War's costs, war's dividends

AT 804 billion pesos, the proposed national budget for the Philippines seems like a lot of money.

Not really. When you think of the country's needs, that 804 billion pesos translates into paltry amounts when it finally filters down to various government agencies.

Eight-hundred four billion pesos is nothing, too, compared to what the United States may have to spend to invade Iraq. For starters, the US Congressional Budget Office has a conservative, note conservative, estimate that a "short, two-month" war in Iraq will cost 40 to 60 billion dollars.

At 55 pesos to a dollar, 50 billion dollars would be equivalent to a staggering 2,750 billion pesos (or, hold your breath, 2.75 trillion pesos). Put another way, a "short, two-month" war in Iraq would require money that could run the Philippines for three and a half years.

Notwithstanding boastful claims, reported in the British newspaper Telegraph, that American and British forces can capture Baghdad within 72 hours, we know from previous US wars, all the way up to the most recent adventures in Afghanistan, that they can just stretch on indefinitely. Each extended day has its costs. The Congressional Budget Office figures that each additional day of high-intensity conflict in Iraq, beyond the two months, will cost 500 million dollars. That's 27.5 billion pesos.

Meanwhile, over at the University of the Philippines, faculty and students have been taking to the streets to protest its shrinking budgetary allocations. If lucky, we'll be able to get four billion pesos this year. Which means that the United States will spend, for each day of war in Iraq, the equivalent of UP's budget for seven years.

I'm going to stop doing conversions from here on, mainly because just looking at the Congressional Budget Office's other estimates are shocking enough.

If the invasion does eventually wind down, the United States will need to stay on for "peace-keeping" operations. The Congressional Budget Office says that keeping 75,000 American soldiers in Iraq will cost about 15 billion dollars a year. If they deploy 200,000 soldiers, the annual costs could soar to 45 billion dollars.

That's just for "peace-keeping." Reconstruction will cost from 20 to 80 billion dollars, depending on how much damage there is. I have to admit I did lose my composure reading the figures. First, Bush spends 40 to 60 billion dollars to bomb Iraq off the face of the earth, then comes in with 20 to 80 billion dollars to repair the damage.

All these figures really build the case for arguing that this war is mainly good for segments of the American economy. We've heard the arguments that it's not so much weapons of mass destruction than oil, and the Bush clan certainly has considerable investments in that industry. Invading Iraq is good for the armaments manufacturers. And now we're going to see that a host of other companies, from construction firms to charity groups, stand to gain in a post-invasion Iraq.

The Wall Street Journal and BBC report that the US Agency for International Development (USAID) has already begun to solicit bids to rebuild Iraqi seaports, airports, schools and hospitals after the invasion. And as USAID policies go, only US companies can bid for the contracts.

The BBC reports that 900 million dollars worth of "reconstruction" awards have already been committed, including one to Kellogg Brown and Root, a subsidiary of the Halliburton Company. Eyebrows have been raised because the former chief executive of Halliburton is US Vice President Dick Cheney. He did resign from Halliburton, as required by law, after he was elected vice president but people can still read a conflict of interest.

One could argue that at least the US government has a conscience, committed to rebuilding Iraq. But history tells us it isn't quite that simple. Modern wars have been so destructive that rehabilitation entails huge amounts. Even the Marshall Plan put together by the United States after World War II to assist Europe ended up far short of the actual costs of rehabilitation.

Americans themselves are cynical about the Bush administration's intentions for a post-war Iraq. Thomas Carothers, a co-director of the Democracy and Rule of Law Project at the Carnegie Institute, told Radio Free Europe that the administration is likely to assist Iraq only for a short period after the war, to placate public opinion and to give the illusion that his invasion is a "war of liberation."

I'd expect "reconstruction" money in Iraq will go mainly to American contractors as well as supporting Iraqi politicians "friendly" to US interests. War will pay generous dividends for the US government but it will be another story for the rest of the world, the Philippines especially.