IRAQ: POST CONFLICT SCENARIOS Conference Call
Analysis
II. Participants.
David Taylor, Scott Urban, Nigel Bowles, Philip Robins, Eugene Rogan.
III. Transcript
align=justify> David Taylor : Good afternoon and welcome to Oxford Analytica's conference call on Iraq. I am the Deputy Editor at Oxford Analytica. I hope that some of you who are 'Daily Brief' clients will have had a chance to read our article in the 'Daily Brief' today looking at the efforts to secure a tough new UN resolution and some of the implications of a resolution being passed for the timing of possible military action. All the issues raised in that article and many others will be discussed by us this afternoon.
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align=justify> Not surprisingly, interest in the subject is such that we have a very large number of clients who have joined us on the call today. We are going to start with very brief presentations by our panel members, highlighting one or two key issues. We will then go into a question-and-answer session and explain the procedure for asking questions at the outset of the session.
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align=justify> Let me just very briefly introduce you to the panel. In Oxford, I have with me Scott Urban, Oxford Analytica's International Economist, who is responsible for all our output on the world economy. Then, linked by telephone, we have three academics from Oxford: Dr Nigel Bowles, who is a fellow and tutor in politics at St Anne's College and our US expert; Dr Philip Robins, lecturer in politics at St Antony's College, who will be focussing on Iraq itself and the immediate region; and Dr Eugene Rogan, also from St Antony's, who will be particularly talking about the impact on the wider Middle East.
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align=justify> Without further ado, I would like to call on Nigel Bowles to start by looking at how the US is going to take things forward from here over the coming weeks.
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align=justify> Nigel Bowles: I would just like to say a word about diplomatic preparations and then a word or two about capacity and intentions. I believe it should be evident by mid-to-end November whether Saddam will or will not comply with the new UN Security Council resolution that I expect the United States and the United Kingdom to achieve from their Security Council colleagues, probably with Russian support or acquiescence, probably with Chinese abstention, and probably by circumventing French objections. I see the French objections as politically the most difficult over the course of the next few days.
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align=justify> Many in the State Department share the widespread view of European foreign ministries that Saddam will reject a new Security Council resolution of the kind I have described, or at least play for time in its implementation, to the extent that the United States could deem it to be obstructing. I believe that under those circumstances we would expect to see military action launched before Christmas. If not, the political window of opportunity for the United States is likely to close, which would be unacceptable to the White House and the Defense Department. For that reason, if for no other, I believe the White House and the Defense Department (and I use that terminology advisedly) will seek to maintain the initiative, with a view to going to war before the end of the year.
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align=justify> On the question of capacity, I believe there are assumptions among some Europeans -- not in foreign and defence ministries but elsewhere -- that US forces on the ground capable of being inserted rapidly are smaller than they really are. In fact, there are something of the order of 55,000 troops in the Persian Gulf region and South Asia, including the units in Afghanistan. There are substantial Special Forces capabilities, some of them probably already in Iraq. There is also expanded troop capacity in Turkey; a very substantial duplication at the al-Udeid air base in Qatar of the Prince Sultan air base near Riyadh in Saudi Arabia; and US Air Force planes are operating from Afghanistan and former Soviet republics.
align=justify> It is probably right to note at this point that non-US forces and capabilities, while politically very important for the United States, are militarily irrelevant. I believe the European allies' military contributions, including that of Britain, count for little or nothing.
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align=justify> As to US intentions, they are for a rapid, overwhelming and precise air war which results in the elimination of weapons of mass destruction facilities, with the expectation of regime change of a kind favourable to the United States. Much European opinion supposes that such a regime change is no more than hoped for in parts of the Defense Department and the White House. However, in my opinion, it is actually expected in much of the Defense Department and in the White House: I am quite sure that Donald Rumsfeld, Paul Wolfowitz and Condoleezza Rice (to name but three) actually expect regime change to come about, and that this can be achieved with minimal civilian casualties.
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align=justify> By mid-to-end November, it should be evident whether Saddam will or will not comply with the UN Security Council resolution. Whether for reasons of his obfuscation, deliberate resistance or out-right rejection, I believe it likely that there will be military strikes before Christmas.
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align=justify> David Taylor: Thank you, Nigel, for that confident prediction. I would now like to ask Philip Robins to address the kind of scenarios that we might see in Iraq, if indeed we did see US military action and, therefore, some kind of regime change. What might Iraq look like after the action?
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align=justify> Philip Robins: Let me address my remarks on the one hand to what sort of scenarios might take place in the context of war and regime change itself, and then secondly say a word or two about slightly longer term scenarios for Iraq.
