Implications of the War in Iraq

Publication date
Monday, 21.04.2003

Augusto Lopez-Claros



My work takes me to Washington with some regularity. It is always nice to have a work-related excuse to visit one's former "home-town", to see old friends and to have engaging discussions with interesting people on the burning issues of the day. A visit in April of 2002 has remained in my active memory file. I had been invited to make a presentation in a meeting at the U.S. Congress organized by several congressmen active in fostering improved U.S.-Russia relations. Presidents Bush and Putin were scheduled to meet the following month in Moscow and this panel discussion was supposed to come forward with some recommendations for the Bush/Putin Summit. Mr Khodorkovsky, the chairman of Yukos was there, making a case for stronger partnerships between Russian and American oil companies and, more generally, between the U.S. administration and the Russian government. I paid a visit to the U.S. State Department to talk with a senior official and friend, one of the best strategic thinkers in the U.S. administration in my view. The visit was most revealing and its contents are worth reviewing and commenting on in light of the international events which have unfolded in recent months, weeks and days.

The main challenge facing the governments in the Arab world is how to gracefully exit fr om an economic and political system which is no longer sustainable. The entire region is ruled by governments which lack political legitimacy in the eyes of their increasingly restive populations. Authoritarian regimes which do not feel the need to periodically go back to the people to obtain legitimacy for their policies and actions-which is the essence of democracy-have proven to be unresponsive to the needs of the masses. They have mismanaged their economies and are facing demographic pressures which are likely to lead to enormous social stresses in coming years. The highest rates of population growth in the world, deeply sclerotic economies largely controlled by the state, and, with few exceptions, an undue dependence on oil, have turned the entire region into no more than a gas station for the global economy. Even in some of the "liberal" Gulf countries young people have a deep sense of frustration at the lack of employment opportunities and the paralysis that comes fr om overly centralized regimes wh ere no major decision can be made without the endorsement of the head of state, more often than not an elderly ruler in poor health, disconnected from the everyday concerns of his subjects. Saudi Arabia, a country with a per capita income at Western European levels a couple of decades ago, has now sunk to levels of income well below many countries in the developing world, an eloquent testament to several decades of misrule.

These regimes essentially face two choices in coming years. One is to gradually introduce economic and political reforms which will allow their oppressed populations to participate actively in the building of the institutions of modern democratic states based on the rule of law and respect for civil and human rights-yes, allowing women to vote, a right recognized by the Universal Declaration of Human Rights but ignored by most of these countries who think that having women be second class citizens is a legitimate "cultural exception." The other will be to resort to increasingly harsher forms of repression and/or bribery, with oil revenues continuing to subsidize an extensive social safety net which gives people food and shelter but not a sense of ownership and participation in the building of the nation. From the perspective of the U.S. administration there is nothing wrong with the first scenario which essentially envisages a smooth and peaceful modernization of now dysfunctional political regimes. The problem rather arises with the latter one which could turn extremely violent and have spill-over effects on the world at large. The potential for trouble beyond the confines of the Middle East is made clear by the fact that 15 out of the 19 hijackers responsible for September 11 were Saudi nationals, angry young men unable to channel their energies into creative purposes-such as making the Saudi economy a little more than an oil pumping station-quite willing to wreak destruction on themselves and on innocent civilians.

Furthermore, because of globalization and the increasing tempo of social change everywhere, countries such as the United States can no longer be indifferent bystanders. The days when governments could conveniently turn a blind eye to the despotic actions of repressive regimes are over. Many of these regimes may be rabidly anti-Western, may have the resources to gain access to the latest technologies and weapons, thus posing a threat to the security of the whole world. Now, the above would suggest the need to strengthen the mechanisms of international cooperation. Indeed, one of the more credible criticisms emanating from the "enlightened" anti-globalization camp goes as follows: The process of globalization is unfolding in the absence of equivalent progress in the creation of an international institutional structure that can support it and enhance its potential for good. There is no global environmental authority; policy in this area is being done via ad-hoc approaches involving elements of international cooperation, voluntary compliance, and large doses of hope. In the absence of a body with jurisdiction over the global environment and the associated legal enforcement authority, de facto, the international community has abdicated management of the world's environment to chance and the actions of a few well-meaning states. The global economy has no lender of last resort-there is no reliable, depoliticised mechanism to deal with financial crises. Whether a country gets an IMF bailout or not in the middle of a financial meltdown is a function not of a transparent set of internationally agreed rules, but rather several other factors, including whether the IMF's largest shareholders consider the country to be a strategic ally worth supporting. There is no agency charged with the responsibility for giving legal meaning to the noble principles enshrined in the Universal Declaration of Human Rights. According to the US State Department, there are 44 nations with the capacity to build nuclear weapons-nuclear proliferation remains yet another example of global institutional failure.

