Unedited Transcript
Middle East Policy Council
Thirty-first in the Capitol Hill Conference Series on U.S. Middle East Policy
In the Wake of War: Geo-strategy, Terrorism, Oil Markets, and Domestic Politics
Speakers:
Leon T. Hadar
Research Fellow, Cato Institute; Washington correspondent, Straits Times, Singapore
Frank Anderson
Former Chief, Near East and South Asia Division, CIA
Fareed Mohamedi
Chief Economist, The Petroleum Finance Company Ltd.
Ian S. Lustick
Professor of Political Science, University of Pennsylvania
Moderator/Discussant:
Chas. W. Freeman, Jr.
President, Middle East Policy Council
562 Dirksen Senate Office Building
Washington, D.C.
January 10, 2003
Transcript by:
Federal News Service
Washington, D.C.
CHAS. W. FREEMAN: I think we'll bring the meeting to order and I'm Chas Freeman. It's my pleasure as president of the Middle East Policy Council to welcome you here today. And for those few in attendance who are not familiar with our organization we do three things: We come up here in Capitol Hill and try to raise issues for discussion that need discussion but are not getting it because they are politically incorrect, awkward, ill-timed or sometimes just ill-defined.
Second, these sessions become the first item in our quarterly Middle East Policy, which is the most often cited journal in its field internationally and here in the United States and again contains a lot of material that you unfortunately will not see elsewhere.
And finally, outside the Beltway most significantly perhaps throughout the country in association with state boards of education and local school systems we conduct training of high school teachers in how to teach about Arab civilization and Islam with an absolutely splendid workbook and a very gifted small group of trainers. And we think we confuse a million or so high school kids every year with a fact or two that they otherwise would never encounter.
So these are the three things we do and up here in these sessions I should say at the outset I am pretty ruthless about enforcing time limits on panelists. Normal panelists get 12 minutes, but I'm going to give one fourteen and a half minutes because he claims he's practiced and that's how long it takes. But if you go much over about 11 or 12 minutes you'll find me moving menacingly in your direction and you may be at risk of being thrown off the podium. So I urge the panelists to try to keep it brief.
We are here today to talk about the aftermath -- Ian Lustick suggested that wake had another meaning and maybe the obituary, I don't know, but anyway the celebration of the death of the war with Iraq is a possibility. But we are here to talk today about the aftermath of a putative war with Iraq.
It is clear that there is a group of people in Washington, some in the administration who are absolutely determined to have a war. They argued in the beginning that if Saddam Hussein had weapons of mass destruction that would justify invading Iran. Then they argued that if he denied having weapons of mass destruction that would mean he was lying and therefore we would be justified in invading Iraq. And now they argue that because the inspectors cannot find weapons of mass destruction that means they're so well hidden that the only way we can find them is if we invade Iraq. And so it goes. And one has to say that more likely than not, given the determination of this group and the influence they have in our government, we will invade Iraq.
We don't know whether such a war will be short or long, whether it will be smooth or difficult but we do know that victory consists in an open-ended commitment to occupy and reform Iraq or apparently it does.
This raises a lot of questions on many dimensions and we can't begin to address all of them, but we have a distinguished group of panelists with us today to talk about four aspects of the aftermath of war with Iraq and perhaps in the course of doing that talking about why perhaps invading Iraq ought to be reconsidered, but the four panelists will talk about the geo-strategic implications, the implications of the war with Iraq for our struggle with terrorism, the implications for oil markets and finally some reflections on our domestic political situation as it might affect it.
I'm not going to go over a whole lot of detailed questions in connection with these but I will note that there are a few questions that are sort of obviously.
It's not clear in the absence of UN authorization of a war with Iraq that we will obtain logistical support from Turkey and Saudi Arabia, which are fairly crucial for the smooth conduct of a military operation.
It is not clear how we can avoid the immediate involvement of Israel as Saddam lashes out at the Israelis in response to our invasion.
It is clear that this war, unlike the last one, is not intended to restore the status quo or defend the principle of international law but is intended to overthrow the status quo and to rearrange the region to our own liking, whether those who live there like that or not. This raises a number of questions.
With regard to the war on terrorism it is questionable whether the war on Iraq will help us to sustain our current focus or build additional support among law enforcement and intelligence officials internationally, which has been crucial in the progress that's been made against al-Qaeda and others who have actually attacked us as opposed to Saddam, who has not.
The big question I suppose, and I will turn to Frank Anderson to talk about this, is whether war with Iraq is likely to minimize or to incite further escalation of terrorist threats against the United States.
It's obvious that when wars occur insurance rates go up, shipping is disrupted, oil production and trade is disrupted. What happens to prices in the short term during a conflict is a major issue.
Will Saddam torch the oilfields as he goes down? And if so what impact might that have?
How long would it take Iraqi production to ramp up to normal levels if indeed it can ramp up after a war?
And what therefore will be the long-term effects on oil supply and prices?
Fareed Mohamedi I hope will address these and other questions.
And finally as we continue our apparently inexorable, virtually unopposed march toward war I look to Ian Lustick to fill the role of loyal opposition, which was a role that was notable mainly by default during the last congressional election when democrats ran for cover rather than question the commander-in-chief and his cohort of supporters of war on this issue.
What if the war goes badly rather than well?
What is the likely domestic political fallout of this?
Given the absence of any real debate in the country as we move toward war where are the fingers going to point if things go wrong?
And perhaps more important, do we have sufficient consensus in the United States to sustain a war effort over the time that will be required to achieve victory or to sustain the occupation for the time that will be required to reeducate and reform Iraq and reshape the region, as I said to our liking, regardless of whether those who are being reshaped like it or not?
These are questions that I hope Ian will address.
With this brief introduction of the topic let us turn now to the subject and the first speaker, whom I did not mention, Leon Hadar, who is now at the Cato institute but has a habit of representing distinguished newspapers in odd places, former bureau chief for the Jerusalem Post in New York and now for the Straits Times of Singapore here in Washington, himself a geo-strategic thinker of some note and, Leon, we're very happy to have you here and I now invite you to the podium for fourteen and a half minutes.
LEON T. HADAR: Good morning. First I want to thank Ambassador Freeman and the Middle East Policy Council for inviting me to take part in this discussion.
My last major contribution to the Council was a magazine piece published about ten years ago following the end of the Gulf War and the Madrid Peace Conference. In that article I anticipated some of the developments that brought about the Oslo peace process. That process, as you all recall, was supposed to lay the foundation for a new Middle East peace between Israel and the Palestinian state and the integration of the region into the global economy.
Now, ten years later and it's the same old Middle East. You have a President Bush. You have an Assad who apparently is surfing the Internet so that probably shows that there is some effect of the global economy. The ayatollahs are still around and the Hashemite and the Saudis, the military is still in charge in Egypt and there is violence in the Holy Land. And there are Sharon and Arafat, older, heavier and ailing. But just like in Lebanon 20 years ago they are ready for a gunfight and, of course, there is Saddam and all of us here.
It sounds very depressing but it all fits very much with the theme of my comments today, that the Middle East has proven to be and will prove to be once again a graveyard of great expectations for outside powers as well as for regional players.
Since the fall of the Ottoman Empire they've all been trying again and again to remake, make and remake the Middle East and at the end, in the words of the Rolling Stones, they can't get no satisfaction. Whether it's Perez' image of a new Middle East or Sharon's fantasy of a new order in the region after the Lebanon war or consider the promise of Nasserism or the ambition of Khomeinism, recall the Six Day War or the 1973 war and then the Egyptian-Israeli peace accord was supposed to change everything and that euphoric mood in Washington following the first Gulf War and the Madrid Peace Conference.
As historian L. Carl Brown proposed, the Middle East can be compared to a kaleidoscope; everything is related to everything else. There are no clear boundaries between local, regional and international issues. A powerful outsider enters the picture and hopes to impose an agenda but it only produces countless efforts by unsatisfied players to form opposing regional alliances and secure the support of local and international powers. The outside power tints the Middle East kaleidoscope but, as Carl Brown said, the many tiny pieces of colored glass move to form a new configuration that looks very different from what was expected.
On the top of that list of unfulfilled expectation in the Middle East was the British imperial project in the region in the early 20th century. Driven by strategic interests, the smell of oil and religious sentiment the English-speaking people invaded the Middle East and they tried to establish a new and stable order.
And now in the early 21st century we seem to be on the even of an hegemonic American undertaking in the region. The Anglo-Americans are determined again to the Middle East to establish a new and stable order.
It seems to me that we can say about the imperial designs of great powers in the Middle East what George Bernard Shaw said once about marriage, that it was the triumph of hope over experience.
In the old movie the British created Iraq, put the Hashemite and the Saudis in power, maintained influence in Egypt. They tried to end this or that cycle of violence between Arabs and Jews in the Holy Land. We know how that movie ended. To put it in economic terms, the costs of the British Empire in the Middle East were higher than the expected expectation. Resistance from regional players including terrorism, changes from global powers including the U.S. ally, economic decline and opposition at home led eventually to a long and painful withdrawal of Britain in the region, culminating in the 1956 debacle.
This time the name of the movie is the American unilateral moment in the Middle East, but we have a feeling that we've seen that movie before, different actors but similar script, again recreating Iraq, navigating between the Saudis and the Hashemites, preserving the influence in Egypt, bringing an end to another cycle of Arab-Jewish violence. Some in Washington are even adding a Wilsonian democratic sidetrack to the old new order script -- an Iraqi federation of Arab Sunnis and Shiite based on western and liberal principles, trickle-down democracy, secularism and pro-Americanism that would transcend the entire Arab world and help bring peace between Israel and Palestine. This is what's called the Big Bang scenario for the day after in Iraq and the Middle East, that many of the neo-conservative intellectuals here in Washington are proposing, a new age of stability, democracy and prosperity under American influence.
On the other side of the debate there is a mirror image of sorts, call it the apocalypse now scenario, bloodbath in Iraq, the rise of the Arab strife, collapse of the regimes in Saudi Arabia and Egypt, another 1973 oil crisis.
Now, I don't think that the choice we will be facing will be between the big bang and apocalypse now. A war in the Middle East will produce change in Iraq and the Middle East and movement of the kaleidoscope, but it should not be equated with progress, with Wilsonian pipedreams.
And there will be two strategies to deal with the change, a relatively short low-cost process of U.S. adjustment or a longer and more costly process of adjustment that would resemble that of Britain's Middle East experience in the last century.
From my realpolitik perspective a low-cost U.S. adjustment would mean, one, recognizing that Iraq is only one stage in a very complex strategy involving diplomatic, economic and military efforts. This is a strategy aimed at containing threats, including radical and anti-status quo powers in the Middle East and in the so-called arc of instability stretching from the Balkans to the borders of China. This is the largest strategic context, the big picture, if you will, in which the war on terrorism will take place in the coming years.
Two, this will not be and should not be a narrow crusade, a missionary walk. Political freedom, democracy and the expansion of human rights could be a byproduct of such a strategy but they are not the main goal. In fact, part of the cost of this strategy will involve getting into bed with authoritarian regimes and unsavory characters, many SOBs.
Three, and this is probably the crux of the matter from my perspective, the U.S. global position today is provided with some obligation to play a role. That is only the case if the core U.S. national interests are at stake. The response to 9/11 was clearly such a case. But the U.S. does not have to shoulder all the costs of implementing such a strategy and costs here are not only measured in body bags and dollars but also in terms of harm to political freedom not in the Middle East but here in the United States. And the bottom line I think is that American people will not be ready to create and sustain an empire in the Middle East or elsewhere.