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align=justify> As far as the conflict and the regime change variables are concerned, we are probably looking at three broad types of scenario. First of all, the scenario whereby there is in fact regime change but it takes place short of a war itself. Under these circumstances, it is probably only likely or feasible that regime change would take place if those on the inside of power in Iraq were absolutely convinced that the Americans are serious -- serious not just about the application of aerial power (about which I believe there is a widespread consensus), but also about putting large scale infantry numbers into the field. At that stage of overwhelming force, there would, I believe, be some serious contemplation on the part of many on the inside of power in Iraq about what their options are beyond Saddam Hussein.
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align=justify> If such a move against Saddam does not occur before an actual shooting war takes place, or before it gets very serious indeed, then I think we are looking at one of two other scenarios. One is a 'short war' scenario, whereby the Americans are very successful in terms of their aerial bombardment, make rapid progress on the battlefield and quickly separate out most of the armed forces of Iraq from the smaller 20,000-25,000 inner core of fighting men who form the rump of the security establishment inside Iraq.
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align=justify> The other, third, scenario is that of a much longer war. Here, we would be looking at a situation whereby the Americans may indeed make rapid territorial gains initially but that those gains would become bogged down, either because of an unwillingness to use aerial power against the concentration of Iraqi forces in particular urban areas, or perhaps because of a reluctance by the United States to deploy large numbers of troops in house-to-house, street-by-street fighting. It is under the circumstances of an extended war, when political questions might start to intrude and obfuscate the initial military successes that the United States would have gained, that I believe a situation of much more uncertain outcome becomes likely.
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align=justify> As for scenarios beyond a war and even regime change, we are basically looking at three options. Firstly, there is the possibility of a continuation of authoritarian rule if a military strongman ousts Saddam and takes over, particularly as a pre-emptive strike in order to make sure that a full shooting war does not take place in Iraq. A second scenario would be some sort of constitutional arrangement, whereby the Americans win the war on the ground, occupy the country and set about establishing a constitutional system which may start to look like a formal democratic system. A third scenario would be one much more concerned with fragmentation, chaos, internal conflict and internal collapse, whereby the loss of centralised authoritarian power leads to a free-for-all right across the country -- a free-for-all which the Americans are not willing or in no position to do anything about -- and therefore we start to look at a situation whereby Iraq may be a divided and unstable entity over the longer term.
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align=justify> David Taylor : Thank you very much, Philip. That leads us on to Eugene Rogan. Eugene, Philip has posited three types of outcome to a US war, and three types of political arrangement which might follow. I suppose the neighbouring states are going to have very different views about those different sets of outcomes.
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align=justify> Eugene Rogan: Absolutely, David. I am speaking to you from Washington DC where I have been for the last couple of weeks. Moving from Europe to the United States, I have become aware that there are three very distinct ways of viewing the breakdown in the order in the region. In the United States, there is the notion that the years of sanctions have really led to a strengthening of Saddam Hussein and a redoubling of his efforts to acquire weapons of mass destruction. In Europe, there is, I believe, a more sceptical view about just what Saddam Hussein has achieved and what the balance of sanctions has been.
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align=justify> However, as we move to the Arab world, you find that people in the street see this war as one entirely of America's making, and that there is nothing that Saddam Hussein has done of late to warrant this attention. Indeed, their understanding of what sanctions have achieved has been the emiseration of the civilian population, but certainly no grounds gained in the weapons of mass destruction programme. That, they assume, has been very well undermined, both by the last Gulf war and the subsequent decade of sanctions.
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align=justify> Within the region, the prospect of war is hugely de-stabilising because public opinion sees the United States as behaving in a unilateral and rather lawless way. This raises certain questions because most of the main players in the region are dependent on the United States either economically (such as Egypt and Jordan, who receive substantial American aid) or politically, in terms of maintaining their regime stability (the Gulf countries). We saw that most clearly in the last Gulf war when the United States intervened. Any country which is too closely linked to the United States is going to be coming under a great deal of pressure and I think there is a range of questions we should be asking about how those pressures will play out with a US-led war looming in Iraq.
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align=justify> I believe there are two considerations, alluded to earlier by Philip. One is a question of duration: the longer this war goes on, the harder the pressures are going to be in the region. The second consideration is one of civilian misery. Just as public opinion in the Arab world is outraged by a decade of Iraqi civilian suffering under sanctions, so I believe Arab public opinion will be outraged by the perception that there are high civilian casualties as a result of this war. This will bring pressures to bear on regimes and also empower non-state actors who are hostile to Arab regimes. Here, we are thinking about Islamist groups and radical groups who take violent action either against Arab governments seen as illegitimate, or against American interests, or -- where available -- Israeli interests. A country like Egypt might come under a great deal of internal pressure as American or Israeli companies and civilians based in the country become the targets of local violence. There is then a question of whether, in promoting war against Iraq, we are seeing the Americans raise the stakes in the war on terrorism to their disadvantage.
