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This time around, United States offering cash rewards to reluctant allies

Passing the hat to pay for war

Posted: Sunday, March 16, 2003

WASHINGTON -- To pay for the 1991 Persian Gulf War and its aftermath, the United States passed the hat among willing coalition partners. Washington isn't finding many eager donors as it prepares for a second -- and unpopular -- war with Iraq.

In fact, the process is working in reverse, with the United States offering big cash rewards to reluctant allies such as Turkey and wavering U.N. Security Council members.

European nations helped underwrite the first war. Getting them to write checks this time will be extremely difficult ''without proper U.N. cover and if the member states remain divided,'' European Union official Chris Patten said last week.

The reluctance to step forward is not confined to erstwhile European allies.

Japan, which contributed $11 billion last time, ''will not bear the burden of paying for a war,'' Prime Minister Junichiro Koizumi said. Tokyo still is expected to help out with reconstruction costs.

The nonpartisan Congressional Budget Office estimated that sending forces to the region will cost $14 billion, that the war itself would cost just over $10 billion in the first month and $8 billion a month thereafter. Occupying Iraq, which is the size of California and has 22 million people, could cost from $1 billion to $8 billion a month, budget analysts said.

The economic consequences of going it alone -- or with a coalition of willing but mainly cash-strapped states -- could be far-reaching for U.S. taxpayers.

''A lot of commitments are going to have to be made. You know, we're the big kid on the block. And we have a lot of responsibility in the world, a lot of obligation, and I know that we're taking on additional obligations,'' Secretary of State Colin Powell told a House committee that oversees spending. ''There will be a lot of bills and reconstruction.''

President Bush did not request any funds from Congress for Iraq in the $2.23 trillion budget he sent Congress last month. His spending blueprint projects a $307 billion deficit even before war costs are calculated.

The administration is in the process of assembling a war-related spending request to Congress that is expected to total about $70 billion.

A blue-ribbon panel of defense experts, sponsored by the nonprofit Council on Foreign Relations, said in a study last week that rebuilding Iraq would cost at least $20 billion a year and require 75,000 to 200,000 troops to keep order.

The Security Council was deeply divided as it moved toward a fateful vote on a U.S.-British resolution to authorize an Iraq war. The administration has made it clear, however, that it plans to disarm and depose Iraqi President Saddam Hussein regardless of the outcome at the United Nations.

To help pay for the troop building and war in 1990-91, then-Secretary of State James A. Baker III and Treasury Secretary Nicholas Brady went through Asia and Europe on what was called the ''tin cup tour.'' They raised roughly $54 billion, covering most of the estimated $61 billion spent to protect Saudi Arabia and force Iraq to give up Kuwait.

Administration officials say they expect other countries eventually to help -- if grudgingly -- in reconstructing a post-Saddam Iraq, even if they do not chip in for the war itself.

Many analysts agree.

''In the end, there will be a certain amount of fighting about the shape of the table and who's in charge, but there will be a broad effort to participate in terms of reconstruction,'' said Edwin M. Truman, former top international economist at the Federal Reserve and assistant treasury secretary in the Clinton administration.

''Europeans would lose the high road if they say they oppose the United States blowing up the place but won't help pick up the pieces,'' Truman said.

France, in particular, has vested commercial interests in Iraq's future, as does Russia.

The administration stresses that oil revenues from Iraq -- which sits atop the world's second largest oil reserves after Saudi Arabia -- will go a long way in defraying reconstruction costs. ''It's not as though the country is destitute,'' said Defense Secretary Donald H. Rumsfeld.

But that assumes gaining quick control of the oil fields so Saddam cannot set them ablaze, as he did in Kuwait in 1991. Such acts of sabotage could keep Iraqi oil from being available for months or even years, industry experts said.

The administration is also sensitive to suggestions in the Arab world, and by many anti-war critics, that getting its hands on Iraq's oil is a prime war motive.

''Only someone ignorant of the easy-to-ascertain realities could think that the United States could profit from such a war, even if we were willing to steal Iraq's oil, which we emphatically are not going to do,'' said Douglas J. Feith, the undersecretary of defense.

Tom Raum has covered Washington for The Associated Press since 1973, including five presidencies.



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