The now commenced War on Iraq has some interesting political and economic smokescreens behind it. "Nobody" wants the war, and fewer can find any justification in it. Possibly the only thing that war protagonists and opponents agree on is that its NOT about weapons of mass destruction.
The war rhetoric has proved very convenient for Tony Blair and his Labour Party. With all the media column inches devoted to the pre-war speculation, the anti-war lobby and the recent Labour Party revolt, there has been precious little space for the issues that matter to the folks at home.
The domestic live wires, which impact Britons more on a daily basis than anything Saddam Hussein and his government have in the past or will in the future do, can be summed up quite swiftly:
- The healthcare system is abominable, and is a greater immediate threat to the lives of the majority of poor and aged Britons.
- The decrepit transport infrastructure - rail particularly - is rapidly declining in the wake of escalating (rail) maintenance and renewal costs; and
- The rather sensitive issue of asylum seekers.
This latter issue is arguably the most explosive: policy on asylum seekers is changeable much more quickly than a healthcare system or transport infrastructure can be put back on track. The number of people claiming asylum in Britain has escalated over the last decade, with 109,500 applicants in 2002. The asylum "industry" (housing, income support, expensive legal process) now costs British taxpayers billions each year.
The Labour government was elected in 1997 to replace 16 years of Tory conservative rule. Blair sang a public services song and the voters gave him a standing ovation. In 2001, Blair's tune was "You can't turn around 16 years of under-investment in 4 short years. Elect us and we will deliver in the coming term."
Midway to the next elections, voters find themselves with a healthcare and education system that are at best unchanged, a transport system that is arguably worse, rising taxes and now a war that "nobody" wants and the Chancellor says we can't afford.
Blair would have found himself constantly in hot water over the past 18 months, were it not for the golden opportunity presented by his transatlantic counterpart. Blair has been able to tug the moral heartstrings, instead of facing searching questions about things that matter to the people who elected him. "Saddam is a Bad Man™ and we're gonna make the world a Better Place®."
Britain has weathered the current economic black cloud better than the US and European economies. The downturn began long before the war rhetoric, but the months of uncertainty have dented consumer confidence and worsened an already bad situation.
All predictions are for the war to be a swift one, over in a matter of days. Practically, it’s easy to see the media appeal: no bloody carnage, just a quick march and a "Howdy doody Baghdad, we're in charge now." It's what the propaganda has led us to believe, but is it really likely? Last time Hussein tried to surrender to "Allied" forces, we wouldn't hear of it until we'd finished our fun. The same is likely this time around.
A war lasting but a few days would be a major anticlimax after months of heated debate. It would give Bush the "I told you so" card, and make him look good - though its a little far off electioneering time for that to be used to full effect.
A short, swift, clean war scores highest points on the economic indicators. Oxford Economics Forecasting predicts that for the "Benign" scenario, GDP will rise in the UK in 2003 by 2.4%, and in the US by 2.6%. This compares with the last 12 months' 2.1% and 2.9% respectively.
Under their "Intermediate" scenario, the figures change to 1.2% in both economies. This is comparable with the performance over the last quarter - 1.3% and 1.4% respectively. The worse-case scenario tested by the Oxford economists is if it all gets rather nasty - protracted war, lots of casualties, the folks starting to feel it back home. A "real" war, one that spills over the borders of the naughty country that needs a good spank. Under this scenario, UK growth is negative, -0.4%, and US growth even worse at -0.7%. Clearly these latter two scenarios are highly distasteful.
The recent shelving of diplomatic efforts and the rapid march to war has been a result of two things: Blix's declaration that inspections are working and should continue indefinitely, which would mean sustainment of the uncertainty and consequent economic downturn; and the imminent arrival of the Iraqi summer and the impracticalities this brings to weapons performance and troops' likelihood of donning those infernal Chemical Weapons Attack suits.
Clearly the point is not Weapons of Mass Destruction, or Weapons of Mass Effect, we're after economic recovery in time for the elections. Oh how different things might have been if these two countries' polling years had been a little more disjoint.
"Its all about Oil" has been the rallying cry of the anti-war lobby, but it has also been thrown back in their face by the hawks: they say France and Russia's disapproval is not morally grounded, but rather based on uncertainty over whether a US puppet government in Iraq will respect their pre-negotiated oil exploration and extraction contracts.
Oil is clearly a strong motivating factor - particularly for such an oil-dependent country, currently run by two seasoned oil men. But oil money is but a drop in a vast ocean. Bush has even pledged the Iraqi oil revenues for "the Iraqi people".
The cost of rebuilding Iraq after the B-52 bombers are done will be enormous. It will be funded by the oil revenues, and who better to carry it out than the predominantly US-owned construction companies of the Gulf region? It's a real coup-de-grace: cheap oil for the US, the revenues going to "the Iraqi people", but the cash going straight back into the US coffers via the construction companies. (Oh yes, and the grain producers who will feed the Iraqi people who didn't starve while the war raged on.)
There is much speculation amongst the anti-war clan about "who will be next?" But another war does not make sense. Political uncertainty is bad for an economy, as the last few months have shown. There can be nothing to be gained by ruffling more international feathers: Bush and Blair will have demonstrated strong leadership skills by having weathered the storm, and will celebrate the economic recovery that should see them through to the next election.
The EU economy will piggyback on the US and UK recoveries, and fences will be mended in no time at all. Reconstruction of Iraq will give the US economy the sustained boost that it requires, and trade will up between Europe, the UK and the US. We will be a happy little Free World once again.
The only hitch will be for Blair: his lingering problems with healthcare, education, transport and asylum seekers, now that the column inches are available again. But the Labour government has an ace up its sleeve: they promised a referendum on the Euro this term, and there's a contentious issue if ever there was one.
If there's one thing the British like, it’s their Pound. It’s not a currency, it’s an institution. They're big on tradition, and have a largely obsolete monarchy to prove it. With the majority of the population not skilled bankers and economists, few people understand the nuances of whether joining the Euro is a good or bad thing. I certainly don't. Public feeling on the issue will come down to what is printed in the press, and tradition. Hell, they still sell racehorses in Guineas.
Roll on early 2004!
- Various news sources
- The Economist over several weeks
- Presentation by Oxford Economics Forecasting in February 2003