This shortfall in oil earnings, not the lack of foreign assistance, is the real cause of Iraq's financial crisis. Each reduction of one million barrels per day translates into lost revenues of about $30 million at today's world market price of $30 per barrel. If Iraq increased its oil exports by one million barrels a day -- which it could achieve with a cessation of attacks on its infrastructure -- it would have about $10 billion per year in additional revenues to begin reconstruction.
Iraq's oil production could probably rise to about five million barrels per day within three years, or an extra $30 billion to $40 billion per year -- enough not only to restore basic services, but to achieve big improvements in living standards and economic growth in the medium term. Iraq would not need official development assistance at all.
The biggest costs in Iraq are not for reconstruction but for U.S. troops. America will pay an astounding $51 billion per year for 140,000 troops. If the United States withdrew its troops and gave just a fraction of the financial savings to Iraq in 2004, there would be plenty of revenue to run the Iraqi government.
By focusing global attention on an economic crisis that does not really exist, America has diverted public attention from serious crises that do. Consider the battles against AIDS, tuberculosis and malaria. About eight million people will die of these preventable and treatable diseases in 2004.
In 2001, the world created a global fund to fight them. Yet for fiscal year 2004, the Bush administration is committing just $200 million to that fund. For every one of these dollars, the administration is committing $350 to Iraq. These are grotesquely distorted priorities.
It's time for the world to tell America some hard news: Stop wasting so much money on military spending and redirect your efforts toward the world's poor. That's a financial effort that the world can and should join.
There's just so much wrong with the theory that we broke Iraq and must fix it. It puts the private conscience of Westerners ahead of the political will of the Iraqis. It continues the imposition of the Washington Consensus without Iraqi consent.
But the real reason is that the Iraq project would be hard to achieve under a competent and disinterested leadership. A president who lets his staff tell him what the world is thinking, and leaves a major breach of US law unaddressed for months, just does not have the competence or disinterest to do anything for Iraq.