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WalMart vs Iraq


Lies, damned lies and statistics." US President Harry Truman was a famously plain-speaking man and he had no time for number crunching when he coined that much-quoted phrase. But the admirable fellow that he was, Truman was wrong. Statistics don't lie. They can be misused, but the numbers are the numbers. So here-from your largely innumerate correspondent-are a few economic points to ponder about the war in Iraq.

The United States, Great Britain and Australia-the core components of the military "coalition" against Saddam Hussein-have a combined gross domestic product of nearly $16 trillion, measured by the economists' favourite method, purchasing power parity. In other words, what local incomes can buy. Let me repeat that as a number: 16,000,000,000,000 United States dollars. That's a rough measure and possibly an underestimate of the economic activity in these three advanced, industrial democracies.

Now let's look on the other side of the battlefield. Ah yes, Iraq. Well the Butcher of Baghdad, as we all know, sits on huge oil reserves. His is one of the most well off Arab countries. They can afford weapons of mass destruction after all. So they must be flush with cash in Iraq. A worthy opponent for our $16 trillion men on the other side? Right? Wrong. By current measure, Iraq's gross domestic product is a piddling $57 billion. That's right, 57 billion or shall we express it as 57,000,000,000. That looks more impressive, doesn't it?

But it doesn't hide the fact that in GDP alone, the so-called "coalition" represents three hundred times the economic might of it's opponent. Three hundred times more powerful economically. That's 300 times. It's the difference between abject poverty and middle class affluence, it's Rs 1 in a beggars hand versus Rs 300 in the pocket of a rich child going to buy sweets after school. A spoiled, petulant, rich child.

To add a little more perspective, even Nepal, one of the world's poorest countries by any measure, has a GDP approaching $34 billion. That's with all our problems-depressed tourism, non-existent foreign investment, rampant tax dodging by the business class, bad governance and so on. Do I really have to point out that we don't have any oil? And we still come close to Iraq, that anchor of the axis of evil.

Or how about this? Most American states have far bigger economies than Iraq. Hell, California is richer than Britain, as rich as France. If California seceded from George Bush's America tomorrow, and you can't rule that out, it'd be the world's sixth largest economy. California alone has the military and economic might to crush half the Middle East. They can certainly baffle them with psychobabble while some LA gang members sneak up behind the opposing forces and frighten them into surrendering.

Another point to consider. Wal Mart, the World's Biggest Retailer, sold $250 billion-250,000,000,000-worth of widgets and groceries last year. Almost five times the total economic activity of Saddam's Iraq. Wal Mart could beat the Iraqis. But there'd be no need to. The good people of Baghdad would shop 'til they dropped at the merest whiff of the consumer cornucopia in a Wal Mart. And they could have their cars serviced at the same time by on-site mechanic. Most major American companies, most major western companies and many in India and China, tower economically over Iraq even in bad years.

Finally, how about this? Don't forget that Iraqi GDP of $57 billion. Have you seen what the latest estimates are for the cost of the war? Best case scenario? Two or three weeks of relatively "clean" military activity and easy victory in Bagdhad.$95billion tops. That's an American government estimate, probably on the low side and based on assumptions impossible to confirm in advance. But bet on this: the US taxpayer will spend far more than the GDP of Iraq to give the place a new government.

That's what I call bad economics. And someone, somewhere is telling damned lies.

(11 JAN 2013 - 17 JAN 2013)