Iraq
As of October 2009 – $7.3 billion
2008 – $12 billion
Cost of deploying one soldier for one year in Iraq
$390,000 (Congressional Research Service)
4,439 US troop casualties
Male – 98%
Non-officers – 91%
Active duty – 82%
National Guard – 11%
Caucasian – 74%
Latino – 11%
Non-hostile causes – 19%
Under 25 years old – 54%
From US Army – 72%
32,033 US troops wounded – 20% of which are serious brain or and spinal injuries. This figure excludes psychological injuries.
US troops with serious mental health problems – 30% within 3-4 months of returning home
316 Non-US troop casualties of which 179 were from the UK
US downed military helicopters – 75 of which at least 36 by enemy fire.
Journalists casualties – 145, 097 by murder, 47 by acts of war, 14 by US fire
Iraqi police and soldiers killed – 9,830
Iraqi civilians killed – over 100,000 (ABC News quoting a secret US government tally, leaked by Wikileaks October 2010). A September 2006 UN report states that Iraqi civilian casualties have been significantly under-reported. Other informed sources quote figures as high as 600,000
Iraqi insurgents killed – 55,000 (rough estimate)
Non-Iraqi contractors and civilians killed – 572
Non-Iraqi kidnapped – 306, including 57 killed, 147 released, 4 escaped, 6 rescued and 89 status unknown
Iraqi children suffering from chronic malnutrition – 28% (CNN, July 2007)
Average daily hours Iraqi homes have electricity – 1-2 hours (Ryan Crocker, US Ambassador to Iraq, quoted in Los Angeles Times July 27th 2007)
Number of Iraqi homes connected to sewer system – 37%
Iraqi’s without access to adequate water supplies – 70% (CNN July 30th 2007)
Water treatment plants rehabilitated – 22%
The US newspaper USAToday reported in March 2010 that the US made $44.6 billion available as of the end of 2009. Of that $21.25 billion went to security costs, $11.48 billion to infrastructure, $6.36 billion to government and $1.37 billion towards the economy.
The state of the Oil Industry in Iraq
According to Aymen Jawad Al-tamini writing on the Middle East Forum Iraqi oil industry statistics for August 2010 show that production has continued to decline since the end of 2009. In August 2010 production stood at 55.4 million barrels compared to 61.3 million barrels in December 2009. As a result, government revenue from petroleum has dropped from $4.4 billion in 2009 to $3.9 billion in August 2010.
Following the second round of petroleum bids, contracts were awarded to ten companies which included Royal Dutch Shell and Russian firm Lukoil. The oil minister Hussein al-Shahristani claimed that production could be boosted from 2.5 million barrels per day to around 12 million. However, the World Bank estimates that $1 billion in investment is required just to maintain present production because of outdated and damaged infrastructure. The OECD has given Iraq the worst score of seven (on a scale from zero to seven) on its credit risk classification system. Meanwhile the Economist Intelligence Unit conducted a survey of 300 business executives which found that 64% of them believed Iraq to be too dangerous to invest in right now. This is primarily because of an Al-Quaeda insurgency estimated to be around 2000 members strong, as well as ongoing political stalemate.
According to the Iraq Directory as of 31st January, crude oil production is growing, currently 2.40 million bpd, more than 3% above the previous quarter. Yet that is still below 2003’s figure of 2.8 million bpd, from the month prior to the US invasion.3
The giant Majnoon oilfield is being exploited by a joint venture between Royal Dutch Shell and Malayan company Petronas, according to BBC News in December 2009.
Social divisions in Iraq following the war
According to an article in the left-leaning magazine Red Pepper, in 2006 all sections of Iraqi society fostered a strong and utter rejection of the occupation, with the possible exception of people in the Kurdish region. The form in which this rejection took place varied from armed to political resistance. Part of the problem was that the occupation did not tolerate any free political organising as it believed that this would encourage the return of the Ba’ath party. The whole country was considered as a single constituency which meant that unless a political group had a national standing, it would not get anywhere in elections.4
The article explains that Iraq has always had a history of non-sectarian politics. Political developments during the 40’s, 50’s and 60’s aimed to bring together the various groups and the 1958 revolution paved the way for an improvement in the country’s economy. As material growth increased, sectarian movements became less important. Successive wars since the 1980’s including and most significantly the most recent conflict have been the major factor in destroying this process. The regime played on these divisions in order to maintain control. After the 2003 war a strong state should have been created with a national identity alongside rapid economic regeneration. The lack of such a process stimulated sectarian divisions and conflict.
The bombing of the Askariya mosque in February 2006 led to strife between Sunni’s and Shia’s which almost assumed the form of a civil war. In the north Sunni’s attacked Christian and Kurdish settlements in the city of Mosul. The city of Kirkuk is still disputed territory.5
Nuri Kamal al-maliki, a little known Shiite politician became the prime minister in 2006. In 2009 US troops withdrew from the cities, choosing to remain on vast bases. By July there were no longer any nations with troops in Iraq besides the US. Al-maliki capitalised on this claiming to be the proud negotiator of US withdrawal from Iraq, however in the absence of a strong Iraqi security force, a series of attacks took place throughout October and December 2009 and January 2010 conducted against government ministries, hotels and universities etc. Al-maliki was elected again in the 2009 elections and has since attempted to build a cross-sectarian coalition. All along, the Islamic State of Iraq, the insurgent group which includes remnants of Al-Quaeda in the area, have attempted to disrupt the elections. In 2010 a rival coalition led by a Shiite named Ayad Allawi appeared to have achieved a slim lead over Al-Maliki’s party however as of December 21st 2010 he has been given a new term of office. The US is planning to replace its troops, many of which have been withdrawn, with a force of security guards. The country is still seriously affected by Al-Quaeda insurgents and Iranian-backed militias with rocket attacks and roadside bombs being commonplace.