Iraq occupation will be long and costly

Americans should be patient and understand that the occupation of Iraq is not going to end anytime soon, former Secretary of Defence William Cohen told business delegates at a conference.

US occupation forces are not planning on leaving anytime soon, says Cohen
US occupation forces are not planning on leaving anytime soon, says Cohen

Increased attacks on US troops, sabotage of key infrastructure and the ever growing threat of sectarian war in Iraq coupled with the complex and largely untested task of nation-building in a country that is an “economic basket-case” will require US commitment for at least 5 years, he said.

“If we pull out, there will be anarchy and score-settling,” Cohen told delegates at a conference in Virginia late last week.

“Look at Bosnia as a point of reference. We are still there some eight years after the end of the war.”

Domestic battle

Though Cohen is no longer a member of cabinet (having served under Bill Clinton), he is well qualified to recognise the enormity of the task ahead. The real battle will not only be fought in Iraq, but also on the domestic political front.

Four and a half months after President George Bush proclaimed an end of major fighting in Iraq, US soldiers are dying at a rate of more than one a day and the cost of the occupation for the army alone is some $4 billion a month.

Analysts estimate that the reconstruction of the shattered country will likely cost anywhere between $100 and $300 billion over the next three years.

The greater proportion of this astronomical sum, the administration reasoned, would be funded by Iraqi oil sales, private sector investment and sequestered cash stashed away by Saddam Hussein.

This looks increasingly unlikely.


Oil exports remain at half their pre-war level, lawlessness is increasing and the effective protection of the pipeline running from Iraq to Aqaba, Jordan, is proven to be nigh on impossible.

The outlook for private investment is equally bleak. US companies, who until the bomb attack on the UN headquarters in Baghdad in late August were clamouring to set up business in the battered capital, are now much more circumspect.

Iraqis can expect occupation for
at least another five years

“I went to Iraq to see what business could be done and I ended up coming home again,” Charles Kestenbaum, a senior associate for business development at Washington-based C & O Resources, said. “Local employees refuse to go to work because they are so scared. They are frightened for their lives.”

Power and water supply in Baghdad is intermittent at best, there are no functioning banks and the cost of insurance is rising with each resistance attack. Those that do not enjoy military protection are forced to hire private security guards.

Moreover, there are no courthouses, no arbitration procedures for companies to rely on to resolve disputes and communication is only possible by satellite phone.

Budget deficit

The interim budget for the provisional Iraqi government in 2003 is expected to be some $3 billion in the red. With sovereign debt of over $100 billion, how will the already impoverished country cover its deficit ? The answer, according to Cohen, is that the US taxpayer will likely foot the bill.

The true burden to be borne by the US electorate is impossible to predict.

But the task will exercise a vast swathe of the international community which is scheduled to meet in Madrid for a donor conference in October.

This, the US hopes, will result in substantial donations or debt write-offs for the bankrupt nation.

Still, the US is struggling to recover after stock markets plunged in 2000 wiping billions of dollars from the savings of ordinary Americans.

US economic recovery

Tax cuts and historically low interest rates have encouraged a tepid economic rebound in the world’s largest economy, which has to some extent diverted the focus of the American public away from Iraq.

How sustainable the US recovery is remains open to debate. Some economists are already saying the market looks expensive.

Were interest rates to rise and if bond futures are anything to go by they look set to do increase, as does the prospect of a correction. US household debt currently stands at historic highs.

The relatively low mortality rate of American soldiers in Iraq coupled with a strengthening domestic economy means the Bush administration has a window of opportunity to reduce US involvement and boost international participation.

If Bush fails to do so, he will face a far tougher battle at home persuading the US electorate that the decision to invade Iraq was correct.

Source : Al Jazeera

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