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align=justify> David Taylor : Indeed, it is an interesting and somewhat ironical question whether taking action against Iraq helps or hinders the wider war against terrorism. I am going now to go to our fourth introductory presentation and ask Scott Urban to sketch out one or two points on the impact of these events we have been talking about on oil prices.
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align=justify> Scott Urban : Thank you, David. The prospect of a war in Iraq has already driven prices up quite a bit. We have already seen them puncture the thirty-dollar mark and there is a substantial war premium built in to prices right now. Until this situation is resolved one way or another, we are going to continue to see this high oil price. Obviously, we do not know what is going to happen but, based on historical precedent, we think the price will go as high as sixty dollars but only for a very short time. Once the market is content that supply will be available, either through Saudi Arabia or extra production throughout OPEC, it will calm down; in fact, we might see it reverse the risk premium and go back to a twenty-dollar price. Therefore, we are quite various on oil prices. The key variable, as Eugene Rogan has pointed out, is instability. If the war turns out to be de-stabilising for the region, then that can have very negative consequences for the oil price, particularly if we get to see some kind of domestic disturbance that interrupts oil supplies, perhaps in terms of sabotage of local targets dealing with the transportation or production of oil.
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align=justify> David Taylor : Thank you very much, Scott. I believe these presentations have raised a lot of issues and I hope that they will stimulate you to ask lots of questions.
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align=justify> David Taylor: There will probably be a short delay while you are putting your questions so I will start the ball rolling by asking one of the big questions that seems to emerge from our introductory presentations. Perhaps I could ask Philip and Eugene to comment briefly on this. Picking up on Eugene's comments about the effect on the regional regimes of change and instability in Iraq, I wondered if we could look at the particular interests of the major players -- Saudi Arabia, Turkey and Jordan -- and the different outcomes that Philip sketched out. We were talking about a possible successor authoritarian regime, a more democratic regime that the United States seems to favour, and a fragmentation scenario with power being diffused and grabbed by more local interests. Presumably, Philip, Iraq's neighbours prefer an authoritarian outcome, and perhaps we could talk about what they particular fear from the other two outcomes?
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align=justify> Philip Robins: It is more than likely the case that the authoritarian outcome is the devil they know, so to speak. It is what they are familiar with, but minus the destabilising, unpredictable actor that is Saddam. For those who particularly want to see the maintenance of a very strong state in Iraq, notably the Turks (who are concerned about Kurdish secessionism in the north) and the Saudis (who are concerned about the break-up of Iraq and the possible emergence of a Shia state immediately to their north), the authoritarian continuity scenario is a very comfortable one.
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align=justify> The situation in Jordan is slightly different. Although Jordan does not want the Iraqi state to break up, the Jordanian economy needs to have reconstruction in Iraq in order to turn its own fortunes around. Therefore, the Jordanians will want a situation that allows an end to sanctions, a renegotiation and rescheduling of the Iraqi external debt, and a reconstruction of the country which will, in turn, benefit their own economy. There are thus some variations within that general approach.
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align=justify> David Taylor : Eugene, would you like to add anything briefly at this stage?
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align=justify> Eugene Rogan : The only thing I would add, which is really not related to regime change so much as the broader scenario is that, inevitably, whatever happens in Iraq is going to have direct implications for Israel and the Palestine/Israel question.
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align=justify> David Taylor : Perhaps one could argue that it already has, in terms of the current pressure on Sharon to end the siege of Arafat's headquarters.
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align=justify> I would like to now move to our first questioner.
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align=justify> Client : Yes, I have two questions. The first question is that in your shorter-term scenarios you did not make any reference to the possibility that there would be no war. What is your view on the possibility of Saddam basically carrying everybody together in some way or another through to some time early next year?
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align=justify> My second question concerns the critical nature of the windows of opportunity, some of which are tied to the difficulty of fighting in the heat come the second quarter next year, while others relate to the US presidential elections that will begin towards the end of next year. I would like very much to hear your advice on what you see as the critical windows that matter here.
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align=justify> David Taylor: Thank you, those are two very good questions. In reference to the first question about no war, I believe we did talk about the possibility of Saddam being overthrown without a war, although we have not yet looked at the issue of whether Saddam might actually survive without a war, which I suppose would imply that he knuckles under and at least gives a convincing display of co-operation with weapons inspectors. Philip, is there any other way that he could survive?
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align=justify> Philip Robins : No, in my opinion. Assuming in particular that there is another UN resolution, and that it is a robust one along the lines that we have discussed, then I think his compliance will be a minimum [requirement] in order to have any hope of defraying a conflict. I still think that one has to take a no-conflict scenario seriously, partly because it is the default option (if nothing happens, then there will be no war), and partly because misgivings amongst the American public and much of the international community, along with the very precise and constrained windows of opportunity, mean that it is perfectly conceivable that war will not take place. One only has to think about a major development in another part of the world which distracts the international leadership -- and the American leadership in particular -- to see how easily war can in fact be knocked off course. However, I still believe that, on balance, there is more likely to be a war than not.