Sounds wonderful? The problem is that, as presently configured, our international system is deeply flawed. The Security Council is neither representative nor democratic. It is not representative because, during the discussions leading to the (now famous) second resolution on Iraq, it did not matter what the views were of Indians and Brazilians, accounting for a quarter of the world's population, but it did matter very much what were the views of Guinea, a very small African nation barely able to feed its population. So, the will of the international community at any given moment in time is represented by its 5 permanent members and the views of 10 others, randomly selected from the entire membership. Hardly a model of representative democracy. And it is not democratic because a relatively middling nation like France (with 1/20th of the population of India and accounting for less than 4% of world GNP) can, through the power of the veto, derail the taking of decisions with potentially vital repercussions for global security.

The war in Iraq is likely to have many implications; the demise of a ruthless dictator is not likely to be the most important one. First, it will bring into focus the real intentions of the United States. Michael Kelly, the most distinguished fatality among the many journalists who have lost their lives in Iraq in the last 3 weeks, put it very well in one of his last dispatches when he said that the most important question at the moment concerns whether the use of the United States unfathomable military power "will be largely for good, leading to the liberation of a tyrannized people and the spread of freedom, or largely for bad, leading to imperialism and colonialism, with a consequent corruption of America's own values and freedoms. This question is real enough and more: probably the next hundred years hinges on the answer."

Second, it will lead to either reform at the United Nations or its increasing marginalization from global affairs. It has already shown that the veto in the Security Council is now worth very little. France and Russia may get together in St. Peterburg (Germany does not count; a more populous country with a larger economy than that of France it does not have, regrettably, the same importance at the UN, itself a silly historical fact) to talk about the future role of the UN in the reconstruction of Iraq, but their debate takes place on the sidelines. Their leaders may loudly proclaim that only the UN can decide how this reconstruction phase should unfold (that is: we will veto whatever we do not like) but the Americans are unlikely to be paying much attention. Ironically, France and Russia would be better off moving to a system in which there was no veto for anyone in the Security Council. That way the United States would no longer have an excuse to bypass it. This is the way that the Governing Boards of the World Bank and the International Monetary Fund are organized. Each country has a vote, with its weight roughly proportional to the country's share in the global economy. No country has veto over the decisions of the majority. It works very well in practice and the United States plays by the rules, with none of the theatre that we have seen in recent months in the chambers of the UN, with its allegations of illegality, unilateralism and the like.

Third, it will probably highlight to the leaders in the Arab world that the sustainability of their regimes-to say nothing of their own personal safety and wealth-is more likely to be safeguarded by political and economic reforms and a gradual move to some form of representative democracy rather than a continuation of the type of misrule that we have seen during the last several decades which has turned the region into an appendage of the global economy. Or, as Thomas Friedman, the foreign affairs editor of The New York Times once put it (perhaps a little harshly): "what does Syria produce that is of any relevance to the world's economy"? (Since I am not a military expert, I will refrain from commenting on the lessons to be learned during the last three weeks for the conduct of war; I have no doubt that Russian generals must be deep in thought.)

Of one thing I am certain. We are on the eve of radical changes in our international system. National institutions and governments, in an evermore interdependent world, are less and less able to address key problems, many of which have acquired an important international dimension. As problems became more global in nature-from the environment to the functioning of the international economy-situations will emerge wh ere important areas of human endeavour are no longer receiving adequate attention, creating the risks of ever more intense crises. Thus the strengthening of the mechanisms of international cooperation, designed to bring into being bodies with the appropriate jurisdiction over problems no longer under the control of today's sovereign states, is likely to become the most important task of the coming decade. The war in Iraq, so fiercely opposed by many, may turn out to be the catalyst for creative, much-needed international institutional changes.




D-r Augusto Lopez-Claros,
Executive Director and Senior International Economist for
Lehman Brothers International in London,
Was Resident Representative for the IMF in Russia during 1992-95.

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