OK. I stand corrected on this one. Iraq wasn't fighting with American tanks, but Russian stuff. However, it doesn't alter the main point I was making -- that once Saddam had nationalised the corporations running his oilfields he spent his income more beneficially for his country than the Saudi or Iranian governments did -- at least for the first few years.
Keith
At 09:33 27/05/2003 -0700, you wrote:
Keith,
One point of conflict - the:
"massive military aid from the Americans flowed into the country in order to fight a war against Iran on the Americans' behalf."
This is something that won't go away, though it seems completely false. Perhaps because it fits the need to show Americans in a bad light.
When Saddam invaded, he did so with 2,200 Russian tanks and 450 Russian planes. Where was the American "massive military aid"? Not particularly massive, but in the hands of the Iranians who had mostly F-4 Phantoms and F-5's - along with a few F-14's.
After the initial losses, Iraq was resupplied with Russian T-55 and T-62 tanks, BM-21 Stalin Organ rocket launchers, and Mi-24 gunships.
When the tanker war began, Iraq used French Super Frelon helicopters equipped with Exocets along with and Mirage F-1's and MiG-23's
A couple of years later, Iraq used French Super-Entendard aircraft with Exocets - the same combination used in the Falklands.
French helicopter gunships were also used by attacking Iraqi forces.
When both sides were fought to exhaustion, Russia again resupplied the Iraqis with tanks and aircraft, which allowed them officially to "win" the war by driving into Iran.
Small-arms? Since Kalashnilov first got the idea there must have been well on the way to 100 million AK-47's produced. Guess where a lot of them went? Some of them killed Americans in the recent imbroglio.
So much for "massive military aid" from the US. (Also, it indicates why France and Russia want to be paid for those military supplies by contemporary Iraqi oil?)
So, Keith, old chum - you are literate and obviously well read, with an excellent understanding of practically everything.
Why do you believe things that are manifestly untrue?
I suspect that it is because these things have been repeated so often, they become true - Goebbelian perhaps. He said: "Propaganda has only one object - to conquer the masses."
Perhaps it conquers everyone.
It's quite true that Saddam's chemical weapons facilities were supplied from the US, but also from European countries including Britain.
Business is business.
Something I haven't really checked on is the US supply of biological stuff. I understand that the CDC (Centers for Disease Control) sent strains to Saddam as requested. But, then they sent biological packages all over the world in response to requests from foreign government.
Maybe they shouldn't have - but that allows what in the US is called "Monday morning quarter-backing". That's when we all know how the Sunday games should really have been played!
After all that - the Economist article was good,
Harry
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Keith wrote:
The sudden accession of great wealth, as in winning a lottery, as often debilitates an individual as improves his life. Much the same applies to countries -- and the oil-rich Middle East countries in particular as discussed in an article from this week's Economist below. (One can also instance the diamond, copper and oil-rich countries of Middle Africa, not mentioned in the article, which have not only made their economic situations worse, but has also caused the deaths of millions of people already and continues to do so.)
There's a paradox here which future historians will no doubt point out. The three big oil-producing countries of the Middle East -- Iran, Iraq and Saudi Arabia -- all nationalised the western oil corporations (mainly Anglo-American) in the 1970s and 80s and requisitioned their vast profits, but it was Bush's No 1 enemy, Saddam Hussein, who did the most useful things with the cash. He poured money into the schools (making sure they were secular-controlled), archeological restoration and the training of several professions, particularly in science and medicine. It was only in later years that he became corrupted by power as massive military aid from the Americans flowed into the country in order to fight a war against Iran on the Americans' behalf. (Of course, Saddam might well have become corrupted anyway. This seems to happen to all males when given great power.)
Unfortunately the opposite doesn't apply -- that is, countries without resources don't necessarily do well. Indeed, the industrial revolution wouldn't have got off the ground at all unless England was lavishly supplied with coal fields. But, from then onwards, having the resources in situ didn't matter so much if countries cut somehow copy or cut into the technologies and patterns of trade that were starting to take shape. Two countries (Japan and Switzerland) and two city-states (Hong Kong and Singapore) had no resources worth speaking of yet they all managed to exceedingly well -- in fact, much better than the country which started the ball rolling but wore itself out with imperialism (just as America is doing now, as it happens).
Anyway, back to oil, which some call black gold and which one person (below) calls the Devil's excrement:
<<<<
THE DUTCH DISEASE
Is oil wealth a blessing or a curse?
Three decades ago, the Organisation of Petroleum Exporting Countries (OPEC) sent oil prices rocketing. By 1980, a barrel cost $30, ten times the price in 1970. Consumers suffered, whereas oil producers reaped an enormous windfall. Many assumed then that oil was a gift of God that would transform poor countries into flourishing economies within a generation.