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align=justify> David Taylor: Do you think there is any remote likelihood that Saddam would co-operate sufficiently? Perhaps more importantly, would he be able to go through the motions of complying with what might be very tough and humiliating resolutions and survive with his domestic constituencies?
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align=justify> Philip Robins: I do not believe there is any likelihood of Saddam being prepared genuinely to co-operate with weapons inspectors. This has been his record over the last eleven or so years. He has been willing to forego more than 120 billion dollars' worth of oil income in order to have some possibility of retaining his capacity in the area of weapons of mass destruction, so I believe that one can take it as read that his co-operation will not be sincere. However, his co-operation could be very useful as a way of pushing back the timetable that we have been discussing, being mindful of the sensitivity of that timetable.
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align=justify> As far as Saddam surviving domestically is concerned, the greater the humiliations which are heaped upon him in terms of the erosion of Iraqi sovereignty, the more problems that will create for him domestically. However, we have to be very careful about assuming too much because there was a widespread assumption back in Spring 1991 that he could not survive the humiliating defeat in Kuwait, nor the uprisings that took place in February and March of that year, nor Resolution 687 (the 'mother of all resolutions'), which put so much emphasis on weapons inspectors. It was widely assumed that it would be impossible for his position to continue, given the requirements made of him. Nonetheless, he showed on all three occasions that while he may be strategically flawed, as a tactician he is capable of pulling off things that he is not expected to do.
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align=justify> David Taylor: Yes, absolutely. Moving on to the second question that the client raised, Nigel could I ask you to address the question of the windows of opportunity -- both the political and the climatic ones?
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align=justify> Nigel Bowles : I believe the question of duration is absolutely key here. In a sense, I believe President Bush has not yet undertaken the task of educating the public on the compelling need for the United States to go to war. It is quite clear that a segment of American public opinion is entirely behind the President in this respect, but I think that his education of the public, which is a key component of his capacity to lead public opinion, still has some way to go. I was quite struck over the course of the last week that Tony Blair's speech following the publication of the intelligence dossier in London should have received quite the widespread attention that it did in the United States. It was as if (and not for the first time) the task of education on this question was being left to others and almost being 'franchised out'.
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align=justify> As to the window of opportunity, I believe that much needs to be done politically in terms of the President's leadership of public opinion before the window opens. Equally, the window of opportunity might well begin to close after the beginning of the New Year. I think the view in the White House and the Defense Department is that public opinion can be educated, led or bolstered sufficiently to enable that window to open before Christmas. The determination of the key actors in the White House and the Defense department (though not the State Department) is so great that it is unlikely they would willingly acquiesce in a strategy by which the United States did not initiate action before Christmas, assuming as I do that Saddam will resist or obfuscate.
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align=justify> That said, the window having been opened, and assuming that a large, precise and well-targeted air campaign begins, the duration of the war and the consequences of US action are extremely important. The longer the war continues without demonstrably achieving either of the two objectives set, namely the elimination of weapons of mass destruction (a case which is extremely difficult to prove), and effecting regime change of a kind which is at least capable of being presented to US, Western and even Middle Eastern opinion as an improvement upon the status quo, (which I believe to be an extraordinarily demanding task), then the riskier it becomes politically and the greater the incentive for President Bush's articulate opponents in Congress and elsewhere. Within the last week some of those opponents -- Tom Daschle and Edward Kennedy -- have already shown just what potent critics they can be of the administration's position.
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align=justify> I believe that in the State Department, in contrast to the Defense Department and the White House, there is a much fuller realisation that the realities of war will probably be vastly more complex, messy and difficult to control than the expectations of some of those in the Defense Department and the White House who have been amongst the most public proponents of rapid and overwhelming military intervention.
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align=justify> David Taylor: Thank you very much, Nigel. We have lots of questions so I would like to move on to our next questioner.
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align=justify> Client: My question is what economic impact on the Middle Eastern states, such as Egypt and Jordan for example, do you expect from an invasion of Iraq?
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align=justify> Eugene Rogan : The most obvious answer is that any political or military instability in the region has a disastrous consequence for the national economies. Countries like Egypt and Jordan rely heavily on tourism and we know that tourists are not terribly keen to go into what they perceive to be war zones, and when those industries suffer whole segments of the population are economically disadvantaged.
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align=justify> It is also very bad for the Middle East because it is already so far behind in the game without war, in terms of lower foreign direct investment to the region. It also has negative effects on currencies and import prices.
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align=justify> For Jordan, every severance from the Iraqi market is taking away its single largest market. No doubt this has a great deal to do with the high degree of popular support the Jordanian people show for the welfare of the Iraqi people.
