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Return on our Iraq Investment

praveenghanta — Fri, 21 Mar 2008 21:06:07 +0000

As the fifth anniversary of the start of the Iraq war comes and goes, the Bush administration touts the success of the “surge” in American force levels begun last year, while those opposed to the war point to a litany of failures to denounce the entire enterprise. Both the administration and presidential hopeful John McCain contend that success in Iraq will pay huge dividends for future generations. Which side is right, and how can we measure the true cost (and benefits) of our Iraq engagement?

An estimate of the Iraq War’s return on investment can measured by weighing estimates of its total cost against its current and projected future benefits. On the cost front, the most conservative measure of the cost of the war is $600 Billion, roughly the amount directly spent on the war over its first five years. The benefits of the war can be measured in terms of its effects on US national security, US political relations, US energy security, and potential social and economic benefits for Iraq.

In national security and diplomatic terms the Iraq War is at best a wash, with no tangible return. While America deposed an evil dictator, we learned that the dictator had no weapons, and we damaged our relationships with many allies in the process. Moreover, many commentators argue that the Iraq war has increased the numbers and fury of America’s enemies, and been a great tool for radicalization. While it’s hard to estimate, the net benefit is probably zero, since present losses might be offset by the small chance of creating a safe and free Iraq a generation from now (a huge gain).

Vice President Cheney and others touted the energy security benefits of conquering Iraq, but after five years, Iraq has just begun to pump as much oil as it did prior to the war. Interestingly, economic growth in Iraq has actually been very robust post-war, driven by high oil prices. The CIA estimates total Iraqi GDP of $100 Billion, and Iraqi GDP growth at 5% for 2007. But Iraq’s GDP is 1/6th of our spending on the war, and GDP growth will have to continue at this rate for another five years before Iraq’s GDP even equals America’s annual spending on the Iraq war!

Returning to the concept of ROI, for a moment: we’ve spent $600B on a war that has produced little tangible benefit, except perhaps in terms of Iraq’s economic growth. But viewed from an economic standpoint, we are still spending more than Iraq’s GDP to control the country, so we’re failing even on that count. It appears that at best, our $600 Billion was spent on a dream that might take shape a generation from now. Unfortunately, most businessmen would call that an ROI of -100%.

Conquering Small Countries is Easy

praveenghanta — Wed, 27 Dec 2006 17:29:57 +0000

Numerous comparisons have been made between the current Iraq War and the Vietnam War, with some likening the two situations and others decrying the notion of any similarity. Some comparisons, including an analysis by Dr. Atul Gawande in the New England Journal of Medicine, show conclusively that improvements in medical technology have decreased the battlefield death rate significantly. Researching the statistics, Dr. Gawande shows that combat death rates from injury dropped from 30% during World War II to 24% during Vietnam, and to 10% in Iraq and Afghanistan. This decrease in mortality has been used to show that without modern medicine, American fatalities in Iraq would run at close to 2200 per year instead of the current 900 per year. But even at 2200 casualties per year, the Iraq conflict would pale in comparison to Vietnam, where on average 9000 American soldiers were killed each year during America’s heaviest presence (1966-1971).

While it might seem obvious, many commentators have ignored in their comparisons the simple fact that Vietnam is a much more populous country than Iraq. Unlike temporary invaders (or liberators), would-be nation-builders must establish security across a nation’s population; hence population is an important figure to weigh in any such estimation. Vietnam’s population today numbers 84 million, while Iraq’s population is 26 million, not quite a third that of Vietnam. An accurate comparison of the relative size of these nations involves comparing their population at the time of the respective conflicts with the US population at the time of that conflict. During the Vietnam War, the US population of 200 million (1968 estimate) was 5 times the Vietnam population of 40 million, while the current US population of 300 million is almost 12 times the population of Iraq. After adjusting for Iraq’s smaller population AND the advances in modern medicine, the Vietnam-comparable casualty rate for Iraq is 5300 per year. This number is still 40% lower than Vietnam’s casualty rate, showing that the current conflict is less dangerous for American soldiers on the whole.

Hawks and war planners should take note and consider the population comparisons, however. While the recent midterm elections have taken the initiative away from the hawks in Bush’s team, many still believe that war is the best option concerning Iran. Iran has nearly triple the population of Iraq, and unlike Iraq would more likely fight with a unified insurgency, since the population is not as divided along religious lines. Are hawks prepared to accept American military casualties above 3000 per year on a sustained basis? Perhaps they are, but the American people do not seem to be, having now tired of the much smaller Iraq conflict.