In order to advance its interests in the Middle East and in the arc of instability the U.S. I think should work with the members of the Northern Alliance. Now I'm not referring here to the opposition forces that helped bring down the Taliban in Afghanistan but with the consort of big western powers that after fighting each other during most of the 20th century over the control of the so-called world island of Eurasia are not ready to manage it together, the U.S. or the Anglo American, Europe, Germany and France, of course, and very important Russia. These global powers will be ready to get there with what Paul Kennedy calls regional influentials such as India, Turkey, Iran, South Africa, Brazil and in addition to containing the threats in the Middle East and the peripheries the other important challenge will be integrating greater China into the international system, at the same time bringing it into the alliance of mostly pro-status quo powers.
A win for the Northern Alliance in post Cold War Iraq and the Middle East would mean that no challenger will be able to tilt the kaleidoscope at least for a while. Iraq could see the revolution of two or three protectorates controlled by the combined forces of the U.S., NATO, regional forces in the UN. Think about the dilemmas facing dealing with the Albanian Kosovos and apply that to the Iraqi case and you would probably get a U.S.-Turkish condominium in the south under a French administrator, probably a Sunni-Shiite confederation along the lines of Bosnia under some pan Arab control in which Iran will be permitted to exert some influence, probably a small Palestine that could emerge also along similar lines as an Arab international protectorate. In fact, my guess is that in the coming years some of the other entities in the Middle East and the entire arc of instability, certainly Afghanistan, perhaps even Pakistan would look more and more the way Yugoslavia looks today and Iraq would look in a few years.
In the end the U.S. has an interest to encourage other members of the Northern Alliance to play a more active diplomatic and military role in the Middle East. The EU is more dependent than the U.S. on oil supplies from the Middle East. Taking into consideration the EU's geographical proximity to the Middle East and it's economic and demographic ties to the region, there is no reason why it should not share more of the cost of intervention in the region.
Again, I know that this strategy doesn't sound very inspiring, like that of World War II, it ignites memories of the Congress of Vienna or the Yalta Conference, but I think that this is the strategy and not American imperialism that would evolve eventually either by design or default. In that context I think that the Bush administration is not dominated by ideologues; I think at the end of the day mostly pragmatic people and that eventually the conflict and the cooperation between the Rumsfelds and the Powells in the administration, what you see at the end is a policy of adjustment and not imperialism. And I think that has been clearly demonstrated in Afghanistan or in the policies now towards North Korea and China.
In conclusion, I have a feeling that in another ten years we would recall all this talk about an American empire in the same way that we now are reminded of all the nonsense we read and is written also about globalization and the Internet in the 1990s. Remember some of the titles of books such as The Collapse of the Nation State, The Borderless World, The New Economy, The Coming Great Boom, Dow at 24,000. The American empire will prove to be I think one more intellectual fad that was oversold and then was overrun by events.
Thank you.
(Applause.)
CHAS. W. FREEMAN: Well, that was certainly a big picture and I hope will give rise to much discussion as we reach the discussion period. I would now like to invite Frank Anderson, who had a very distinguished but necessarily obscure career in the Central Intelligence Agency, focused on the Near East and South Asia and was actually the chief of the Near East and South Asia division in the Directorate of Operations and has been intimately involved with Afghanistan as the head of the Afghan task force I believe and very familiar with the problems of international cooperation against non-state threats, to come up and give us his thoughts on the implications of a war with Iraq for the struggle against terrorism.
FRANK ANDERSON: Thank you. I'm going to be looking up. I'm not seeking divine guidance but I'm going to try to watch the clock not to get over my allotted time.
You'll note I came to the podium without notes; it comes from a long profession of not wanting to be caught with the paper and that which I've recently written down.
The number three is extremely important in trying to look at this phenomenon in what's likely to come in the coming months. CSIS did a thing on the likely consequences of war and they approached it with three potential ranges of outcomes: a rapid, benign war in which it's only a matter of days or weeks the Iraqi armed forces are quickly defeated with low casualties on both sides, a new administration is quickly set up and the world begins to adjust in a benign environment. And I'll take far too much time to go into details of how that might be or the prospects for it, but that's the benign option.
I'm going to add to that the most benign option and that is victory without war. I will stick my neck out a little. I really do believe it is the most likely outcome of the next few months and that is that by placing forces who are ready to go to war with Iraq, not just credibly threatening but really credibly creating a threat to the existence of the Iraqi regime, the rational thing for the Iraqi regime to do is to disarm. Rather than a preemptive attack they have the option of preemptive surrender and that preemptive surrender could leave them intact; not a happy thing for frankly the world and certainly the people of Iraq but given the costs of the other options not something to be dismissed as an unhappy outcome.
The next is the sort of mid-range war that lasts some number of months, high casualties on both sides, significant disruption to the energy markets and all of the things that would raise international ire, rage against the Americans and their allies.
And the fourth is we go in there, we lose. Not likely but a not to be dismissed outlook. Yes, there is no question that the armed forces of the United States, with or without a coalition, could quickly defeat the armed forces of Iraq, but being able to successfully occupy that country over a period of time and reestablish an administration, which anyone would regard as a success, is a significantly open question.
So those are the three range of possible outcomes in which we should look at the effect on terrorism and that threat on terrorism.
You go to another three; terrorism is three closely related but nevertheless separate phenomena. The one phenomenon is state supported terrorism with which we live for most of the 1960's, '70s and '80s and these were organizations, some like Fatah is the largest group in the PLO and the Irish Republican Army have almost become parastatal. But others, the various range of Palestinian organizations, in fact, the IRA and the PIRA and others existed and were able to operate in an environment in which states had the ability and the motivation to provide them support, provided them training areas, provided them documentation, use of diplomatic channels to ship weapons, communications and states mostly involved in the great Cold War struggle but also in the Middle East struggle, some in narco-terrorism but states were able and willing and interested in supporting these organizations for state geopolitical or statecraft purposes.
The next phenomena are the non-state actors. The archetype of this is Osama bin Laden, who acts not with the support of the state, not to advance the interests of any state but for in his case a distorted religious and geopolitical motivation but is not supported by a state, unfortunately is not also constrained by the interests of an organization that's acting on behalf of the state and would have to take the risk that the terrorist organization would bring damage to the interests of their supporters.
And the final one, in fact, doesn't meet the legal definition in the United States of terrorism, which we describe as acts or politically premeditated violence against noncombatants by clandestine agents or sub-national groups, and this is terrorism not by clandestine agents of anyone or sub-national groups but just people who are whacked out, angry and commit the crime of murder or vandalism.
Another three in terms of what are the likely impacts of a war on Iraq. I'm going to go to the law, at least criminal law in the way one tries to prove a crime in a case, but it's also not at all a bad idea on how to examine terrorism and, in fact, plan the counter-terrorism and that's the triumph of motive, means and opportunity in what will be the impact of this war on motivation of those three kinds of terrorist organizations, what will be the impact on their means to carry out terrorist acts and what will be the impact on their opportunity to do so.
And without notes, it just hit me, I think you can probably come up with another three; there are probably three ways in which you have to attack or deal with terrorists. One of them is traditional statecraft and that is you apply all of the tools of statecraft against other states or parastatal actors: diplomacy, economic aid, information and propaganda and at the other end of the continuum the application of violence. In the center is law enforcement and intelligence work and at the end is the soft stuff.
All right, now what are we going to have if we have a war? If we have a quick and benign outcome, ideally if we have victory without war the war on terrorism will be at most marginally effective. And now I risk, I remember laughing at the mayor of this city, a former mayor, Marion Barry saying, you know, if you don't count murder the crime rate in this town is really low. If you don't count 9/11 the phenomenon of international terrorism is continuing on now a 17-year decline and we're in a situation where because of 9/11 the degree and the effectiveness of international cooperation against terrorist organizations is at an unprecedented high and effectiveness. We can argue about it in the three minutes I've got left.
In the middle course I would also argue that motivation doesn't go up under this benign issue, opportunities don't go up and the means for terrorists to act don't go up. In the benign and in the long course you're affected by motivation. People are going to be increasingly pissed off, depending on the amount of time it takes us and any allies to achieve the end of hostilities in Iraq and to set up an acceptable follow-on regime.
In terms of means, Iraq is not now -- I'm probably going to come into dispute with members of the administration -- and has not been since 1991 a significant state sponsor of terrorism. They tried it in and around the Gulf War and they failed miserably. They were particularly inept international sponsors of terrorism and they haven't gotten anywhere further.
So the means of Iraq, whether it's in or out is not going to significantly affect the level of terrorist threat around the world. Opportunities, taking an American or coalition force, placing it in Iraq and trying to occupy the country over a long time I would argue will create a number of opportunities not really for the state sponsors of terrorism because they're not going to take the risk of having their fingerprints on an attack against a U.S. military organization or person, not too much on the non-state actors who are internationally organized because they won't be interested or able to get into Iraq, but that whacked out individual who's just enraged and either hears a political or a religious speech and on that basis goes and gets a gun, a knife or a Molotov cocktail and finds a target, those opportunities will be greatly increased by tens of thousands of Americans flocking around, riding around and staying around Iraq.
I think I'm out of time.
CHAS. W. FREEMAN: You can take a little longer. No? All right.
FRANK ANDERSON: Actually I think I'm there.
CHAS. W. FREEMAN: All right. (Applause.)
Thank you very, very much. I thought that actually it will be very worthwhile to reread because it was, although off the cuff, a very interesting analytical framework that you presented. And I take it that one of the main variables that you see affecting the future is, in fact, the character of the American presence or occupation after the war, whether this is like the presence in Kosovo or like Napoleon's experience in Spain or the Israeli experience in Lebanon or the French experience in Algeria to sort of go from the benign to the horrible, will make a huge difference on many levels including on the topic that that you just so cogently addressed.
We turn now to the issue of energy and oil, which, contrary to what a lot of the sort of nitwit left says, I don't think is the issue with Iraq but which is surely going to be very much affected by what happens in American combat with Iraq and its aftermath. And we have with us Fareed Mohamedi, who is the chief economist for the Petroleum Finance Corporation and before that was the vice president and a senior analyst at Moody's Investor Service, who grew up in the region in Bahrain I think but is not from the region, and who is a very, very well known and knowledgeable analyst of the petroleum, oil and gas scene. Fareed?
FAREED MOHAMEDI: Chas always raises the big issues and then gives me 12 minutes to talk about them. Anyway, I'll try to answer some of the questions that you raised in my 12 minutes. And I will try to distill our collective thoughts in PFC energy and try to shape and put some structure to the world oil markets in the next several years. Undoubtedly much of what I'll say will be wrong or may not transpire, but I'm going to try to bring together a number of complicated variables and factors to bear on this issue.
During the next several years we're likely to see momentous changes in the global oil market. The main catalyst of this change will be the rapid rise of Iraqi oil production following the expected invasion of Iraq. Many proponents of the invasion have argued that invading Iraq to, quote, "liberate" its oil sector should be one of the goals of the administration. In their logic this is not so U.S. oil companies can grab Iraqi oil assets, as some detractors of the administration have suggested. In fact, they're happy to sell it off to anyone of whatever nationality, sort of. They're objective is to induce lower oil prices, be less dependent on large Gulf oil producers like Saudi Arabia and Iran and possibly even trigger an economic collapse in these two countries and bring down what they perceive as being hostile states to the U.S. and Israel. On all counts I believe that they may not get their wish principally because they have not assessed the unintended consequences of bringing on a rapid rise in Iraqi oil.
I'd like to go into this issue in a little detail but I'm getting a bit ahead of myself and I will return to it later. We have some short-term oil market issues to deal with before we get there.
If North Korea's nuclear shenanigans were not bad enough for an administration trying to prosecute a Gulf War, the loss of nearly 2.5 million barrels a day of Venezuelan crude due to the oil workers' strike, that could not have come at a worse time. Plus oil demand has started to pick up a little bit; winter maybe underlying economic growth.
