Sanctions on Iran and its oil exports would cause "an enormous
disruption" to the world economy, an American Nobel prize winner in
economics said on Wednesday.
If the UN Security Council voted for sanctions against Iran, "it
would mean an enormous disruption as oil prices might rise to over
US$100 (per barrel)," said Joseph Stiglitz, who won the Nobel Prize
in 2001.
He made the remarks in an interview with the German news
magazine Der Spiegel.
"You can increase the price from US$25 to US$40 and people can
absorb it. If the price rises above US$60, they become unhappy.
They start to adjust, they move to smaller cars, drive a little bit
less," Stiglitz told the magazine.
"At US$100 or US$120, there are major changes in lifestyle. The
sales of cars will plummet. Poor people will be facing real
problems of heat versus food," he added.
Talking about the war in Iraq, the economist said the war was
"much more difficult than President Bush and his government
expected" and was costing much more.
"They thought they were going to walk in, everybody would say
thank you, and they would set up a democratic government and leave.
Now that this war is lasting so much longer, they constantly have
to adapt their budget," he said.
"It rose from US$50 billion to US$250 billion. Today, the
Congressional Budget Office talks about US$500 billion or more for
this adventure," he said.
The budgetary costs are "but a fraction of the costs" to the
economy as a whole. "And compare this to Gulf War number one, where
America almost made a profit."
The Bush administration has not achieved the objective of
decreasing the probability of a major terrorist attack on the US by
spending so much money.
"Instead, most people think the Iraq war has increased the
probability of an attack," he said. "However, it's difficult to put
this aspect into financial terms."
The economist believes that the Bush administration is hiding
other costs of the war. "The official figures are only the tip of
an enormous iceberg."
"For instance, one of the costs of the war is that soldiers
today get very seriously injured but stay alive, and we can keep
them alive but at an enormous price," he said.
Around 17,000 veterans who are severely wounded -- roughly 20
percent with serious brain and head injuries -- returned home.
"For this group alone there will be a total cost of US$35
billion that nobody is talking about," he said.
"The only people benefiting in this war are Bush's friends in
the oil industry," he told the German magazine.
"He (Bush) has done the American economy and the global economy
an enormous disfavor, but his Texan friends couldn't be happier.
The price of oil is up, and they make money when the price of oil
goes up. Their profits are at record levels," he said.
(Xinhua News Agency April 6, 2006)
