Multi-faceted War Mongering

[JBFRAME at aol.com]

War on Iraq could boost world economy-U.S. official

By Pawel Kozlowski

WARSAW, Poland (Reuters) - A senior U.S. Commerce Department official said 
Wednesday that a possible war on Iraq could boost the global economy by 
eliminating a terrorist threat and releasing fresh oil supplies onto world 
markets.

The comments in Poland by Under Secretary Grant Aldonas came amid diplomatic 
wrangling over sending weapons inspectors to Iraq, which President Bush says 
is threatening the world with weapons of mass destruction.

Aldonas told a news conference that war was not inevitable and the impact on 
the world economy would depend on how long the conflict lasted, if it 
happened.

"The combined effect may actually be positive economically because it would 
eliminate one of the real sources of terror and one of the real clouds 
hanging over the world's economy," he said.

"At the same time it will open up the spigot on Iraqi oil, which would 
certainly have a profound effect in terms of the performance of the world 
economy for those countries that are manufacturers and oil consumers.

"That obviously isn't the point of any action taken against (Iraqi leader) 
Saddam Hussein and Iraq but certainly it would be one of the results 
economically," he added.

Iraq is allowed currently to export controlled volumes of oil under U.N. 
supervision imposed in the aftermath of the 1991 Gulf war. But it has shut 
down supplies sporadically to rattle oil markets as part of a campaign to get 
U.N. sanctions lifted.

Aldonas' comments came after World Trade Organization Director General 
Supachai Panitchpakdi said Tuesday an Iraq war could have a limited, but 
negative, impact on the world economy. The WTO chief said military action 
might cause exchange rate volatility and boost transportation and insurance 
costs, but would be unlikely to undermine world trade.

"The worst it could do is subject (global commerce) to some cost inflation 
and some slowdown but not really to undermine the whole process," he added.

Washington is pressing for a tough U.N. Security Council resolution which 
would ensure full access for weapons inspectors, backed up by the threat of 
military action if Baghdad fails to comply.

Aldonas was in Poland on a trip to boost economic ties and discuss the impact 
of a dispute between the European Union and the United States over U.S. steel 
import tariffs. Poland is a NATO member and candidate to join the EU.

10/02/02 12:41 ET

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