All these factors have contributed to a current oil price of around $32 a barrel. At least $4 may be attributed to the Venezuela issue and another $4 to the fears about Iraq.
So the oil markets are entering a period of an actual shooting war in the Persian Gulf, the most important oil-producing region in the world, with fairly elevated prices.
What happens next in the immediate short term depends on three factors: one, what the U.S. administration does, what OPEC does and what type of war ultimately we'll have.
The U.S. administration has decided not to use the SPR, the Strategic Petroleum Reserve to offset Venezuelan supplies going offline. Some have accused the administration of, quote, "solving the problem through prayer," maybe a faith-based oil policy, but government officials have defended themselves by saying they do not use the SPR for short-term political reasons unlike the previous administration.
As for OPEC, it is scheduled to hold a producers' meeting this Sunday and is likely to raise oil production. Much of this new oil will come from Saudi Arabia and the Gulf, a not-too-subtle reminder of who really is the producer of last resort, unlike last year's favorite candidate, Russia.
So how will oil prices then go when the shooting starts? That depends on the extent of the war and the effects of the possible spillover in the region. A quick war limited to Iraq will lead to prices jumping from around $32 to approaching $40 and maybe around in that region. A quick victory then will lead to a fairly rapid crash in oil prices.
Most of the losses from Iraq, about 1 to 2 million barrels a day -- well, around 2 million barrels a day, let's put it that way -- could be easily offset by OPEC and that's already being planned for at the OPEC meeting this week.
If Iraq attacks Kuwait and expands the war, leading to another 2 million possibly barrels a day, prices are likely to jump into well above the $40 range. And in that sense Saudi Arabia and OPEC and other OPEC countries could raise further, and they have a certain amount of the excess capacity to do that, but surely at that particular point the U.S. will trigger the SPR. It has around 600 million barrels in stocks and could easily counter most disruptions at that point.
Finally, the more drastic scenario is an attack on Israel and a disruption from the oil markets' perspective a bigger disruption of Saudi oil supplies, an attack on the eastern province. If this scenario leads to more than 3 million barrels a day of disruption we could see prices rising well above $50 in our estimation.
The main line of defense in trying to make up this lost oil would, of course, be consuming country stockpiles in a coordinated IEA release of stocks around the world as they have already planned for.
Beyond these short-term bullish scenarios we see a very different picture for the medium term. There is a great possibility for much lower oil prices over the medium term, especially if the war is contained to Iraq and does not lead to much damage to its fields.
The main elements of the medium term outlook are the following. First, expected slow and modest economic recovery over the next few years will lead to fairly slow growth in demand.
Second, non-OPEC supply will likely pick up over the next few years. By non-OPEC I mean new supplies from the Gulf of Mexico, offshore West Africa, Brazil and the accumulation of smaller production increases from around the world, which are a result of the high prices of the last three or four years.
OPEC minus Iraq therefore will not be able to increase its supplies beyond current levels, pretty much into 2006, 2007.
Now, what happens when Iraq comes back? Depending on the type of regime in Baghdad and therefore the type of oil sector we have, much more on this issue of what type of oil sector I'll get into in a few minutes, we expect new Iraqi output to rise between -- well, firstly start off by rising back to its 3 million capacity and then depending on the regime to go from between 1.5 million barrels a day of more crude to 3 million, so a capacity of 4.5 to 6 and that's the sort of range we're seeing up to about 2006, 2007 and maybe a little later.
For our purposes let's work on an increment of around 2 million barrels -- I'm being fairly conservative. How will OPEC accommodate this new Iraqi oil?
Before I answer that I just want to tell you about a looming internal problem within OPEC. They feel that they'll be pinned at these quotas for quite a long time. We envision that at an OPEC meeting, let's say 2004, January, they will say we are not going to take this static situation anymore and actually Saudi Arabia, they're going to turn to the Saudis and say you take a bigger proportionate cut and accommodate our new oil and accommodate Iraqi oil, since to a large extent it's the Saudis that have benefited from Iraq going offline in the early '90s.
What will the Saudis do? In that sort of scenario most likely, being cautious players, being actually wanting stable oil markets, they most likely will say, okay, we'll make some greater concessions if you are accommodating, too.
A more aggressive strategy and actually a better strategy for the Saudis in many ways over the longer term and for OPEC would be to crash oil prices and not agree to this and not in a sense accommodate Iraq and do what happened, what they did in '99 inadvertently, and that is to push the burden onto non-OPEC producers, the high-cost producers and over time induce a decline in non-OPEC production and then come back and take that production for themselves.
Now, that would require a fairly low oil price, $14, $15 a barrel and now you look at me and say, well, how can these economies take that? I mean, they can barely take it at $30 a barrel.
If you look at the numbers, if you look at the macroeconomic situation in some of the Gulf countries, Saudi Arabia, Iran, even Algeria, they have accumulated a lot of assets and paid down a lot of their debt. Financially they're doing a lot better than they were just a few years ago. And to a certain extent they have the war chest to do that if they have, in a sense, the will and the guts to do that.
This will be disastrous for Indonesia, Russia, Venezuela and Nigeria. None of these countries can take that type of low oil price for a period of 18 months to two years.
So for those advocating a rapid restructuring of the Iraqi oil sector with massive foreign investment resulting in rapidly growing output levels the unintended consequences could be much lower oil prices, lower oil revenues for the new government in Baghdad and a host of political problems around the world, plus for those that see Iraq as a means to lessen dependence on the Saudis in the end the world might become more dependent on Saudi oil and, of course, on Gulf oil if you add in Iraq. So much for supply diversity as a policy.
Finally, I'd like to raise another issue. We in typical economist fashion tend to assume the oil sector in Iraq. Let's not for a second. We know the type of oil sector we choose will ultimately determine the type of government. In that sense I'm quite economic and an oil determinist, especially in these countries with large oil sectors. If the oil sector is controlled by the state, as it is now, it is almost inevitable that a non-democratic regime will emerge. There are notable exceptions to this like Norway, but in general oil is an important contributor to authoritarian rule. Either a new man with a moustache or a recently returned exile will gain control over the oil sector and use its proceeds to buy and bully the population.
But at the other extreme if you totally liberalize the sector, distribute the revenues directly to the people or through controlled funds as the World Bank has done in Chad, you have a very efficient sector that attempts to maximize production. Such an oil regime will ensure no individual control over the resources, reduces the chances of a state reappearing and enhances the possibility of democracy, but there's the rub. The first is good for orderly oil markets since a slower rise of Iraqi output will make OPEC management much easier. The latter scenario is extremely disruptive and could lead to political problems around the world. Now you see why the next several years could be very interesting in the Chinese sense of the word.
Thank you.
(Applause.)
CHAS. W. FREEMAN: Thank you. That was very stimulating and again I hope we will have an active discussion as the panel concludes.
In anticipation of that, let me say that when we come to the comment and question and answer session if you will indicate to me that you want to ask a question I will note you down in my magic pad here and then give you a wink and a nod to come to the microphone and identify yourself and place your question or fire off your comment, as the case might be.
But before we get to that session we come to the final panel discussion of some of the implications of all of this for American domestic politics and I think we're very fortunate to have with us once again -- I think this is probably the second or third time that I've had the pleasure of presiding over a panel with Iran Lustick from the University of Pennsylvania. He's been an analyst in government and a consultant on Middle East policy for quite a number of administrations and his distinguished list of publications and biography are in the program so I will not go on and keep you any longer from hearing Ian. Please.
IAN S. LUSTICK: Thank you. Thank you very much. I certainly have plenty to say about how to think about the impact of a war in Iraq and, of course, plenty to say about what it might mean for Israel and the Palestinians, but I'm not going to do that. I will talk about that in the discussion, question, if I get the opportunity, but I don't want to give a preemptive victory to those building momentum for the war in Iraq by accepting its inevitability, which I do not.
I also believe that the political aftermath of the war in the United States and the struggle over the occupation of Iraq will be greatly affected by the clarity and power of the arguments made against the war before it occurs.
So I'm going to talk about those briefly.
Why the war? Why? Where is the demand for the war? What is the imperative for the war? Why now? Why a full-scale invasion? Those are the questions that you ask about any war and those are the questions that we can hear the American public asking, though we don't hear them very often with clarity on the talk shows. We can hear the questions if we listen; we cannot hear the answers. The usual answers would be sought on the demand side: What is the demand for the war, what has Saddam done to us, what has he done recently that he hasn't done in the past, why now, how threatening is he, how much support does he or doesn't he give to the terrorists who have manifestly made us their enemy, how fast will he have the bomb or really lethal bio and chemical weapons, how much better would a war be as a policy treatment for any of those threats than other possible combinations of policies? Those are the questions that one would need answers for, but none of these questions receive anything like satisfying answers.
Why? Because the war is not developing in response to a demand. It is not a demand-side war; it is a supply-side war.
What do I mean by that, a supply-side war? Well, we've got to go back to this cabal of neo-conservative warriors that we know about who've been around, were around for a decade before 9/11 and who were fully committed then, as they are now, to an American military enforced new order in the Middle East with pretensions and fantasies of democratization of the region of an American rule, domination of the oil wealth there, establishment of large, semi-permanent military bases in the heart of the region and the elimination of all pressures on Israel to withdraw from the West Bank and Gaza.
This fantasy, this vision of a small cabal required then as it does now a war to overthrow Saddam and to gain control of Iraq and the oilfields and the geopolitical assets it represents. To rebuild Iraq is emblematic of the sheer greatness and overwhelming power and responsibility of the United States in the post-Cold War world as the irrefutable sign of the possibility and rewards of grand-scale unilateralism.
This has been their fantasy of a small group for a long time.
So why wasn't it implemented? Well, the first Bushies were typically cautious -- we can read Kissinger, we can read Scowcroft, we get the idea -- and gun shy about such things and skeptical of such visions. Remember the vision problem. And then there was the Clinton abomination for eight years.
And then the second Bush administration when it came to power too split on the issue down the middle, and anyway whose ratings were too weak among the public to think about such enormous investments and whose leadership was too uncertain to advance clearly toward implementing the invasion and the policy it stood for.
The question was where could the political capital for the war come from and the answer came on 9/11. It unleashed a Mississippi river of fear in the United States and a belief pervasive but only talk show deep that grand sweeping actions of some kinds were absolutely necessary, called for and were ready to support them. We don't know what they are but they'd better be heroic. They should be; after all, look what happened.
The first thing that happened was Afghanistan and there was indeed strong support. I supported the war but I warned that we needed a Goldilocks outcome and we didn't get it. And what did I mean by that? What I meant was if we did not win quickly enough, if the war lasted through to the summer we would end up destabilizing Pakistan and risking nuclear events in South Asia. On the other hand, if we won too quickly, if we broke things in Afghanistan too successfully, and that's definitely what we're good at, we're fantastic at breaking anything we can find -- it's putting things back together that's the tough question -- but my fear at that time was that if we broke the Taliban too fast and it was perceived in the United States that we had a quick and relatively bloodless on the American side victory, that this would give the necessary fill to that wing, that cabal in the administration that was ready to say that the template for Afghanistan victory was the same template we ought to use elsewhere. And if the midgets like Powell who were suggesting that we shouldn't take the initiative in Afghanistan with the Northern Alliance, proven wrong there will be proven wrong again.
What I wanted was a war, a Goldilocks war, not too fast and not too slow but we didn't get it. We got one that was too fast and it gave the whip end to the cabal.
