Comments on: Anybody but Zarqawi

By: Giles

Giles — Fri, 15 Oct 2004 23:37:14 +0000

Dat is From Maddison Data From Easterly (who claims his souce is PWT) are 1970 4409 1975 5463 1980 7242 1987 3204 Why are my figure high or lower than you’ve seen? Anyway aside from Population growth, I think it looks like GW1 knocked 1000 off and sanctions another 1000.

By: Donald Johnson

Donald Johnson — Fri, 15 Oct 2004 20:39:11 +0000

Sanctions also played a major role in lowering Iraq’s GDP. Where, by the way, did the GDP statistics come from? They’re quite different from others I’ve seen cited. Not that I have any reason to believe one set over the other.

By: Giles

Giles — Thu, 14 Oct 2004 22:52:18 +0000

Turning to the figures for Iraq In 1970 GDP per capita was $ 3470 and Population 9.4 million In 1980 GDP per capita was $6400 and Population 13 Million In 1990 GDP per capita was $2460 and Population 18 million In 2000 GDP per capita was $1221 and Population 22.7 million So at current oil prices if we add the ½ the $2000 oil bonus in full, we take Iraq back to the standard of living it had in 1990. If oil doubles to 100 dollars, we take Iraq back to 1970. If oil doubles again i.e. $200 per barrel, we take Iraq back to its hey day of the 1980s. Point is that because its population has doubled, the potential benefits of oil are smaller than Iraqi think – it s not just Saddam that caused the fall in wealth but also the doubling in population. Hence there will be no return to the boom days of the 70s based on oil.

By: a different chris

a different chris — Thu, 14 Oct 2004 22:34:44 +0000

>(if distributed to all or substantially all of the people) Did I just spot a Milton Friedman-class assumption? Oh, and another one just swam by: >And if that oil stays state owned and not handed out as gifts for political interests Roger, I’m not so sure anything but a serious shift of energy use (please god not coal) will bring oil back below $40, but otherwise I think you are spot on. That stuff is simply crack cocaine for government.

By: JRoth

JRoth — Thu, 14 Oct 2004 21:03:48 +0000

I’m sorry to be obtuse, but I’m not getting jet’s 7:14 post; I mean, it sounds sarcastic, but the only land in which ME countries create wealth (as opposed to extracting it) is, indeed, a dreamland.

By: Roger Hurwitz

Roger Hurwitz — Thu, 14 Oct 2004 20:26:08 +0000

folks, one of the reasons why oil is $54/brl is because of the reduced and uncertain supply of Iraqi oil. If it could pump 3 M bpd (and that will not be under best conditions for a year plus), the price of crude would likely be south of $40. Moreover payback of foreign loans and royalties instead of full revenue on some of the oil, in addition to extraction and industry rehabilitation costs are going to amount available for distribution. This makes even distribution more unlikely and will exacerbate tensions in the North where there is already considerable ArabKurd rivalry over control of Kirkuk. Were equal distribution of revenue the great panacea, then the best US strategy would be to pull troops out immediately and flow the next schedule $80 billion expenditures directly to the Iraqi population. but that I am afraid would not be serving the strategic interests of the Bush administration.

By: abb1

abb1 — Thu, 14 Oct 2004 19:42:15 +0000

Well, it wasn’t a Marxist utopia, of course, but I have an impression that their economic system worked pretty much the same way as the Soviet economy: sell oil/gas – subsidize various government-run industries and organizations – pay pretty much the same salary to everyone. Of course there is a top layer of ‘nomenklatura’ – corrupt bureaucracy, but I imagine most of the oil revenues were in the end distributed more or less equally. Now, I think, Paul Bremer already wrote into their constitution that everything has be privatized and the maximum tax rate is 15%. So, it’s going to be more like a Libertarian Utopia.

By: jet

jet — Thu, 14 Oct 2004 19:14:36 +0000

Giles, why did you have to burst my bubble. I was going along happily in dream land where middle-eastern countries don’t try to make oil do everything and actually create strong industries with double digit growth potential. Oh well, I guess spending on research until we had 5 cent per kilowatt hour solar power would have been a better alternative to the war and Saddam could have rotted in Iraq and tried to pay for WMD’s with sand.

