Friday, December 15, 2006

A Peace Prize for Iraq: The Economist's Solution to the War

Sometimes, thinking differently is required. This sparks a very different way of considering alternative outcomes. It also prompts one to ask new kinds of "what ifs" and potential consequences questions ...
[13 December 2006 - - by Dean Baker] The events of the last week should have dashed any hopes that the Iraq Study Group's (ISG) plan would lead to a quick US withdrawal from Iraq and an end to the violence. President Bush has made it clear that he will not accept the ISG plan for a phased withdrawal of troops. Even if he did accept the ISG plan, it is not clear how much longer US troops would remain in Iraq, nor that the plan would lead to an end to the civil war. Some new thinking is clearly in order. John Schmitt, my colleague at the Center for Economic and Policy Research, has risen to the occasion. He has developed an economist's solution for the war in Iraq - a $200 billion peace prize. The basic logic of the plan is very simple. At the moment, the various religious/ethnic groups in Iraq are fighting for control over Iraq and/or their particular territory in the belief that they have to protect their share of oil revenue and the other assets of the country. In other words, they have to fight to protect what they have, or to control what they think they should have. ... A prize of this magnitude would potentially mean serious money for the people of Iraq. It would be sufficient to provide almost $1,500 for every man, women, and child in the country, or $6,000 for a family of four. This is a huge sum for people in Iraq, where per capita GDP is less than $1,800 a year. The equivalent sum for the United States would be $150,000 a year for a family of four. This would be enough money to get most people's attention. If families in Iraq knew that they stood to get such large windfalls by keeping the peace, they might place considerable pressure on the militias, insurgents and jihadists to stop the killing. If the prizes were actually paid out, it would provide a huge boost to the Iraqi economy and could provide a basis for sustained economic development. More

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