So that's where the political supply came from. Suddenly we had a president rocketing in the polls and which president, who, I mean, even Millard Fillmore sitting in the Oval Office after 9/11 with the mantle of president could have done that. Suddenly the political capital for such a grand enterprise is available and in such quantities that the absence of rational arguments on behalf of the war could be rendered irrelevant. Faced with a prospect of the window of fear vanishing, that is the American people have other things on its mind, including its pocketbook, this window of fear is not forever. It's why this part of the government was intent on having those pictures of the World Trade Center blowing up shown time and time again for months. Faced with the prospect of the window of fear vanishing and the supply of support for the fantasized war drying up, the cabal -- Wolfowitz, Rumsfeld, Cheney, Fife, Perle, et cetera -- has moved full bore towards their objective, not because of the demand but because the political supply is currently available but not for long.
I could actually use what Frank suggested when he talked about how you solve a crime. Think about motive, means and opportunity. The crime here is a criminal war. The motive I've already shown you in the minds of the cabal. The means, vast American military predominance. The opportunity, the sudden appearance of a supply of political capital unavailable before.
This argument explains the rush to war as a political victory of a preexisting cabal and its use of the 9/11 aftermath to suppress bureaucratic intelligence and military opposition to its fantasy. This also explains the moronic nature of most arguments offered by administration spokesmen, including a contradictory character.
We can't deter Saddam. What will he do if you attack? Will he use his weapons of mass destruction against us and our troops? No. He will be deterred from doing that.
One thing we know as Republicans is big government doesn't know how to build schools in Peoria. In fact, it doesn't know how to do much at all. Can you rebuild Iraq? Yes, absolutely. The biggest threat to American security is an axis of evil and the protagonists in that axis of evil we know -- North Korea, Iran and Iraq. All of a sudden North Korea is someone we can talk to and Iran, once we're over there, tangled up with an Iranian supported Hezbollah and Shia guerrillas tangling with other folks that we're trying to protect or fight against, we're going to be dragged toward a war with the other pieces of the axis of evil. We haven't even talked about that. So either Iran really is a part of the axis of evil that has even a greater weapons of mass destruction capacity than the Iraqis and we are going to go after them with the same logic or the whole thing doesn't mean anything anyway; just a slogan.
The war on terror is a war on Iraq, the same thing, and then they take our first line of defense, thousands of state police and police officers who are the first response in this war on terror and they put them on ships floating in the Arabian Sea and the Persian Gulf for months, making us vulnerable and overwhelming our first response lines against terrorism in this country.
But let's not only rely for irrationality on the administration's empty rhetoric but let's look at what has been regarded as the single best book advocating war against Iraq, Ken Pollack's book, The Threatening Storm, and it is a very good book. I'm assigning it to my students. This is the best argument available against the war. Because what does it say in the end, after arguing for 400 pages that a full-scale unilateral U.S. invasion, if it's willing to be unilateral, is the only answer? It says, well, wait a minute, there are actually several conditions; only if those conditions are met do I recommend a war. But you never see those get discussed; what are those conditions? I don't have time to quote them but I'll list them.
CHAS. W. FREEMAN: Go ahead and take the time.
IAN S. LUSTICK: I've almost memorized them. I don't think I need to. One, you have to be willing to pay the cost, billions of dollars a year over ten years. Are you willing? If you're not, don't do it.
Are you willing to stay for a decade and are you ready to say that the United States can remain united, not enter a Vietnam-era decade of division over how to maintain an occupation? If you can't, don't do it.
Are you willing to be actively involved before the war in ending the Israeli-Palestinian conflict, at least in getting it down to very low levels and perceived by the entire Arab world as on its way to solution? If you can't, if you won't, if you don't, don't go to war.
If you have not completely defeated al-Qaeda, if you have not brought an end to monthly warnings of infiltration and possible red alerts or orange alerts, if you're risking a war on terror at the same time you're making war on Iraq; in other words, if you have not completely won the war on terror, don't make war on Iraq. That's the best argument available in book form, it is said, for the war against Iraq. That's why I'm assigning it in my course. It's such an interesting analysis.
Finally, when anyone thinks of an imperial vision in western civilization they think of Rome. They may not think consciously but they're thinking of Rome and that's where the phrase pax Americana is in all the newspapers. Well, that's good. Let's think about what Mesopotamia meant for Rome. Which Roman emperor conquered Mesopotamia? Trajan. It was a catastrophe for Rome. He conquered it and they were stuck with it on the edge of the Parthian empire for half a century, more than half a century before finally one of the great Roman emperors, Hadrian, realizing this was a cancer within the empire and a huge risk to his own future, facing down revolts by patriotic generals, withdrew from Mesopotamia and the highlands in Scotland. These are the parts of the empire he couldn't handle.
What a contortion it required inside of Rome to correct a drastic mistake made by an expansionary move made because it was possible, but there was one thing that Rome did get out of the invasion of Mesopotamia, one thing that Trajan and his soldiers brought back to Rome, the plague. Thank you.
(Applause.)
CHAS. W. FREEMAN: Well, after that I'm convinced we ought to go to war. (Laughter.) We come now to the question and comment session and, sir, you're first and would you please tell us who you are and go to the microphone and others who wish to.
QUESTION: My name is George Hishmi (ph), and I'm a correspondent for several papers in the Middle East.
I've got two questions, if I may, sub-questions. One is on oil. I have the feeling that Saudi Arabia will not like to have Iraq oil production after a war increased. Saudi Arabia is in need of money. Their economy is I assume suffering. If you could address that?
The other, which I think Professor Lustick touched on that, are we capable of supporting a war with Iraq, considering the state of the economy in the U.S.?
CHAS. W. FREEMAN: Fareed?
FAREED MOHAMEDI: Of course, the Saudis don't particularly like the prospect of Iraqis ramping up. I mean, they want to maintain fairly orderly oil markets. They'd like to keep prices with Open at around $24, $25 a barrel. But to a certain extent it's inevitable. I mean, they understand that this is a country that's going to one day come back and they're hoping that demand, increases in demand will accommodate both non-OPEC oil and new Iraqi oil.
But I think that as I said in my speech that they face a real dilemma in a sense. They've always said let's have orderly oil markets, make sure that we maximize our revenues but here if they continue to in a sense subsidize the rest of the world one day they're going to find it much harder to control. And now they have been actually given a means to deal with and to maintain their dominance in the oil market by what happened in '99. I mean, if you have low oil prices for a short period of 18 months to two years you can wipe out very expensive oil in North America enough that you can then take over that portion of supply that goes offline.
So actually in many ways the Saudis should have a policy, which is not for orderly markets but for disorderly markets to threaten not only investment by private oil companies but by non-OPEC countries.
Now, on the financial side in terms of their economics, their situation has improved enormously. They've stabilized their budget, they've rebuilt a lot of their foreign assets. Recently they partially privatized their telecom and used some of the proceeds to pay down some of their domestic debt.
So an ability to deal with low oil prices for a period of time, they can do it. It will cost them, there's no doubt, and I think that is where they'll have to have some guts to do that and it's always risky to trigger a price collapse and then hope that it goes back up, but I think they and the Iranians have never been in a better financial position. Iran is a net creditor to the world right now. Its assets are higher than its liabilities, external assets. It's got $20 billion in foreign assets. It had one in 1998.
So things have changed remarkably for these two important OPEC countries.
CHAS. W. FREEMAN: I think there was a second part to that, which was the ability of the U.S. economy and the U.S. budget to sustain the war effort. I don't know whether you wanted to comment on that or if someone else would like to.
IAN S. LUSTICK: I'm not economist but I don't see any problem there in absolute terms. The point is that if it's not what we see in the polls is majority support for a war, what about if there are American casualties. So that what the government is going to try to do is fight a war that pays for itself by looting the oil and then generating contracts for American companies in Iraq.
The question is not can the American economy sustain that kind of an expedition. Over a long period of time it can; it can borrow for the future. The question is whether the political cost of doing so will be tolerable for those managing it and that I don't think will be the case.
CHAS. W. FREEMAN: Leon, you have a comment?
LEON T. HADAR: I think in the short term we will be able to sustain economically a war. I think we should think more about the long-term and I think that a good analogy will be with the Kennedy-Johnson era. The Kennedy presidency actually started with a tax cut, then you had military spending, then you had inflation. So I mean we can see a process like that in the long run if you have military spending, we have tax cuts, this is going to put pressure on the U.S. economy. You can see a situation in which the dollar is going to fall, the Euro is going to go up, the Europeans are going to be in a good position. The Chinese, who are not doing anything, are going to economically develop. So the U.S. is going in the long run I think because of this intervention is going to find itself in economic problems vis-à-vis other players.
CHAS. W. FREEMAN: I think, if I may, that part of the problem in addressing this, of course, is that we haven't a clue how much the war is going to cost or how long it's going to last. I'd say the U.S. economy probably is large enough to sustain a regional war effort for quite a long while before feeling significant economic strain. And the key question I think is, as has been suggested, political, and that is if war turns out to be something other than a videogame in which no real person dies and if it turns out to be something that actually affects you and me at home rather than something that's on the nightly news, then we have a very different situation and we go into this war, I'm sorry to say, with a kind of mentality nationally that war is something that happens to other people not to us and it doesn't cost us anything.
Sir?
QUESTION: Thank you. Mark Finley from BP.
Mr. Anderson spoke about the impact of various war scenarios on terrorism. I'd be interested to hear the panel's views on the impact of various war scenarios on political stability of countries in the region.
CHAS. W. FREEMAN: I don't know, Frank, since you were referred to whether you'd like to start on this. I imagine everyone will have something to say.
FRANK ANDERSON: Once again it depends on what's the scenario or what is the range of time and cost to this war. If you have victory without war this enhances stability of all the countries in the region and probably will set the scene for maybe as big an opportunity as post the Gulf War. If it goes into the sort of mid range of six months to a yearlong war I can't think of a regime that is likely to experience regime change threats that will come from it. There will be serious pressures.
Jordan, Saudi Arabia and Turkey, if we go to war, inevitably will support us to some extent and inevitably they will be either concealing or minimizing the visibility of that assistance to their own people and to the extent that it becomes apparent there will be internal resistance and opposition to it. I don't see it as threatening to either one of those three countries, however. Saudi Arabia I don't see it having an impact. Iran is in the throes of a very important political dynamic right now.
If the United States is occupying Iraq the real instability is right there. It is fundamentally an unstable situation between Iran and Iraq and we will have a very complicated situation to manage ourselves. But I don't see it profoundly changing even the dynamic in Iran between moderates, whatever we want to call the two sides, between Khatami and Khomeini. But the context in which that domestic political fight will go on will be significantly changed.
CHAS. W. FREEMAN: Fareed?
FAREED MOHAMEDI: I think firstly we'll have an incredible attempt by the governments of the region -- Saudi Arabia and Iran -- to in a sense contain the shock of an American presence in Iraq.
I do think just like '48 led to '52 and '67 led to a lot of changes in the Middle East I think this will lead to longer term earthquakes, and I think that will come through a longer term change in popular sentiments, which have already taken place.
In the Iran situation I think that given the national security threat right now at the border and their perception it will help the hardliners against the moderates.
In Saudi Arabia to a certain extent the ruling family has already positioned itself and the crown prince is as popular as a recent monarch has been in Saudi Arabia, but I think that there are longer-term issues to be dealt with and that will complicate succession issues and long-term economic and other structural problems.
The other aspect will be how wide the war is, if Israel gets involved, whether it invades Lebanon, whether it wants to take on Syria and so I think that we are entering a period of quite considerable political change in the region.
CHAS. W. FREEMAN: Leon and then Ian.
