8.7.2        The Economic Perspective on Invasion

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The possible economic impact of invading Iraq was outlined earlier (8.4.3):

·      The populations of America and Britain might benefit from increased security of oil supplies and lower oil prices, but these benefits could only come from stability in the Middle East.  Stability was more likely to be achieved through a political process and would have come at a much lower cost than a war. 

·      The war could have been forecast as being more costly than could have been justified by any likely economic benefit to the people of America and Britain.

·      The economic opportunities for the American and British oil companies and oilfield services companies, by contrast, would very probably be realised as a result of an invasion and would have been much less certain if Iraq were stabilised by peaceful means.  Saddam Hussein had excluded them from Iraq, and they might perceive that their association with the governments which invaded Iraq would be a route to receiving preferential treatment – and that was certainly a popular perception.[1]

·      It was planned from the outset that Iraq's infrastructure would be destroyed.[2]  American companies, including Halliburton, could anticipate winning contracts for its reconstruction.

Clearly, invasion was a much less risky course of action for a few big companies than it was for the American and British people as a whole.  And the likely temporary increase in oil prices, as a consequence of the invasion, would also benefit the oil companies – but would damage the economies of America, Britain and the rest of the world.

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