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align=justify> I believe the economic consequences are very serious for the regimes and will be part of the larger bill that America's friends in the region will present the United States with for not taking a stronger anti-war position than they have already.
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align=justify> David Taylor: Philip, would you like to add anything to those points?
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align=justify> Philip Robins : In putting the spotlight on the difficult short-term effects, one also has to take into account the experience of the last twelve months, because we are not simply talking about a normal situation which will get worse in the context of conflict. We are talking about a situation which is already worse as a result of the decline in tourism in the wake of September 11. In Egypt, the situation will get worse following an already marked cumulative devaluation; there has already been a big drop in tourists (especially through the lucrative winter season), and a recourse to international (particularly US) markets for additional financing.
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align=justify> David Taylor: Is it possible to look a bit further ahead and see some benefits coming out of a change in Iraq, or is that too hard to call at this stage?
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align=justify> Philip Robins : If there is reconstruction in Iraq, then basically that will be good for the neighbouring economies in terms of contracting or re-exporting opportunities (the Jordanian port of Aqaba would benefit, as would probably Kuwait, Turkey, Syria, etc.). Of course, that very much depends on what happens after a war. If one does not get the best-case scenario of reconstruction but, rather, an extended, messy and difficult transition, then that is simply going to make potential investors and tourists risk-averse to those countries that otherwise would be looking for an advantage.
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align=justify> David Taylor: Thank you very much. I will move on to the next questioner, if I may, but we can come back to these points and similar points later if anybody would like to pursue them further. I would now like to call on our next questioner.
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align=justify> Client: Good afternoon and thank you for your brief. Assume for the moment that a best-case scenario were if a semi-authoritarian, or even a vaguely democratic, regime gets into power, Iraq still has an enormous hill to climb with a one-billion-dollar debt mountain. What needs to happen in Iraq politically and economically, and in terms of its interactions with its neighbours, in order for it to become an active member of the international trade community?
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align=justify> Philip Robins : Clearly there is plenty to be done in Iraq in terms of the reconstruction of utilities and the rebuilding and expansion of the economy in general. What the Iraqis need first of all is the finance to do that. Secondly, they need a stable context in which to go ahead with those changes domestically. Thirdly, I believe they need a co-operative international community -- one that is going to relax and remove sanctions, one that is going to be sympathetic to the idea of debt renegotiation, perhaps even debt forgiveness, and one that is going to be an enthusiastic participant in the reconstruction of the country.
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align=justify> Those are the sorts of things that one should be looking for, and much of that will depend on the political outcome inside the country. Clearly, stability will depend on that, as will external relations to some extent. As I have suggested, the financial element, both in terms of access to credit and the ability to sell oil and increase oil production, will again be very important.
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align=justify> David Taylor: Eugene, who are the key outside players going to be in this? Are we talking about the international institutions and Western oil companies that might go in, or are Iraq's neighbours going to play an important role in determining to what extent Iraq is able to reintegrate into normal economic activity?
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align=justify> Eugene Rogan : Oil is Iraq's blessing and its curse, and it is what will make Iraq a worthwhile risk for those who would invest in the country to try and get its economy up and going. However, one consideration is that this is going to be an expensive war for the United States. In the last Gulf war, the United States drew very heavily on the Arab Gulf states -- Saudi Arabia and the other GCC members -- to foot the bill, but the very fact that the United States is pursuing this more or less unilaterally means that there will be no prospect for someone else to pay the bill, and the American taxpayer gets very impatient with paying large war bills.
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align=justify> Therefore, I do not expect the United States to be particularly generous towards Iraq in its reconstruction simply because it will have spent its kitty just making war to change the regime. The most we can expect is that the United States might bring pressure to bear on Kuwait, for instance, to forgive the reparations bill for the 1990 occupation of Kuwait, and persuade the GCC states to assist with an Iraqi 'Marshall Plan'.
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align=justify> I imagine that the pressures will play out in that sort of way but with a rather parsimonious United States. The American record in investing in post-war reconstruction in Afghanistan gives very little hope for a more generous stance towards Iraq.
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align=justify> David Taylor: What does that imply in terms of what sort of regime might emerge in Iraq? In other words, if we saw a regime which did not look very much different from the current regime minus Saddam, then presumably in those circumstances the restoration of brotherly relations with countries like Kuwait becomes harder and the scenarios in which Arab states would be willing to reach into their pockets become less plausible. Do we need to look at the politics there do you think?
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align=justify> Eugene Rogan: It is highly speculative to come down with hard and fast conclusions but I would say that the one advantage of having a military dictatorship succeed Saddam would be that, for the price of keeping the military strong, you can stabilise the politics of the country without having citizens demanding accountability (a new notion for Iraqis I am sure!). Also, if there is to be economic hardship to follow, it will probably be easier and cheaper to manage under a strongman than under some more liberal form of political system.