LEON T. HADAR: Well, I agree. I mean, the point I wanted to make is that usually if you look at the Middle East there is a lag between the crisis and the changes that take place and again I think a good example is the 1947-'8 war. It took a while for all the changes to develop, including the changes in Egypt. So I think you're going to see something like that happening.
If you look at the Gulf War you can make an argument that it's probably not directly linked to an attack on the Trade Center but you had several years in which the hatred and the instability developed and suddenly there was an explosion. So it's not going to take place immediately.
I just want to make another point, and I think one of the problems we have here is that the good news is the bad news. I mean, if the costs of the war will be low, if there's going to be public support for the war, if there's not going to be immediate changes in the Arab world, if the oil prices will remain low, there's probably going to be more support in the United States for doing more in the Middle East, so continuing the occupation, for moving to other places.
So in some respect if the war won't go so well that will probably be a deterrence as far as support in the United States for a war.
CHAS. W. FREEMAN: Ian?
IAN S. LUSTICK: I have a couple things to say about this. One is remember that the cabal is arguing that there will be enormous destabilization and that's a good thing. They're all going to become democratized.
CHAS. W. FREEMAN: And pro-Israeli, of course.
IAN S. LUSTICK: Yeah, of course. It's deceiving to go from country to country and say Saudi Arabia 90 percent, 95 percent no problem, Syria 90 percent, Jordan 90 percent, no problem, no problem. Take ten places and there's a 5 percent possibility of catastrophe in any one. That's a 90 percent chance of catastrophe somewhere.
So it's very difficult to make these kinds of judgments, but one other way to look at it is to look at what I would call the iatragenic character of the problems we face in the Middle East for the United States, iatragenic foreign policy, where our treatments cause most of the problems we get.
So we can go back to '52, Mossadegh, we got rid of Mossadegh, we ended up with the shah, that is we ended up with Khomeini. Khomeini was a problem, we got Saddam to help us with Khomeini. We made Saddam what he is today. We emboldened him. He took Kuwait, brought us the Gulf War. We then went and treated the Gulf War and we got Osama bin Laden along with what we got for treating the Soviet invasion of Afghanistan with an American jihad. So we get al-Qaeda and 9/11.
And then I'm asking, "Professor Lustick, what do you think, are there going to be any bad results to a U.S. invasion and occupation of Iraq for ten years?" Absolutely. "Exactly what are they going to be, Professor Lustick?" I can't tell you that but I can tell you that I think there's a very high likelihood that if the United States invades Iraq there will be an Israeli invasion of Lebanon, so there's one regime that's going to be terribly endangered as a result of the war. I think there's probably an agreement between Sharon and Bush. "I won't bother you in Iraq," says Sharon, "you don't bother me in southern Lebanon."
QUESTION: Wolf Gross, Northrop Grumman International.
My question is primarily for Fareed Mohamedi but for Professor Lustick perhaps would like to chime in. I just returned from the Persian Gulf, was there just before Christmas for quite some time and an increasing tide of concern expressed by people who are otherwise supportive of the U.S., U.S. goals and objectives in the area, increasingly cynically saying that the real goal of the Bush administration and the U.S. government in a war in Iraq would be the seizure and control of Iraq's oil capabilities and that that's really what we're after in the area. I found it troubling, tried to counter the argument, perhaps not very successfully and I wanted to hear Fareed Mohamedi's comments on this.
CHAS. W. FREEMAN: Please go ahead.
FAREED MOHAMEDI: I don't think it's about oil on the front end. It has enormous consequences for oil on the back end as we invade and as we discussed.
I don't think that this administration is after just low-level economic objectives. I think Ian Lustick is right; it's after a grand scheme. It's the big vision thing. It's going for a new world order, et cetera. And I think that why Iraq was partly because of the pro-Israeli-ness of this administration and partly because it's easy, because it's easy to do it against the man with the moustache, not against the man with a bad haircut.
And then, of course, oil comes into it and now there's a lot of discussion on how to structure the oil sector and what to do with that, but these are all later issues that have come into the debate.
I think the real reason for this, and it's hard to explain to many people in the region that it's about a much bigger vision that this administration and certain elements of the administration want.
CHAS. W. FREEMAN: Anyone else want to comment on that?
Okay. Sir?
QUESTION: Mustafa Malik is my name. I'm a journalist here in Washington.
My first question is to Mr. Lustick, Professor Lustick. It's fascinating you said that -- and we are hearing this for the last decade about how Israel will be safe after the Osiraq facility was destroyed.
Suppose Saddam Hussein goes down the tube and this is imposed on the Holy Land. What do you see the outlook, given the fact that the population of West Bank, Gaza and Israel is 39 percent Palestinian today, in 18 years according to Israeli demographics they are going to be a majority? Now will this stick? So that is one.
And for Dr. Hadar, I have a question. Yes, we didn't see anything happen in the Arab world, in Pakistan, in India, Bangladesh they rise up and governments change, that it remains the same. But then we have 70 percent of the Arab population today is below age 30, literacy rate is about 70 percent. Does this change or what do you see if Iraq implodes because of our invasion?
Remember that just on the New Year's Eve 1978 President Carter went to Iran and said island of stability. We didn't see it at that time. So what do you see ahead? Thank you.
CHAS. W. FREEMAN: Thank you and could I ask that when you respond you relate this directly to the issue of the aftermath of war with Iraq, since both questions are related. Please.
IAN S. LUSTICK: If I don't do whatever I'm supposed to do, tell me and I will. (Laughter.)
I don't think that the Israeli rule of the territories is sustainable, whether there's a war in Iraq or not a war in Iraq over the long run, even over the medium run. You mentioned the demographics are actually more dramatic than you said. The figures I would use for Arab population west of the Jordan river is 41 percent, 42 percent and I'd put 50 percent Jewish and the rest non-Jewish, non-Arab, guest workers, Russians, et cetera. So it's really from a demographic point of view unsustainable but that's not even the main reason it's unsustainable.
The fact is that visions, as I indicated before, whether it's the vision of getting rid of Mossadegh and reorganizing the Middle East or getting rid of the Soviets from Afghanistan and gaining a great victory or Israeli visions in '82 of getting rid of Lebanon and replacing it with Bashir Gemayel, the British and French visions of reorganizing the Middle East and Bangorians in 1956, these just don't work out, and I think that it's an ill wind that blows no good, because what you're going to have in Israel is what you've had before, you may be about to have it again, oscillation, extreme right-wing government, an incredible oscillation back and forth.
So if that pattern continues, which it will because a right-wing policy will not produce anything but violence really over the long run, as soon as you get a left-wing government you'll get negotiations.
If the United States has even a halfway rational policy at that time we'll be three months from a settlement based on the Clinton parameters, as soon as real negotiations start. Everyone knows that in the area. That's why there have been no negotiations. That's why Sharon is the first Likud prime minister not to negotiate, because unlike the prior Likud prime ministers, who knew they could negotiate without having to reach a settlement, Sharon knows that if he starts to negotiate he'll be faced with a settlement that most Israelis, that most all Americans, most of the world wants to accept and he'll have to either reject it, accept it, which he won't do, or go to elections based on the idea that he's rejected it.
So the short run is I wouldn't look at a war in Iraq and its aftermath, I wouldn't oppose it because of its affect on the Israeli-Palestinian situation.
Of course, there are risks, people talk about the dangers of mass transfer and so on. I don't put much credence in those. The only context in which something like that could happen, a repeat of '48 is when there's a general conflagration that involves Iraq, Jordan, Israel, Syria and there's also fighting inside the territories. Then all bets are off. But that's not what keeps me up at night right now.
CHAS. W. FREEMAN: Leon?
LEON T. HADAR: First, I also want to add something to what Dr. Lustick said. I think from an Israeli perspective this idea that in the long run Israel will be able to survive in the Middle East as a crusader state of the United States, as an outpost of the U.S., which is really what's developing now -- basically the argument is we are going to serve U.S. interests in the Middle East and in return we don't have to make peace with the Palestinians and we'll be able to have a wider security margin and so on, I think that's in the long run, combined with the other demographic problem that was mentioned, that will be from an Israeli perspective something that I think will harm Israeli interests.
I think what's going to happen probably after the war there is going to be some pressure from the United States. This violence in the West Bank is not sustainable in the long run, and I think what you are going to see after the war probably is Israel will enter into Gaza and turn it into something like Grozny, there is going to be a bloodbath there and then afterwards there will be some pressure and I think there won't be a solution but there is going to be some stalemate along the lines of Cyprus. Israel will withdraw from most of the West Bank and Gaza, you'll have some international forces, Arab, UN, NATO coming in and you won't have a solution I think for a long time, but at least there will be I think some pressure for Israeli withdrawal.
Now, as far as Iraq is concerned, my argument, and this has been my biggest fear of the kaleidoscope and so on is that if you want to plan the Middle East, and this is where I disagree with Dr. Lustick, you do have to make deals with Saddam Hussein, with the Mujaheddin. This is part of the cost involved in being in the Middle East. I mean, it's not a nice place and you have to do those things. I mean, I don't see any substitute for that at least in the short run.
Now, as far as Iraq is concerned, as far as I am concerned, I think the best solution would be to have what I call a user friendly Saddam Hussein, an Iraqi leader who would maintain order in Iraq and stabilize it. I think the minute you are going to have either an invasion or a change of regime in Iraq you are opening a Pandora Box and a lot of things are going to happen. My guess is that in a few years from now in the same way that we are now seeing the law of unintended consequences with the Mujaheddin in Afghanistan people will be talking about the support we gave to the Kurds in Iraq, which are probably going to lead to violence there with the Turks, without the Turks and whatever.
I think that the only solution as I see in the short run to maintain, to make sure that the kaleidoscope will stay stable is to create this protectorate, as I said before, a Kurdish one, a Shiite Muslim one. I don't think it's a good idea; I prefer to see Iraq remain unified, but I think in terms of maintaining stability that will be the only solution. Otherwise you are going to violence and civil war and so on and so forth.
CHAS. W. FREEMAN: This is all so depressing and we need a cheery comment. Sir, would you tell us who you are and give us a cheery comment?
QUESTION: What a challenge. Thank you very much. I'm Conway Zeigler, a strategic analyst with Science Applications International Corporation.
I've been unfortunately trying to make sense out of sort of the strategic options open to the U.S. over the last three or four months and I want to start by complementing Ambassador Freeman for putting together four commentators that give a really refreshing new look, which unfortunately runs a gamut I think perhaps slightly to the side of incredulity from Frank's belief perhaps that we could win this without a war to the user friendly Saddam Hussein, which I think is the most innovative.
But the point is that there has been very little open and frank discussion and I've been amazed at that people I've been talking with in government that are saying, well, I know this is complete garbage but we have to proceed ahead and so forth.
I'd like to add to the fact that this seems to be a nuclear free zone here right now where one can have open comments, to throw a couple more, not quite as good as the user friendly Saddam Hussein but I think there is the real likelihood that I think there probably is going to have to be some military -- and I don't think it's a war but some military intervention or involvement by the U.S. before the Saddam regime goes. But I'd like to suggest that all the thought of timetables, regardless of what the Pentagon all thinks in terms of shipping out the comfort, that the timetable may be vastly different than what people are thinking, and I think the president is starting to kind of maneuver that way because it really makes no sense, as you pointed out so eloquently in the opening, Ambassador Freeman, to launch right into war.
Secondly, and this is a truly heretical idea, which I would like to throw out on the floor because I haven't heard it, is someone made the case, but I think that the Hill also has been in deep denial. The staffers that I've talked to up here have not the foggiest idea as to where it can go and I think you can't really hide behind too much this concept that we've got to know how the war is going to turn out first. Well, of course, you have to do that but you can bound it a little bit.
