Ambassador Hesham Youssef's Keynote Address at the Cost of Conflict in the Middle East workshop held in Antalya, Turkey on 15-17th of March 2008.
It is a pleasure to take part in this important meeting. I would like to thank both Turkey and Switzerland for their joint sponsorship as well as the Strategic Foresight Group and my friend Sundeep for their efforts in organizing it.
Sundeep and I discussed the idea of convening this meeting in early 2007. I am glad to see it taking form.
Let me indicate at the onset that I realize that the endeavor we are embarking on is very difficult for many reasons. To begin with, it is probably impossible to calculate with a reliable degree of accuracy the comprehensive direct and indirect short term or long term real costs of conflicts.
The loss of life is priceless. Destruction of important infrastructure and the eschewing economic costs stemming from it can alter the path of development for the conflict ridden nation, it can result in welfare losses from living in a conflict ridden region as well as cause considerable opportunity costs if investment is lost - all of which while tangible are difficult to calculate. There are other costs that cannot be quantified.
How do you quantify the cost of US acceptance levels dropping from 75% to 51% in Great Britain or from 60% to 30% in Germany or from 62% to 39% in France ? Further this figure is only 9% in Turkey , 21% in Egypt and 20% in Jordan . Madeline Albright recently indicated that she felt the image of the US that was once seen as a power that helped rebuild Europe and defeat the Nazis is now viewed through the prism of Guantanamo and Abu Ghareb. What is the cost that you can associate with such losses?
The Middle East represents a real challenge for a study of the cost of conflict. The region has been suffering from all kinds of conflicts with different rangers of longevity, persistence, and manifestations. From full scale military wars that the Arab Israeli conflict went through, and also as seen in Iraq and Lebanon to internal armed conflicts in several countries in the region to conflicts that began sixty years ago to those that erupted only a few years ago; from conflicts over land to civil wars.
I am also confident that all those who are present here have no illusions that the outcome of the study would result in significant change on how the conflicts in our region would evolve because we all recognize that economic costs of conflict may not be the crucial or determining factor in relation to how conflicts evolve in the Middle East as we realize that the main difficulty regarding most of our conflicts lie in the lack of government will or resolve to end them once and for all.
Moreover, I think it is obvious to leaders, policy makers and probably everybody else in the region that the costs that we had to bear for the conflicts, the wars and the instability that we are witnessing in our region were huge despite all efforts that many of us have employed to revive the peace process in the Arab Israeli conflict; achieve reconstruction in Iraq; to end the crisis in Lebanon . despite all this effort the region is on a war footing and not a peace footing.
Initial steps towards a massive military Israeli attack in Gaza in particular as well as the military incursions in the West Bank have probably already started. There are speculations about a possible eruption of another war on the Lebanese front and perhaps against Syria and despite the latest US intelligence reports about the status of the Iranian nuclear program, a possible military attack on Iran had not entirely been ruled out.
This is much more problematic when there are conflicts in the region and beyond that it is still believed, and wrongly so, that their objectives can be achieved through military means. Most of the conflicts are managed rather than resolved making them highly susceptible to future eruptions resulting in afflictions fuelled by the preponderance of wars. This is why future risk is an additional difficulty facing this project. However, despite all that, I still believe that we would probably agree that such a study would be an eye-opener for millions of people particularly that the costs are not limited to the people of the region alone but are certainly of a global nature and impact.
There are numerous studies on the different aspects of economic costs of conflicts; however, many of them do not capture the whole range of costs of a conflict or address conflict comprehensively, let alone on a regular basis.
More recently the cost of war in Iraq has been receiving a lot of attention. I think it is important to note that prior to starting the war in Iraq the Bush administration estimated the total cost of war in Iraq to be between $50-60 billion. Between 2003 and 2008, President Bush has requested over 10 times this initial estimate in direct appropriations for the war. If the President's latest supplementary funding request for 2008 is approved the total would be $607 billion - all of which is borrowed money.
The funds used through 2008 would have been significant to provide health insurance coverage to all those who are uninsured for the period 2003-2008. They were around 45 million in 2003 and 47 million in 2006. The US is reluctantly spending $5 billion a year in Africa . This is 10 days spending in Iraq .
If one is to account for the macro costs such as borrowings to finance the war included the displaced investment, the interest accumulated on this debt, the disruption of oil markets, other direct costs medical and health costs, repair of military equipment etc are taken to account the total cost of war in Iraq for 2003-2008 would be $1.3 trillion. Congress reports estimate that assuming a considerable dropdown in troop levels the cost of the war in Iraq would reach around $2.8 trillion by 2017. The total cost of war in Iraq for a family of 4 from 2002-2008, as reported by Congress is a shocking sum of $16,500 estimated to increase to $36,900 by 2017.
As we convene here today, a very important book has reached the public on the cost of war in Iraq titled The Trillion Dollar War, authored by prominent scholar and 2001 Nobel Price winner in Economics, Joseph Stiglitz, presents an unprecedented analysis of the costs of war in Iraq . The problem with many of these studies is that they only address the costs to the United States . That is to say it does not account for the most important cost, the costs to the Iraqi people - i.e. loss of lives, destruction or any other costs. It does not even take into account the costs to the region; Jordan estimates a cost of over $3 billion in the last three years for hosting Iraqi displaced persons; or to the other conflicts in the region or does the study account for indirect global costs resulting from disruptions of the oil markets or other factors.
The question then becomes what would have been the cause of events had public opinion in the US known then that: Iraq has no weapons of mass destruction (WMD), that there never was a link between the Iraq and Al Qaeda and that the cost is as much as it has turned out to be - would they still have supported the war? In a number of years the US decision to go to war in Iraq might be seen as one of the main reasons for the end of US status as the only superpower in the world.
As far as the Arab Israeli conflict is concerned I would not know where to begin. What cost would you put for war crimes or for refugees that have been outside their homes for decades; the costs of dividing villages by a wall and so on so forth. The World Bank indicated that the prolonged closure of Israel 's border crossing with Gaza could lead to the coastal strip's irreversible economic collapse. What cost would you put to such a development where 80% of Palestinians in Gaza are now dependent on food aid. 87% of households in Gaza and 56% in the West Bank live in poverty. 80% of the factories in Gaza are closed down and so on and so forth.
Another study on the costs of conflict in the Middle East to the US estimated that the cost reached $2.6 trillion from the period between 1956 and 2002. Once again this is cost to the US alone.
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