By: jet

jet — Thu, 14 Oct 2004 19:06:51 +0000

Abb1, While I realize this is a tangent to a tangent, I hardly think it plausible that in the 80’s Saddam was “equally distribut”ing the oil revenues. He was fighting a war with Iran and going into debt up to his neck with France, Germany, and Russia. If that oil money was being cut evenly to each citizen, I’m Colonel Sanders and I sell chicken. I’ll concede that off the top of my head I can’t point to anything concrete to refute your premise that 1970’s Iraq was a Marxist utopia. But for some reason I don’t think the corruption, fractured structure of the country, and strong military spending spontaneously appeared the day before the Iraq-Iran war.

By: Giles

Giles — Thu, 14 Oct 2004 18:53:18 +0000

No jet, I think a middle income country is about 5000 dollars per capita. So oil helps Iraq get about 40% of the way there. But more important than the extraction costs is the implicit rescources curse – and in Iraq’s case I think this is the belief that its wealth can be built on oil.

By: abb1

abb1 — Thu, 14 Oct 2004 18:51:12 +0000

I dunno, I think I am with jet on this one (even tho it doesn’t have anything to do with Zarqawi ‘n stuff). Something like 30% of the world’s population live on less than 2 bucks a day. $2K/head = $8K for a family of 4. This simply means that you’ll never go hungry or sleep in a ditch. Not too bad considering that it’s a gift. But of course there is no chance it’ll be equally distributed now; ironically, this is how was, I understand, under Saddam in the 70s and 80s.

By: jet

jet — Thu, 14 Oct 2004 18:41:52 +0000

Giles, But oil isn’t all Iraq has. Iraq has others sources of income than oil. My point was that even if Iraq is only moderately successful in building industries, they get 30-40 Billion a year roughly free (not much manpower required). And if that oil stays state owned and not handed out as gifts for political interests, it will provide a lot of capital the country is going to need. I’m certainly not implieing that oil is the magic fix Iraq fairy. But to discount the major boon it would be is dishonest.

By: Giles

Giles — Thu, 14 Oct 2004 18:40:57 +0000

nb 2000 pa alot? countries with 2000 dollars pc GDP Dominican Republic, West Bank, tonga, Guatamala, Jordan. Its not alot. Period.

By: Giles

Giles — Thu, 14 Oct 2004 18:22:13 +0000

No the point is that even if all the oil was costlessly and perfectly distributed that would still only give each person 2000 dollars per capita – i.e. Iraq would still be classified as a poor country by world economic standards. The smallness of the figure is the essence of what is wrong with the middle east and many resource rich countries – people just hear x million barrels at y$ and think whow what a lot of money. What they forget is to divide by z million people. As the back of the envelope calculations show, oil alone, at virtually any price, cant make the majority of people in Iraq even moderately well off by world standards. They’re going to have to do something else as well to achieve development. So both the insurgents who are hitting the pipelines and the parties who are dreaming that once the oil flows all will be well are deluding themselves. Oil isn’t really as much of an issue as they’d like to think.

By: jet

jet — Thu, 14 Oct 2004 18:16:30 +0000

Saudi pumps the sweet stuff at a cost of $10/barrel. Iraq won’t have the nice western sponsored infastructure show up over night, so their cost per barrel will probably be significantly higher. But it will still be much lower than the $20-35/barrel it costs in the US. So we have a country of 25 million with a candy resource that requires very little man power to move and gets something like $40Billion per year, and we still have people saying that is “only $6 per person”. That is over $2,000 per person. Me thinks thee dost protest too much. In reality they are already making some of that oil money already. So I guess we will only be adding a 50% increase to the countries GDP which apparently isn’t a big deal to those “progressives” who can’t see something good in Iraq if it was shoved up their ass (and the point is if it was shoved up your ass you wouldnt have to see it, now would you, because the burning discomfort in your colon would be proof positive of its existance). Sorry for the rant but I go off when someone says the sky is red and it is obviously fucking maroon.