And I'd like to suggest that there are two documents that haven't come up during this discussion that's really worth looking at. One is William Nordhouse's -- it's only about a 50-page piece that he came out with from Yale. And I've been fascinated at the lack of receptivity here in Washington, because he really does bound it fairly well. And, in fact, he gives good historical evidence going back to the Revolutionary War, looking at all the wars that America has been involved in, how much they thought it was going to cost and how much it might cost. So I'd really commend that to everyone to kind of look into that.
The short answer is for the U.S. what's going to come out of our own pockets, start with 200 billion, not the 80 billion that they're talking about just to move the troops forward, assuming it all goes well. And then if you do things wrong, from Mohamedi's consequence, and you have a huge, big invasion and you have a huge disruption to the oil markets, then you can add half a trillion easily, rapidly and quickly and doing it on top.
And then the other thing that hasn't been really looked at conscientiously, but I think the State Department working groups are doing it, is the cost of reconstructing Iraq. And if you honor their war reparations, the war debts that they have, and you rebuilt the country properly, then again you're talking potentially another half a trillion.
So as you go into this what I would suggest is that you can't afford to have just a coalition of the willing, which is down to I think right now the president and the cabal and maybe a couple people's dogs, but the Brits are trying to sneak out the back door, but you need a much broader coalition of the consulted of the people that may be affected.
So with that, thank you very much for providing the nuclear free zone, Ambassador Freeman. I'd love to hear any comments from these four really lively and well-informed panelists.
CHAS. W. FREEMAN: I'm sure there will be comments, Conway. Thank you. I'd just say the one question we do know the answer to, as I have said before, is who is going to pay. We don't know how much it will cost but you and I are going to pay, not the Japanese, Germans, Saudis, Kuwaitis, Emirates and Qataris.
Frank, do you want to start off?
FRANK ANDERSON: All right. First, if I indicated in my list of scenarios that victory without war would include a regime change, that isn't my view and, no, I don't believe there's a user friendly Saddam Hussein.
Let me shift the conversation a little bit, because I am disturbed or at least concerned about one direction in which it seems to be going and I'll use that to comment on -- and it's one of my favorite comments to make and some of you otherwise may have heard it -- about the nature of this administration's debate on the war. And that reason I'm concerned about the direction is that if you're not involved in the practice of statecraft and you're observing it, it's easy to see rationality that just isn't there.
Professor Lustick on the change, what our intention with Mossadegh led to the unintended consequence of Khomeini. Well, our intention with Mossadegh was to respond to an unanticipated opportunity or challenge and that was that the Iranian generals were getting ready to get rid of him. They were going to mount -- you have to remember -- a counter-coup.
And in terms of unintended consequences I would argue, and we shouldn't take credit for it, that at a time when the real issue was the bipolar struggle and Iran was a significant part of that bipolar struggle, and Mossadegh was tied to only -- his only base of power by the time he was removed was the party, which was not an independent of the Soviet Union enlightened socialist group; it was Stalin's tool. And what we got was two decades, three, almost two and a half decades of Iran on our side in that bipolar struggle.
Now, we ended up with maybe unanticipated costs that were related to it. We were certainly too indulgent of a repressive regime. But I would argue that we got a pretty good deal out of it.
But now let me go back to the real issue here.
CHAS. W. FREEMAN: But you don't dispute Clare Boothe Luce's observation that no good deed goes unpunished.
FRANK ANDERSON: I won't dispute that at all.
But when the questions come, is this about oil or is this about the cabal's vision and where are they going, it never is that simple. This is a town, which is part of a very complex democracy in which no fight ever ends and people are always conducting them, and rather than look at the right as one inside the administration between the visionaries and the pragmatists, my line is this is a fight between workers and wonks. And the workers are that part of the administration who in their previous government experience had jobs. And I'd describe the job as one in which you have a responsibility to achieve an end and you are given a set of resources and authorities to deploy to achieve that end and then you're measured on your accomplishment.
Colin Powel, even Richard Armitage, the Joint Chiefs of Staff and others have always had this experience. The visionaries really come from an experience, which they've never had that. These guys in their education, in their public experience have always been the analysts and the critics and they spent years in the government and outside the government frustratingly pursuing a policy battle. And they came into the government and with 9/11 as an opportunity won the policy battle and now we've had -- how many months are we into -- of their terrible frustration in which they say, well, we won the policy battle but you, the Department of State, can't make the rest of the world line up with this and you, the Department of the Army and Navy and Air Force, can't come up with a plan that will achieve a victory without casualties on either side and maybe you, the Department of Energy, hasn't come up with a repeal for Newton's Law.
This fight is likely to continue. And where did Conway go? Did he get so bored with what I was going to say he left?
The reason I put victory without war not only is the most attractive option, I think the most likely is that the fight is just never going to end and the likelihood that at some time 15 February is apparently from everything I read and see sort of an ideal window to start the war, the likelihood that the fight between the workers and the wonks will be won by 15 February is I would say it's subject to significant question.
CHAS. W. FREEMAN: Thank you. I think actually you're reminding us in a way, others will comment, of an incredible difference between this putative war, which hasn't begun yet really, and, for example, the Vietnam War. It was the Washington establishment that marched fairly united into the Vietnam War with strong pressure from Congress to do that and very little dissent in Washington. The dissent was mostly outside Washington.
This is different. The dissent seems to be largely among the sort of permanent government establishment and the wonks, as you put it, are the ones who are pressing the case or cabal, as Ian put it. And, Ian, your comment now.
IAN S. LUSTICK: Well, I think you're giving a bad name to the word wonk. (Laughter.) I do agree with the way you are lining up the workers, including the vast majority of analysts in every single part of the government that has anything to do with this are just at their wit's end because of the inability of rationality and evidence to make even a dent in policy consideration, and I think that's consistent with what you're arguing.
But I would like to answer just quickly, there was a question about Israel and you heard that Israelis really don't want this war. Well, Israelis are no better than anybody else at knowing what they actually want. It all depends what you ask them, exactly how you ask them, when you ask them and if they're forced to answer and in what terms. So I don't go by this or that poll.
I will tell you that surprisingly to me I have found very little press discussion that is opposed to the war, very little in Israel. I think that this is very emotional, again just as Americans have a kind of visceral need or instinctual orientation towards wreaking havoc somewhere else because of the way they feel, this is something that Israelis are feeling. Also and especially they can feel a part of something by being lined up with the United States and this is very reassuring.
So you don't find -- Leon, I know what he thinks about that -- I don't see much of vociferous opposition or critique of the war except on the extreme left where I can quote a remarkable comment by very extreme folk, a woman, Roni Ben-Efrat, who wrote an article in which she said that, "We know what happens when you sew; you reap the whirlwind. But what happens when you sew the whirlwind?"
But I would like to put on my political science hat for a moment and take off the wonk hat and address the unintended consequence issue, because what Frank has said about the way government works in Washington is absolutely correct, nothing ever ends, everybody's always out to get as much as they can at all times, knowing that they're going to be countered by folks on the other side with other agendas. If they don't fight bitterly for their interests, they're not going to even get a piece of what they deserve. That's the way Madison and company set the country up, so that it wouldn't make large errors of one particular kind, it wouldn't make mistakes that would be very much more costly because it wouldn't be able to do very much, it would always be paralyzed. It would make the mistake of not doing things, which ought to have been done but it wouldn't make the mistake of doing things, which shouldn't have been done.
So we get gridlock constantly, thanks to our founding fathers and it's been actually great for us because we're so rich that we can afford not to be efficient in the way we use our resources.
But it doesn't work in foreign policy. What happens is that the system produces presidents and foreign policy leaders who came out of the kind of politics that Frank was describing, not only inside of the State Department, the CIA and the Pentagon but in Tammany Hall and in every state legislature in the country and they come out prepared to slit the other guy's throat for a mess of potage and expect that the other guy is going to do the same thing and everything will kind of be kept in order by that competition. When you get in the White House and you project power overseas there's nobody who can fight back for ten or 15 years. You have sleeper effects all over the place.
So the same rational kinds of behaviors tend to become irrational overseas, tend to bite back much harder but longer time down the road. That was Vietnam, that was all the cases I've been talking about in the Middle East and that will be the war in the occupation in Iraq.
CHAS. W. FREEMAN: Leon, briefly, because we have a young lady who's been very patient waiting.
LEON T. HADAR: Well, I would say a note of optimism. I mean, if you read the Woodward book on the war in Afghanistan, this administration, I must say like most administrations, is muddling through under pressure from different groups. You have to recall that before 9/11 this administration was actually planning to put pressure on Israel and do something about the Palestinian-Israeli conflict. There were plans actually in the same week in which 9/11 took place. There is a lot of pressure in this administration and I really think that it really depends on the political pressures at home, the changes abroad.
I'll give you one example. The war in Lebanon, for example, as you'll recall, under Reagan the U.S. troops were sent to Lebanon. There was a lot of expectation for change and so on. And, of course, after the terrorism attack and so on, they cut their losses, they fired Alexander Haig and there was immediately a change in U.S. policy. I think something like that can happen under this administration.
QUESTION: My name is Katherine Browick. I'm an energy consultant here in Washington with a shall-remain-nameless multilateral.
My thanks is that you gave u s a longer term vision and that's what's been lacking in most of the analysis that I've seen is that we're not thinking of the five, 10, 15, 20 year scenarios.
Along those lines I want to come back to a comment that Fareed Mohamedi made at the end when he said we might have a democratic regime change in Iraq, which could make for revenue distribution.
Can we explore that a little more? What would revenue distribution in Iraq look like? How exactly would it happen? What sort of precedent do we have in the Middle East for revenue distribution with any degree of success and what are the implications both for U.S. foreign policy with Iraqi revenue distribution and implications for world oil markets?
CHAS. W. FREEMAN: Fareed? A very good question.
FAREED MOHAMEDI: I wanted to throw this issue out, because I think there has been very little discussion on this, because there has been a lot of discussion on the future of Iraq and the future government and this and that. I mean, oil in many ways, especially in the Gulf, has created the current authoritarian regime. It has given them an ability to get an external income and with that they've bought popular support and they've bought external protection. Saddam would not have been sustainable for five days if he didn't have the oil wealth, and especially with rising oil prices in the '70s, which he then used for two enormous wars.
So that issue, before you talk about the state, a future state, you have to talk about the oil sector and how you either sterilize its revenues or distribute them to empower the people, and then create an administration that then goes out and taxes and is beholden to the people. Or if you go back to the current system you just create another dictator. I'm a bit, as I said, deterministic on that level. And so I was just throwing that out.
Now, the World Bank, for example, in Chad has come up with a mechanism where some funds are put into development accounts, where they're used for developing the country and not like in Angola where the leaders have just stolen the money and five of them get the revenue, which is a typical pattern of oil-producing countries.
So I think that I just wanted to throw out this as a discussion point.
CHAS. W. FREEMAN: I think it's actually a very vital issue, because if the state is independent of taxation, if it doesn't depend on its citizens for support, then by definition it's able to act in very different ways than if it relies on taxation. No taxation without representation is a familiar principle in North America. No representation without taxation is a familiar principle in the Middle East. And I think the answer to the question really in the Middle East has been traditionally patronage from whomever is in charge, otherwise known as corruption, and you all know that no one complains about corruption unless they're not getting their piece of it.
Sir?
QUESTION: I'm Kate Turner from the office of Congressman Tom Allen.
I'd like to bring up the issue of I've heard that out of Baghdad there has been a call to the Arab world to look at what's happening in North Korea and there's a very logical argument for nuclear armament in light of our policy towards North Korea and our policy towards Iraq. Of course, it can't be simplified quite that easily, but given that understanding I'd like to hear you comment on how the administration and other decision-makers are considering the response of al-Qaeda and of a looser terrorist network to the difference in our policy towards North Korea and Iraq, what might be the response in the Arab world among international terrorist networks and is the U.S. considering that in our policy decisions in Iraq?