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align=justify> David Taylor: I would now like to go onto another question but before doing so I would like to give you a last chance to ask questions if you have not done so already. I will ask the operator to put more questions.
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align=justify> David Taylor: Whilst you are putting your questions, I am going to go on to our next questioner.
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align=justify> Client: I was at the [Oxford Analytica] conference two weeks ago, where I participated in a session on the Middle East, so I am here to pursue my knowledge on the topic. I have also read the 'Daily Brief' article of September 18 on Iraq after Saddam and have some comments on the three scenarios (authoritarian, constitutional and fragmentation).
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align=justify> The first scenario appears to me unlikely because I do not see who the strongman could be. That strongman would need to be very strong indeed because there are already three regions in Iraq that have been building grievances for a while. Also, such a dictatorship would be unlikely [to exist] without the commitment of American soldiers -- and there is reason to believe that there would be no commitment because the Americans would fear too many casualties. Also, [another dictatorship] would not be very welcome and would provide the best recipe for chaotic fragmentation.
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align=justify> My second point relates to the constitutional option. The 'Daily Brief' article of September 18 mentioned the restoration of the Hashemite monarchy as one possible solution. It may not be constitutional in a democratic sense but we have read that this could be some kind of organised fragmentation of Iraq, with the Sunni part going to Jordan, the Shia part going to Kuwait, or some other region, and the Kurds being absorbed into Jordan but with more independence within Jordan.
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align=justify> I wonder why there is not more thinking going into this option, since this seems to be at least one way of thinking rationally about what would happen after the war without any big commitments from the Americans, and it would at least involve the other Middle Eastern countries?
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align=justify> David Taylor: Thank you. Philip, you have three critiques of your scenarios there. Would you like to go through them?
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align=justify> Philip Robins : Sure. I believe an authoritarian centralised scenario cannot be ruled out. After all, this is the sort of regime which we have become used to in the Iraqi context, not just under Saddam but also under the Ba'ath [party] before Saddam, under the military rulers of 1958-68, and even before then, under the monarchy. There is a strong political experience and political/cultural underpinning as far as the Iraqis are concerned which means that one has to take this possibility seriously.
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align=justify> Who might actually be a strongman, of course, is another question. I believe one can generate some ideas, but it is immensely difficult to do so with any great confidence when one is on the outside of the regime. However, if those who are part of the regime perceive that the only way of saving their own skin and holding on to political power is to unseat Saddam and rally behind a figure of authority who may emerge as a stronger leader, then that is really quite a plausible possibility.
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align=justify> As far as the constitutional and Hashemite scenario is concerned, of course constitutionalism can embrace democracy but it does not have to simply be a liberal democracy in its content. One could imagine other forms of a constitutional process which might have a different flavour to a liberal democratic one. I believe the Hashemite solution that people have thought about for Iraq has been considered separately from Jordan. The chances of Jordan taking over Iraq, or consuming major parts of it, are less likely, partly because the Jordanian state itself is relatively weak and somewhat divided between key communities inside that country. Also, most countries in the region will be extremely reluctant to see the Jordanian state grow to absorb Iraq as well. This is something that will offend the dynastic tendencies of the Saudi royal family. It will also offend the regional leadership aspirations of countries like Egypt and Syria. When one is talking about a Hashemite restoration in Iraq, one is probably looking at another Hashemite figure. Prince Hassan [the former crown prince of Jordan], who has his supporters in Washington, has been mentioned as one such figure.
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align=justify> David Taylor: Okay, thank you very much. Let us now move on to our next questioner.
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align=justify> Client: I would like to know where you think the future of the Kurds lies in a post-Saddam Iraq, and, in particular, what risks you feel there are of over-spill into Turkey?
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align=justify> David Taylor: Eugene, would you like to start off? We are talking about what future we see for the Kurds both inside Iraq and in the immediate region, with particular reference to Turkey.
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align=justify> Eugene Rogan : The Kurds in Iraq have never disputed the integrity of the Iraqi state. What they seek, and what they have enjoyed in the aftermath of the last Gulf war, is a degree of autonomy and self-determination within the northern third of Iraq over which they have grown to exercise day-to-day rule over their communities. I assume that they would seek an enshrining of those rights under any new Iraqi regime. I believe that the source of instability is more likely to be that the leaders of the Patriotic Union of Kurdistan (PUK) and the Kurdish Democratic Party (KDP) would fall out again and succumb to the kind of fratricidal wars which have so torn apart the Kurds in recent decades. I imagine that the post-war scenario that the Bush administration has accepted is one of stabilised domestic Kurdish players within a context of an autonomous Kurdistan under a form of federated Iraqi state.