Yet even during those heady early days there were doubts. Juan Pablo Perez Alfonso, a founder of OPEC, complained in 1975: "I call petroleum the devil's excrement. It brings trouble . . . . Look at this locura -- waste, corruption, consumption, our public services falling apart. And debt, debt we shall have for years."
Several new publications argue that history has proved him right. A new book from the Open Society Institute, a foundation financed by George Soros, points out that resource-poor countries grew two to three times faster than resource-rich countries between 1960 and 1990 (even after adjusting for differences in population, initial income per head and other variables). Revealingly, the resource-rich countries began to lag only after the 1970s -- in other words, only after oil wealth started to pour in.
Two factors explain this. The main economic problem is known as Dutch Disease, named after the effects of the discovery of natural gas in the Netherlands in the 1960s. An oil bonanza causes a sudden rush of foreign earnings; this drives up the value of the currency. That, in turn, makes domestically produced goods less competitive at home and abroad. Over time, domestic manufacturing and agriculture fade and growth suffers.
Tricky as this problem is, oil economies such as Norway and Alaska have come up with a clever (though still imperfect) solution: they hive off much of the oil income into "stabilisation" funds, disbursing "dividends" to citizens slowly -- directly in Alaska, via social spending in Norway -- so that the economy does not overheat. Chile, one of the world's more successful developing countries, has a similar fund for its copper revenues.
Contrast this cautious approach with the recklessness of the OPEC countries of the Middle East, which expanded domestic spending by about 50 a year between 1974 and 1979. This enriched the elite, but spawned white-elephant projects and fuelled inflation of more than 15% a year. Venezuela has earned over $600 billion in oil money since the 1970S, but the real income per head of its citizens fell by 15% between 1973 and 1985. It is falling again today.
On top of these economic difficulties can come even worse political problems. Because oil infrastructure can be controlled easily by a few, it often leads to a concentration of political power. Michael Ross, of the University of California at Los Angeles, argues that oil worsens poverty by stunting democratic development, among other things. It also tends to cause, or at least aggravate, civil wars. A new report by Christian Aid, a charity, says that oil economies are more likely than non-oil economies to maintain large armies, and generally do worse on literacy, life expectancy and other measures of human development. In addition, sudden oil wealth affords ample opportunity for corrupting the politicians who award contracts to foreign oil firms.
Wishful thinking?
These recent reports are troubling, but is there really any prospect of change? Surprisingly, the answer may be yes. For some time now, Publish What You Pay -- a collection of activist groups -- has been pestering Big Oil to reveal all the payments it makes to governments, which usually insist that such details be kept secret. Now some big investors are getting in on the act too.On May 19th, ten investment funds managing some $600 billion of assets declared their support for transparency: "This is a significant business risk, making companies vulnerable to accusations of complicity in corrupt behaviour . . . and possibly compromising their long-term commercial prospects." Tony Blair has been promoting the Extractive Industries Transparency Initiative, a scheme that calls for voluntary disclosures. Britain now plans to push for an international approach by raising the topic at the G8 summit in France next weekend and at a ministerial meeting on June 17th.
A multilateral approach would certainly be more realistic than any national or unilateral steps. That is what BP discovered when it recently voluntarily revealed the terms of its contracts in Angola. No other oil company followed suit, and the local powers let it be known that they were displeased. A multilateral approach could involve the World Bank and the International Monetary Fund, which could push countries to publish the details of contracts and to set up resource funds.
Some countries howl that such initiatives violate their sovereignty, but that is a smokescreen: rulers with nothing to hide would surely welcome transparency. Others, including Abu Dhabi and Kazakhstan, boast that they already have such funds -- but these are weakened by a lack of proper oversight. In contrast, the American proposal for dealing with Iraqi oil revenues could result in the creation of a fund monitored by Kofi Annan.
But reform will not be easy. The World Bank recently demanded transparency in return for backing a controversial pipe-line running from Chad to Cameroon. After much hesitation, both countries agreed to set up mechanisms that will allow outside monitoring of oil revenues and vowed that the funds will be used only for development purposes. The ink had barely dried on the accord when Chad's ruler was caught diverting oil money to military spending. Getting firms to "publish what you pay is an essential first step," observed George Soros at the launch of the Open Society book, but the harder step is to get governments to "publish what you receive . . . and then be accountable for what you receive."
>>>>
The Economist 24 May 2003
Keith Hudson, 6 Upper Camden Place, Bath, England
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