CHAS. W. FREEMAN: Who would like to take that question? Ian, why don't you?
IAN S. LUSTICK: I would like to, but I'm not exactly sure I understand part of it. I understand the question of what are the implications of North Korean events for the U.S. position in Iraq and so on and for the Iraqi appeal to the Arabs to look at the double standard, but I don't understand the connection to al Qaeda.
QUESTION: That there is a perception that the U.S. is -- well, there could be an excuse or a justification among extremists or terrorist groups that this is evidence of -- there is sort of a populist -- well, there's an appeal to the Arab world to rise up and say this is a war against Islam.
IAN S. LUSTICK: Okay, well that's a more general question. Let me say two things about it. One is the North Korea situation has, in my view, created an enormous problem for the administration. I mean, they must be tearing their hair out in private, really. I mean, I don't know, tearing their hair out of every conceivable place on their body. This is really bad. What this fellow in North Korea is doing is showing that there's one way to definitely get off the axis of evil list and that's get nuclear weapons. And that has a tremendous message for Iran.
And from my point of view what American policy toward North Korea is doing, and we set it up because of this axis of evil argument and launching the war against the weak link, is we're creating a tremendous incentive in Iran, especially if you imagine hundreds of thousands of U.S. troops on their border, to rush toward a deliverable nuclear capacity. There's just no question that we treat anybody who can kill tens of thousands of people in a very short time as civilized enough to talk to, but if they can't definitely do that then we're going to attack them. So that's a tremendous propaganda opportunity for Saddam.
Now, in terms of the general appeal, al-Qaeda and the like, they're our enemies. They're spread around the world and we have to deal with them as a real chronic terrorist threat but not one that is likely to be integrally linked to a state because we showed in Afghanistan we can break states. If we can find them, that they are actually connected, we'll break that state. So I don't think that that's the problem.
However, what Saddam can do, and I think we haven't exactly said this but we should, and that is that there's one situation, which Saddam will definitely use his weapons of mass destruction or disperse them to people we don't want to have them, and that's when he believes he's being attacked for real, when his regime, his own personal survival is at stake. That is, you can say he's not deterrable but, in fact, you act and we have acted as if he is deterrable. We told him, Jim Baker told him, "Don't you do certain things with your weapons of mass destruction or we will incinerate you," and he listened. He hit Israel with scuds and there was nothing on the scuds. Now, he's definitely deterrable but nobody is deterrable if you're about to kill them. That's part of the theory of deterrence. And that's what Saddam is doing when he's telling the rest of the Arab world this is a fight for your survival.
CHAS. W. FREEMAN: Leon.
LEON T. HADAR: I think that the axis of evil strategy and the nuclear component I think in the long run all of this is going to collapse. There are other comparisons between that and the containment policy or the development or the containment policy in the 1940s. But you have to remember that when George Cannon wrote his famous piece about containment the Soviet Union still didn't have nuclear weapons and nuclear strategy developed afterwards a start of the political strategy. This administration seems to be putting the cart before the horse, developing a nuclear strategy before they tell us exactly what is the political strategy.
So it doesn't make a lot of sense why Pakistan, for example, has nuclear weapons, it doesn't make sense why Israel has nuclear weapons and also you have to ask yourself what would happen if you let in an Iraqi nationalist government. You have to remember that the development of Iran's nuclear military power started under the shah because it was in the Iranian national interest. I would argue that any Iraqi government that is committed to its national interests, unless the United States provide it with a nuclear umbrella, will move toward the development of nuclear weapons because it's in their national interest. It has nothing to do with Islamic fundamentalism as such. So we have a problem here and I'm not sure that the administration policy as they have stated now responds to that.
CHAS. W. FREEMAN: Frank, go ahead.
FRANK ANDERSON: Let me just get into this in one sense, because the coincidence of problems with North Korea and Iraq they're a particular embarrassment I think to this administration and I think even before it happened I'd suspect that whoever wrote the axis of evil, wherever he sits in the White House, every time the president goes by him he whacks him. (Laughter.)
CHAS. W. FREEMAN: He's actually left.
FRANK ANDERSON: It's unfortunate. And, in fact, it isn't nuclear. The difference that North Korea has is not that it has a nuclear deterrent, that it has, I don't know if it's 15 to 20,000 artillery tubes within range of Seoul and I don't know the numbers anymore but somewhere between 3 and 500,000 infantry within range of 30-some-thousand American troops who at best would become prisoners in the early hours of a war between North and South Korea or between us and North Korea, which greatly complicates our ability to deal with the nuclear threat in Korea the way we could deal with it in Iraq if it existed or in Iran if it existed, and that's just take it out.
CHAS. W. FREEMAN: Those are very good points, I think very good points.
Sir, you've been waiting patiently.
QUESTION: I'm Quincy Lomiston. I'm a retired Foreign Service Officer.
I have two questions. I'll start with the one that's more fun, the more romantic and historical one. Professor Lustick took us back to Roman times and the evacuation of Mesopotamia. I'll phrase this one by going back further to Homeric times when Agamemnon positioned an army for an invasion and once he got it there something had to happen. I think he sacrificed his daughter as I remember. But we have now continuing underway a massive military deployment. We're reaching 100,000 people both prepositioned and notified to go. Once they get there and we get them prepositioned up front and suddenly we come to our collective senses here and decide maybe we don't really want to do this, we're out there, we're positioned, things are going to start happening. Will we, given the opportunity that the wonks, cabal or others will have, once you start to push critical mass of men and material way up front, is it going to be that easy to stop a momentum that in spite of what we may think at the time may overtake us? That's my first question. I'll wait to ask the second one, if you like.
CHAS. W. FREEMAN: Go ahead and ask the second.
QUESTION: Well, the second one is much more mundane for Mr. Mohamedi. I was interested in how much unutilized but installed oil production capacity there exists now outside of the Gulf. You mentioned Nigeria, Algeria and others as developing these capacities. It has usually been my understanding that it is the Saudi's capacity with unutilized but installed production capacity to see ultimately whether the markets really get riled or not. In the first Gulf War once it became apparent that Saudi Arabia's industry was not going to be destroyed by the Iraqis, the prices went way back down again and the IEAs stock release really didn't amount to much of anything. It didn't have to. There was communication between the producers and the consumers.
Basically, is there enough capacity outside of the Gulf, should something go wrong, to really make that difference? I don't know.
FAREED MOHAMEDI: Quick answer, no.
CHAS. W. FREEMAN: Fareed, why don't you go ahead.
FAREED MOHAMEDI: No. (Laughter.)
QUESTION: That's exactly what I thought.
FAREED MOHAMEDI: Half a million barrels if at all. It's all in the Gulf.
QUESTION: So if the Saudi industry survives, the market -- well, ultimately prices may be higher, lower or anything but it's just going to churn on it its own inexorable fashion.
CHAS. W. FREEMAN: Thank you, Quincy.
And now, Ian, would you like to address the question of momentum from deployment?
IAN S. LUSTICK: Well, your first question is Tonkin Gulf incidents, you know, aren't they going to be really easy to generate. Yeah, they are. And remember what President Kennedy is warning when the quarantine was imposed, it's very easy once you get forward deployments like that to get dragged into something by a small incident. Mostly those incidents are not by accident. They are provocations as occur or they're studied exploitations of technical violations as occurred in '48 in Negev or in Lebanon before the '82 invasion.
So that's what I'm certainly concerned about and I think it's the reason why we have to, all things being equal, expect a war because of the size of the build-up. But I still don't think it's inevitable and I think one of the crucial issues, as I've stated at the beginning, is how vociferous, clear and compelling are the arguments against the war now and can the narrative that CNN and FOX are pushing, showdown with Iraq, tune in again in 15 minutes for the next installment, this narrative, which the American people they're trying to train the public to accept as the actual story needs to be interrupted by compelling critiques that reach not only the editorial pages of the main newspapers but reach into the talk shows throughout the country. And I don't know how to do that exactly but that's got to be done so that the decision can be made to pull back when it is an embarrassment to those in power but not to the United States of America.
It was fascinating to see Krauthammer in the Washington Post today resorting to an argument that it took the hawks in Vietnam a decade to make, which, okay, maybe we shouldn't be here but we've committed ourselves enough, we have to fight.
That's a sign of weakness that they're already making an argument. It's a sign of vulnerability.
CHAS. W. FREEMAN: Arguments about credibility and the requirement to establish credibility by doing stupid things are the last refuge of political scoundrels.
Sir?
QUESTION: My name is Allet Beumi (?) and I'm with CAIR, Council on American-Islam Relations, which chairs the civil rights organization here in Washington, DC.
My question is about the opposition movement here in the American society to those in Iraq. I was looking for an evaluation for this movement, how much did it achieve and how much is it able to achieve in the next few months and do we see a role for the Congress to play in this movement, who are the main players and can it really shape the current debate about the policy towards Iraq? Thank you.
CHAS. W. FREEMAN: Again, Ian, this is really in your area.
IAN S. LUSTICK: Oh, looking at the Democrats in the last election it just seems hopeless, it seems odd. The polls show that you can manipulate questions with framing to get extremely high levels of doubt, skepticism, even opposition. That suggests political opportunities. But I don't see it happening in the Congress, but the one place you ought to expect to see it is on the campaign trail among some presidential candidates who otherwise don't think they're going to make their mark and they have an opportunity to be the hero and to be brought into the fore.
So one of the things I'm going to be doing is going around to these presidential candidates and say are you willing to be a profile in courage or not. And that's the one thing that I'm thinking about.
I think in general there is a lot of grassroots unrest and fear that hasn't been organized and there were some under-reported demonstrations. I think that will happen again. On my own campus there's quite a bit. We had one meeting on this. I didn't organize it but I spoke at it, and there were 500 people; 200 of them couldn't even get in the room.
So there is the potential for not only immediate but certainly a sustained antiwar movement in the country, but we're not seeing it develop as quickly as I'd like to or that I would expect to.
CHAS. W. FREEMAN: I think this is at present still an abstract and hypothetical question. Nobody is getting killed on our side.
IAN S. LUSTICK: And there's no draft.
CHAS. W. FREEMAN: There's no draft. It doesn't touch our lives as Americans at the grassroots. When it does in whatever manner it does then we will have a very different situation. And it's clear that there is an implicit latent explosion of opposition out there in the country to be experienced later.
Leon.
LEON T. HADAR: Well, I think under a scenario in which we'll have a prolonged war and casualties and so on I think you are going to see a very interesting development in the Democratic Party, because I think in the Democratic Party if you look at the political base, blacks, Hispanics and so on, I think there's a lot of opposition towards this war. I mean, even if you look at some of the public opinion polls and so on.
At the same time, I think there will be tensions between those circles or groups and a lot of the Jewish contributors and supporters of the party who are, although you can talk about the Jewish community as monolithic on that, but certainly in terms of the political bigwigs and so on who support Israel would be continuing to support this war.
So I think you are going to see a lot of tension there. It will be interesting to see how people like John Kerrey and others will find themselves in the middle in this tension, what are they going to do and what decision they will make during the campaign.
QUESTION: My name is Laura Merringoth. I'm an undergraduate at the College of William and Mary.
And actually my question addresses attention to what was just brought up and between the U.S. and Israel. And my understanding of the news coming out of Israel is that they're pretty much expecting this war and they're preparing for some sort of attack from it and how you see what compromises emerging between President Bush and Prime Minister Sharon between U.S. support of Israel in case of an attack, which would be brought on because of the U.S. attacking Iraq, U.S. aid to Israel and what possible compromises you see between the Israelis and Palestinians because of this war?