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align=justify> David Taylor: Philip, would you say that Turkey is going to be happy with such an outcome, or could one envisage circumstances in which it might go as far as to intervene in northern Iraq if it felt that the Kurds were getting too powerful or taking over too much territory (territory which perhaps Turkey had originally cast envious eyes over itself in past times)?
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align=justify> Philip Robins : The Turks are certainly concerned about what might happen in northern Iraq because of the effect that it might have on its own Kurdish areas and its own Kurdish population. There is also the possibility that there could be a resumption of the armed insurgency by the Kurdistan Workers' Party (PKK), which has been observing a ceasefire for over three years. There are still significant numbers of PKK fighters in the mountains just over the border, which makes the Turks pretty nervous. They are certainly nervous as well about what they consider to be a so-called federal solution, which they see as a thin end of a wedge involving the diminution of central power in Iraq. They fear that the weakening of the central unitary Iraqi state would mark the beginning of a process which would ultimately lead to Kurdish secessionism and the creation of a Kurdish state.
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align=justify> Perhaps the Turks ought to be a little bit more relaxed. After all, they have been making some concessions domestically to their own Kurds, who are very much on the back foot, demoralised and, some would even say, defeated. The Turks are thus in a position to possibly be a little more flexible, although that is certainly not clear in their public pronouncements.
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align=justify> As far as their attitude towards northern Iraqi territory is concerned, of course they do reserve the right to go over the border and use military means against the PKK. They have already done so, establishing what is essentially a de facto security zone in the north of Iraq. They protest that this is purely a device to guarantee their own security, and not a long-term measure, nor a measure aimed at territorial acquisition. Despite these assurances, many in the region have yet to be convinced that this is indeed the case. Looking at Turkey's defence strategy and the ideology of the Turkish state, I believe there is a strong impetus towards the maintenance of the territorial status quo, but of course events (as we have seen over the last 10-12 years) can easily lure neighbouring states into domestic Iraqi matters. The idea that this will not turn into a long-term occupation is one that one cannot be absolutely confident about.
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align=justify> David Taylor : Okay, thank you. Perhaps I could just ask Eugene to comment briefly on the fragmentation scenario and how that would affect the Kurds. I suppose one fear might be foreign intervention of one sort or another, and another fear could conceivably be that the signs that al-Qaida is active there might generate fears of northern Iraq becoming a kind of 'failed state' in which terrorists might flourish. Would you like to comment on fragmentation and what sort of implications that might have for the northern part of Iraq?
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align=justify> Eugene Rogan: You have very ably outlined some of the key concerns, but because these are concerns that one can only speculate about at this point, I cannot assign any probability to these things. The only thing I can say is that over the best part of the past decade there has been greater stability in the north of Iraq under the Kurdish autonomous arrangement, and that the Kurdish parties have been in very direct discussions with the United States. The United States is, of course, very concerned to keep Turkey, its NATO ally, mollified and to reassure it that its essential strategic concerns will not be threatened. Also, the United States is very concerned to prevent the emergence of any more 'failed states' that may become a haven to precisely the target in its war on terrorism.
align=justify> These are concerns that I believe the administration takes very seriously as it prepares for this war, and it is perhaps one area in which it has been most successful in addressing its allies' concerns.
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align=justify> David Taylor: Okay, thank you very much. Since time is pressing and we have a couple more questions, let me ask the next questioner to put her question.
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align=justify> Client: My question deals with markets. You have given several scenarios -- short war, long war, authoritarian regime, other types of regimes. After all is said and done, how quickly -- and how well -- do you believe financial markets will recover?
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align=justify> Scott Urban: There are going to be two cost-cutting tendencies here. One is our view on the financial markets, which is that they have a way to go down, and I do not believe they are going to find particular comfort necessarily in the medium term from the resolution of this conflict. On the other hand, a very low oil price will be very supportive of markets and that will run in the other direction. I believe the markets are likely to see the war as a reason to sell and that will see an adjustment that has to take place, regardless, on the pretext of the war for very good reasons, especially due to oil prices. However, I would not look necessarily for a strengthening of markets if the best-case scenario happens here, which is a very quick resolution to the crisis.
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align=justify> David Taylor: Okay, I am going to leave that issue there if I may because I want to try to take a couple more questions before we go. Please can we have the first question.
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align=justify> Client: My question is why does Iraq not accept the UN inspectors? Is it a matter of pride or sovereignty, or is it really afraid that they will discover weapons of mass destruction? Secondly, what is the real logic behind the US position on Iraq?
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align=justify> David Taylor: Okay, thank you very much. Since time is short, I would also like to take in the remaining question.
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align=justify> Client: Certainly, thank you. I have a question and a comment. With regard to the American public and their willingness to support the President, I notice in the latest Washington Post a survey showing that 61% of the American people support the President's action to remove Saddam. Hard-left senators like Kennedy and Daschle notwithstanding, I believe the President will take that sort of support to the bank and the Democrats may well be on their way to losing the US Senate as a result of their opposition.
