Many of those who oppose military action in Iraq cite the cost as a principal reason. Before the war, they often exaggerated the monetary outlay, the loss of American lives, the danger of a long war and other concerns in order to discourage U.S. engagement. They were wrong.
But now that the end is in sight, they are back again exaggerating the postwar cost. They cite the need for years of U.S. military occupation, massive humanitarian assistance, rebuilding infrastructure and Iraq's huge foreign debt, among other things. Again, they are likely to be wrong.
In an earlier column, I noted that Iraq has the second largest proven reserves of petroleum of any nation on earth. Only Saudi Arabia has more. But years of war, government mismanagement and trade sanctions have taken their toll. Iraq's oil industry will need significant investments in new technology and repair before its production will be a factor in world oil markets.
While it may be some months after the end of hostilities before Iraq's oil begins to flow again -- and years before its full production potential is realized -- this does not mean that it will take that long before the Iraqi people can benefit from their natural endowment.
First, there is already a system in place administered by the United Nations that can legally sell Iraqi oil and use the proceeds for relief. Known as the oil-for-food program, it has received some $64 billion from Iraqi oil sales that has been used to provide humanitarian assistance to the Iraqi people. There are still billions of dollars left in this fund, and more could be added as soon as pipelines and other Iraqi oil infrastructure are repaired. This will be a high priority for Iraq's postwar regime and a key reason why coalition forces made such an effort to take Iraq's oil fields undamaged.
Second, a legitimate Iraqi government would not have to wait until oil is actually flowing in order to get revenue from it. Economist Morris Adelman of M.I.T. estimates that Iraq could get $100 billion almost immediately by selling production rights to its currently non-producing oil reserves. This will go a long way toward rebuilding Iraq without burdening the U.S. taxpayer -- a factor that the White House is counting on, according to comments by Office of Management and Budget Director Mitch Daniels.
Some analysts say that while oil could pay for much of Iraq's needs, it cannot do so until the issue of Iraq's foreign debt is resolved. Otherwise, much of the oil money will simply flow to Iraq's debtors without providing any benefit to the people.
Bruce Bartlett is a former senior fellow with the National Center for Policy Analysis of Dallas, Texas. Bartlett is a prolific author, having published over 900 articles in national publications, and prominent magazines and published four books, including Reaganomics: Supply-Side Economics in Action.
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