CHAS. W. FREEMAN: Ian?
IAN S. LUSTICK: I did refer to this briefly before. I think the key thing that's been happening between Sharon and Bush is there was an oscillation in the American administration over is the Palestine problem important, should we talk about a Palestinian state, should we forget about it, back and forth, every two months, depending on very specific incidents that occurred or did not occur.
And what Sharon did is he struck a deal with Bush, the basis of which is "I will, in fact, behave myself within certain limits and I will not surprise you badly. And I know your advisors have been warning you that I tend to do that, but I'm not going to do it, but in return you're going to allow me to play pretty rough and you're not going to put pressure on me to actually carry out the blueprint plan or to do things that are going to get me toward negotiations."
Now, that extends into the war, which Sharon definitely wants. Remember, it was Sharon who had a vision for reorganizing the Middle East and based in which the Lebanon war was the first step, but that was part of a grand scheme he had that portrayed Israel as a great power reaching a thousand mile radius around it. The Pollard Affair was part of that vision, by the way.
So the deal has extended in the way I suggested I think that Sharon sees the southern Lebanon situation, where Hezbollah really has built up an enormous base and it's so big that I wouldn't say it's as big as the North Koreans have vis-à-vis Seoul but they can hit Haifa, they can do serious damage and in order to get rid of that threat I think Sharon sees the need for a pretty full-scale invasion of southern Lebanon.
And I think that the most probable deal is that the United States will get from Israel almost a commitment not to come into an Iraqi war, the United States promises that it will first and foremost go into the Western desert and make sure there are no scuds there as much as it can, and in the final analysis may under certain circumstances provide Israel with the kind of tactical information it needs to carry out strikes. But the basic thing is Israel will stay out there and the United States will stay out of southern Lebanon when Sharon goes in.
And then we just don't know -- remember, this is not an uncommon scenario. Israel and Britain and France attacked Egypt earlier than they intended in '56 because that's when the Russians attacked Hungary, so it was a cover. This is the kind of thing that happens in the Middle East and I do expect it.
I don't think that the war has a particular implication for the character of the compromise that will occur as the basis of the settlement between Israel and the Palestinians. That's more or less determined by facts on the ground and a tremendous history of negotiations, and the contours of that settlement ultimately will be the Clinton parameters.
I don't agree that Gaza is likely to be turned into Grozny. Maybe that's wishful thinking, but I don't think that. I do think that a settlement is possible. It will be based in part by the threat of unilateral separation, but it must occur after a new Israeli government.
It's the oscillation inside of Israel between more or less extreme left and extreme right-wing governments that gives this whole relationship between the Israelis and the Palestinians the distinctive character that it's had for 25 years.
And what has happened in general are two things, and I'll stop here, is the entire Israeli political spectrum has lurched to the left in what it's willing to accept. I don't mean that their hatred for Arabs has decreased but what they're willing to accept is a political settlement and it has lurched to the left. You can see that in the National Religious Party and the Likud, in the Labor Party, in Merit, all the way across.
The other thing that's happened is the United States has moved, not lurched but moved so that even a pro-Israel fantasy, Disneyland, Israel administration like this one still talks about the absolute necessity for a Palestinian state. Remember, it's amazing, the leadership of the Likud won because he supported a Palestinian state and his opponent said absolutely not.
So we know what the settlement is going to look like. It's not going to be affected by the war. The timing might be affected.
CHAS. W. FREEMAN: Leon, and then we have time for one more brief question.
LEON T. HADAR: I think as far as Israeli reaction there are three scenarios and I'll give probabilities.
I think the first one is I think the Sharon government would at least take advantage of the fact that Christiane Amanpour is in Baghdad and cannot go to Gaza to attack the Islamic radical infrastructure in Gaza. And whether that will lead to Grozny or not, I'm just saying that it's going to be a bloodbath, it's going to be many more casualties than expected and it's going to be very tough. I think if there's going to be a war the probability for that is quite high, I would say 80 percent.
The second thing that might happen, I don't think there's going to be an invasion of southern Lebanon. There's no support for that in Israel and that's not going to take place. I think there's going to be an attempt to attack specifically the Hezbollah sources in southern Lebanon and to humiliate Syria. I think that will be part of the strategy of Sharon. I would give that about 60 percent probability.
The last thing, which I give about 40 percent probability, is an attack on not Iraqi but Iranian nuclear installations by Israel, which can take place I think during a war. I mean, not a lot of people are talking about that but that's a possibility.
Now, as far as the settlement after that I think there's going to be some pressure for a settlement because of pressure of settling the Arab world under any scenario. I don't think you are going to see a final settlement along the Clinton proposal. I don't think that's viable at this point. I think you are going to see some interim solution, as I said earlier, which will look like Cyprus with all the Israeli troops and eventually there's going to be I think the long-term solution would look very much like the Clinton plan but not the short-term solution.
CHAS. W. FREEMAN: Sir, you have the last question or comment.
QUESTION: My name is Harrison Taylor Godfrey. I'm also a William and Mary undergraduate. We like to come in large numbers.
And my question addresses interethnic conflict, supposing that there is a benign war or a midterm war in the Middle East and in Iraq specifically, and that is that so we have the removal of Saddam Hussein; what happens then. Do we have Shiite reprisals? Do we have an interethnic council that forms, democratic government? And what's the possibility of its viability, given that there has been so much repression and that the Baath Party really does represent a Sunni minority in the region rather than the Shiite majority? And interrelated to that, what occurs with Iran's political power in the region, given that it's the sole Shiite nation in the region and 70 percent of Iraq is Shiite?
CHAS. W. FREEMAN: I think this question was actually alluded to earlier in some remarks that Leon made and in terms of talking about the structure of postwar Iraqi order you raise a very, very difficult and timely set of issues.
Leon, would you like to start with a response and then perhaps, Ian, I think you have some views on this, too and Frank perhaps as well.
FRANK ANDERSON: I'll go third.
CHAS. W. FREEMAN: I think we'll let all four panelists have the final say at this point. Please.
LEON T. HADAR: Well, I think that under any scenario, including what I call the user friendly Saddam Hussein, which I really meant a military coup that might take place under certain circumstances, I think that's a realistic option that we can envision that.
In any case, the pressure that developed in Iraq in recent years with the Kurds, with the Shiite is going to explode in some way or another. At the minimum you left some Attila type of massacres and the U.S. is going to pay a price for that because it's going to be there and people are going to accuse the United States of being there and why didn't you do something about it and so on and so forth.
So something is going to happen as a result, but I think one of the things that wasn't mentioned it would be very interesting to know what is going to happen with the oil resources that are under Kurdish control. I mean, if you look at a world, immediately see how the Kurdish, Turkish and American troops, I think the first attempt will be to take control of the Kirkuk oil fields and I think that's going to be a major issue I think in the world. But this is going to be a major problem in this war.
IAN S. LUSTICK: Two historical analogies, because I don't know enough about Iraq to make predictions, even if I thought those kinds of predictions, tactical as they are, were even theoretically possible.
But the United States liberated France, really re-liberated France. People were putting roses in our rifles. This is not going to be the way we come into Baghdad. Twelve thousand Frenchmen were killed as collaborators while we were there, right away.
So the idea that there's going to be no bloodbath or not attempt at a very significant bloodbath against the Tikritis and the Sunnis who have been wreaking this kind of pain on the rest of the population by the Kurds, by the Shia is beyond my imagination.
Take it one step further, what we're really doing is we're doing an Israeli Lebanon in Iraq. We went in there, bang and we finish it. That was the idea, we finish this problem once and for all. And we have our grand ideas about the regime we're going to set up. Oh, it doesn't work. You go in there militarily it works but then you got all constraints by international actors and your guy gets assassinated, so what are you left with. You're left with being in the middle of interethnic conflict between the Shia and the Druze and the Muslims and the Shia and the Sunnis.
FRANK ANDERSON: I'm not certain what I could add. Well, let me try to add to that in general agreement but from an old practitioner's point of view. There are a bunch of very practical problems that will arise. The difference between what we were able to do in Germany or Japan, for example, and what we might be able to do in Iraq to go to the interethnic conflict, you could take a Hessian, a Saxon, a Bavarian and an Alsatian picked at random in 1945 and bring them into an office and put them to work on the administration of the new Germany and they would all work -- well, they'd work according to orders but more than that they would begin from a basis of German interests. They would work as Germans.
It is not true that there is no Iraqi nationalism, but in a new situation where it's all broken open and there are opportunities and threats if you were to take randomly selected southern Shia, Arab Sunni, Kurds, Turkemans, they will default to that ethnic position that they'll try to defend.
And in terms of neighbors, Turkey does have a serious interest and a growing problem with Turkemans. I don't even know the truth. And interestingly, from the agency I don't think we ever knew it or the U.S. government doesn't really know the truth of how many Turkemans live in Kirkuk. The official numbers are not to be trusted because the Iraqis since the establishment of the state have had an interest in diminishing that number and the Turkeman argument that they're really the majority is equally suspect because they've got an interest in becoming that when somebody starts dividing the spoils. It's going to be a much more complex problem to address.
And we have far fewer resources. When we went into Japan, we went into Germany we started in 1941 and early '42 stripping off from all the draftees that showed up at the centers when they were inducted German and Japanese speakers and we sent them off to camps and they spent the war preparing to occupy Japan and Germany so that when we won that war there was a postmaster for Essen, he'd been picked and trained. I don't think we've got the postmaster here.
CHAS. W. FREEMAN: Fareed?
FAREED MOHAMEDI: I'd like to approach this from the economic angle to this in terms of competition and reprisal. I mean, this regime in many ways is set up both on terror and patronage. And you can see one of the elements, for example, after the Gulf War he elevated the status of tribes. This, in fact, Saddam had tried to destroy the tribes prior to the '80s. Now, in elevating them he moved land between so there are winners of land and losers of land. So he expelled a large number of Shia during the Iran-Iraq war and many of them are in Iran.
There will be security forces who have extorted money and who are waiting to be revenged against. And so I think that you will have a lot of this in the first instance taking place and people trying to claim back their assets to a certain extent.
Then I think it really depends on the central authority and the ability of basic supplies to get to population centers. And if that falters then there will be a competition for those basic foodstuffs, et cetera.
And then ultimately, depending again on the central authority, you could get external incursions from Iran and other places.
And then finally on the Kurdish issue with Kirkuk I think there is a great fear by the Turks that they will come in and take over the oilfields and that the Turks have demanded from the United States that there will be early moves to try to forestall that.
Lastly, on the issue of torching the oilfields, whether Saddam will torch the oilfields, in general we at PFC have thought a lot about this and generally come to the conclusion that even if he has intentions that they will not be carried out by his troops who may think that, hey, it's one thing to torch Kuwait as we leave, it's theirs, but this is our national patrimony and we may survive so we may need this.
CHAS. W. FREEMAN: I'd like to thank everyone here, both the panelists and those of you who honored us with your presence in the audience for what has been a very stimulating but somewhat depressing discussion.
I'd like to bring it to a close by reiterating a point that several of the speakers made earlier, and that is there is no doubt whatsoever about the enormous capacity of the U.S. armed forces and their ability to prevail in any battle in Iraq. And there is no doubt therefore that our armed forces can go in any direction to any location we wish in Iraq, except for one, which is out. Once we're in we don't come out.
And the biggest problem with this is, as has been alluded to in the final words of this discussion, that at present things that are happening in and around Iraq are someone else's problem and someone else's fault but when the United States is there we are accountable for what happens, and what happens in Iraq in the early days after the war is very hard to foresee.
Thank you all very much.
(Applause and end.)