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align=justify> My question regards the pessimism that I heard regarding Iraqi reconstruction. Iraq is not Afghanistan; they happen to have a commodity called oil. Therefore, even if oil does go back to some lower amount per barrel, there is a resource there to facilitate reconstruction over the long term. I wonder what your thoughts are about the ability to leverage that oil resource in order to support Iraqi reconstruction over the long term.
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align=justify> David Taylor: Perhaps I could ask Nigel to address briefly the question of the logic of the US campaign against Iraq. Perhaps I could then ask Philip to deal with those two other questions: Saddam's logic in not accepting the UN weapons inspectors and how Iraq might leverage its oil resources in order to facilitate reconstruction.
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align=justify> Nigel Bowles: There is certainly no single US position and that is part of the difficulty the President has in explaining his position to the American people and to the members of Congress. I take my indications not from liberal Democrats but from moderate and conservative Republicans. I spoke to such a person following the House Armed Services Committee hearing of 10 September. The point this person put to me was as follows: 'I am all in favour of the President's position personally, but the difficulty I have is going back to my district and explaining to my constituents why the President is taking the position he is because he has not yet explained it to us on this committee -- his political friends within the Republican party.' I believe that indicates something of the political difficulties that the administration has, and part of the reason it has that difficulty is because of the divisions within the administration, most particularly between the State Department on the one hand, and most of the Defense Department and the core White House team on the other.
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align=justify> There is no single logic and it is perfectly possible to explain the President's stance by reference to standard, neo-realist assumptions about international power. It is also possible to explain it by reference to the United States' essential and core national security concerns. Thirdly, it is possible to explain it by reference to the promulgation of American democratic values throughout the Middle East: there are many influential persons within the administration who have come to the view that the time is right for a radical extension of democracy in the Middle East, although I think one must regard that as an aspiration rather than a policy.
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align=justify> David Taylor: Okay Nigel, thank you very much. Philip, I am briefly going to ask you to look at those two questions that I mentioned earlier: Saddam's logic in not accepting inspections, and the leveraging of Iraq's oil resources.
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align=justify> Philip Robins : The formal position at the moment is that the Iraqis are accepting weapons inspectors. We do not know the basis on which they think they are accepting those inspections and how those inspections will play out, if indeed they take place, but the formal position is that there will be a renewed round of inspections. The Iraqis have of course tried to constrain the weapons inspectors in the past, and have been ill disposed towards their return since December 1998. This [stance] has a number of aspects to it. One is Saddam's standing inside his own power base. The more he can be seen to be facing down the US-led international community, and the more he can be seen to be continuing with oil production and retaining his weapons of mass destruction, the more that bolsters his standing within his own power base, and the more it reaffirms his fitness to continue to be the head of Iraq, or the head of that particular variant of the regime.
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align=justify> There is, of course, also the logic that weapons of mass destruction are a very useful deterrent to further mass uprisings in the future, particularly from the Shia-populated south. Furthermore, these weapons are the key to Iraq's standing and power in the region over the long term if there is a continued reintegration of Iraq into the regional political map, which seemed to be the case until fairly recently.
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align=justify> On the issue of oil and reconstruction, clearly oil is going to be very important in terms of reconstruction. It is going to be the element that will make outsiders interested in Iraq in a way that otherwise they would not be interested and in a way that perhaps they are much less interested in Afghanistan. We have not argued that oil is unimportant. What is important is the basis on which Iraq can export its oil, the level of revenues accruing to the Iraqi government from the export of oil, and the extent to which they have control over the way in which that oil revenue can be spent. Clearly, under sanctions, all of those elements have been somewhat circumscribed. In the future, if Iraq is really going to be in a position to reconstruct, then there has to be a much freer and open basis on which oil is exported and on which new capital can be made available against those oil resources which remain in the ground.
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align=justify> David Taylor : Okay, that probably brings us neatly round to the question of what the outcome of the campaign might be and what sort of regime we are going to see in Iraq and on that note we must end proceedings as we have now run over. I am sorry that we have not time to go on any longer as there are plenty more issues that we could have discussed. I would like to thank very much both our experts and also all of you who have called in and made it such an interesting and wide-ranging discussion.
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align=justify> May I remind you before we go that tape recordings and written transcripts can be made available and, if you would like one, please contact your usual point of contact in our Business Development Team. Of course, if the decisions you face require more in-depth analysis of the implications of any of the issues we have discussed, then please speak to your normal contact about our bespoke consultancy and research services.
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align=justify> Otherwise, it remains to hope that you will join us for our next conference call, which we will schedule for next month on a topic of current interest. If you have any ideas for subjects we could cover, we would be very interested to hear them. In the meantime, goodbye and thank you for joining us today.
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align=justify> [ End of conference call ]
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