War in Iraq, no help for US equities (page 1 of 3)
- Monday, April 14 - 2003 at 12:02
What will be the repercussions of the Iraq war for equities? Will the problems of the US economy now catch up with valuations? Before the allied forces began their attack on Iraq, stocks around the world began to rally sharply, as a quick resolution of the conflict was expected.
However, as one might expect, lacking any knowledge of history, these American strategists overlooked that, no matter how vicious a leader is, the invasion of a sovereign territory by a foreign force will always rally people around their leader and stiffen the resistance.
In fact, since the protagonists for the war against Saddam Hussein have repeatedly compared his viciousness to Stalin, they should have known how badly Hitler miscalculated when he attacked Russia in the belief that the Russian population would receive his troupes with open arms and support his 'liberation' of Russia from the yoke of Stalin - one of history's most ruthless leaders.
But, to the contrary, Hitler's attack led to one of the fiercest resistances in military history and the defeat of the invading German Wehrmacht, which really turned around the Second World War in favor of the allied forces. To be sure, I did not expect a repetition of the German defeat at Stalingrad in 1943 to occur in Baghdad, since the coalition forces had such an overwhelming military superiority.
However, as we now know from the looting and chaos, which followed the capture of Baghdad and other Iraqi cities, the problem may have been less the removal of Saddam Hussein than the maintenance of peace and order in future since for all practical purposes Iraq is now without any governmental authority at all.
Having spent some time in the Middle East, I am convinced that the Arabs will never tolerate an occupation by any foreign power for long and, therefore, I believe that the victory of the coalition forces in Iraq will be followed by a nasty, messy and factional guerilla war, which will drag on for a very long time and in the course mortally bleed the coalition and peacekeeping forces.
I remember well how I met a French member of the Foreign Legion in the 1960s on the Island of Corsica. He had fought in 1954 at Dien Bien Phu in Vietnam, and served during the Algerian uprising prior to Algeria gaining independence in 1962. According to him, his regiment was relieved when they left Vietnam and every legionnaire was looking forward to be stationed in Algeria, which they thought would be like a paradise when compared to the tough campaign and eventual hellish defeat they had experienced in Vietnam. But, this proofed to be an illusion.
He said the Algerian war turned out to be far worse than Vietnam, because the French troupes in Algeria never knew who was friend or enemy and, therefore, incurred tremendous casualties in continuously recurring ambushes, acts of sabotage, and raids on their camps.
In Iraq, there will be another complication since the country is composed of so many different ethnic groups who will all wish to gain some immediate economic and political advantages from Saddam Hussein's demise.
Moreover, it is likely that the Syrians, the Turks and the Iranians will in time also meddle in the affairs of their Iraqi neighbor, which is likely to bring turmoil to the region for a long time to come.
In short, while the coalition forces are sure to eventually win the battle for Iraq and to get rid of Saddam Hussein and his clan who may still put up some resistance at Tikrit, such a victory may not bring the expected stability and peace to Iraq and the Middle East, but lead to a series of unintended consequences, such as the possibility of an independent Kurdistan in the north of the country and guerilla warfare against the occupation forces of the coalition.
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Dr Marc Faber



