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An interpretation of the Iraq War during 2003 from the perspective of the ideas in, and structure of, the Society, City and Economy.

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Introduction

Ash sywe An interpretation of the Iraq War during 2003 from the perspective of the ideas in, and structure of, the Society, City and Economy. The conflict between President Saddam Hussein's Iraq and the Allied forces may have another weapon of mass destruction to be wary of - the economic and social effects of war. Changes in oil prices and the cost of conflict, billions in the U.S and U.K, might just produce regime change in the Middle East and recession for us all. A possible reason for military action in Iraq is disputed to be about oil. This has many social implications, as the reasons for the war would then seen to be immoral and illegal. The U.S and other interested parties deny this responding along the social and moral argument that troops will be sent to risk their lives for more high-minded objectives like upholding the authority of the United Nations in relation to weapons of mass destruction and human rights. I feel that the conflict does have a sinister relationship with oil and economics, which I will discuss. British Foreign Secretary Jack Straw has acknowledged that the debate is open; that 'the jury is still out' on any underhand causes of war. ...read more.

Middle

These supplies can easily feed releases on the scale of the last Gulf war. Although OPEC may be concerned politically over the American invasion, self-interest has meant they will be compliant. Saudi Arabia has a continuing interest in keeping overseas markets for its only export. This means upholding its status for consistency at acceptable prices. Oil producing countries like Iran and Nigeria may now try and take advantage of the situation to earn additional revenue and market share in this post-war free for all. Both Saudi Arabia and non-OPEC Russia have announced that they will step up production to head off any price shock. At this point, western optimists see interesting prospects as Iraq's installations are reported to be in poor shape but could be brought back into full production with heavy investment, no doubt from countries that have served the allied cause. As a state separate from OPEC, Iraq could turn the taps to full flow allowing production to reach up to eight million barrels per day in five years, challenging Saudi Arabia as the foremost producer. This could lead to the possibility of a new oil economy with less reliance on Saudi Arabia and without the threat of political turmoils in the Middle East turning into a global economic crisis. ...read more.

Conclusion

But under current economic conditions, additional demand financed by government borrowing will spill over into inflation or imports, adding to the current account deficit, which is five percent of GDP for the US and two percent for Britain and their fiscal deficits - three percent and 1.5 percent of GDP. Fiscal and current account deficits of the US in particular would require foreign investors to continue to buy large volumes of government debt. But there are already doubts about the sustainability of the dollar value. It is therefore quite plausible that worries about financing the twin deficit, swollen by war, could help precipitate a sharp fall in the dollar. This would raise the dollar cost of servicing debt in the US, forcing a fiscal adjustment that would further puncture consumer confidence. A dollar fall would also export recession to US trading partners. Worries over the funding of the war and its current aftermath could very easily precipitate a collapse of external and internal confidence in the US economy. Imbalances on this side of the Atlantic are less extreme. Britain is not an oil importer like the US, but a general downturn in oil importing countries would be bound to affect it. The continued close alignment of the American and British economies through private capital flows ensures that any transatlantic economic infection would be catching. ...read more.

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