By the Bush administration's reckoning last month, the cost of waging the war against Iraq will run about US$62 billion. By contrast, the cost of rebuilding that country afterward is estimated at only US$3.6 billion.
For those who argue that the US is being unrealistic about the postwar costs, administration officials have invoked an analogy of the supply-side economic philosophy that they are using to sell tax cuts at home.
Just as President Bush's package of US$726 billion in tax cuts can at least partly pay for itself by stimulating faster economic growth, they say, much of Iraq's reconstruction can be self-financed by the country's own postwar economic expansion.
"Iraq is a relatively wealthy country," said Mitchell E. Daniels Jr., director of the White House Office of Management and Budget. "There is a lot of upside potential."
Rebuilding Iraq, administration officials say, is different from rebuilding a country like Afghanistan, which has fewer natural resources and a primitive infrastructure. Afghan leaders pleaded for US$10 billion in assistance and got pledges of US$4.5 billion from foreign governments and organizations.
By contrast, Iraq has 112.5 billion barrels of proven oil reserves. Its oil fields, though in need of extensive refurbishing, were pumping about 2 million barrels daily before the war and could be revved up to at least 2.5 million barrels a day in less than a year.
Iraq's population is largely urbanized, its health care system is relatively advanced and it has much more than Afghanistan in terms of highways, electricity grids and telephone networks.
Administration officials have not said how much the Iraqi economy might expand. But they note that Iraq would benefit almost immediately from a lifting of the UN sanctions imposed since the end of the first Persian Gulf War. That, combined with an end to the corrupt repression of the government of Saddam Hussein, could mean that Iraq's economy is poised for a substantial rebound.
What administration officials do not mention are the elements of "downside potential" to Iraq's economy. Iraq still faces US$172 billion in unsettled compensation claims a foreign debt of up to US$130 billion, according to the Center for Strategic and International Studies.
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