13.1 |
Resources
this
balance. An additional approach would be to write round Whitehall
colleagues
sharing
your concerns (for instance, about the economic and financing
implications
of foreign
and defence policy decisions).”
258.
A paper by
Treasury officials identified three “pitfalls” to putting Iraq “on
a path to
stability
and prosperity whilst fairly sharing the financing burden for
this”.157
Those
pitfalls
were:
•
UN cover.
Without this, the UK would have to contribute more to
the
reconstruction
effort, IFIs would find it hard to engage, and the
international
community
would be unable to resolve crucial financing issues such as
debt
rescheduling.
•
Being
realistic about the decisions a transitional Iraqi Government could
take.
It could be
illegitimate and destabilising for the transitional Government to
take
decisions
on Iraqi economic policy.
•
The
implications of establishing administrative sectors in Iraq: “If
the UK takes
on one, the
cost – in terms of money and administrative burden – could
rocket,
and our
stay lengthen.”
259.
A paper by
Mr Dodds and a junior Treasury official provided the
first
comprehensive
estimate of the cost of the UK’s intervention in Iraq (including
military
and
non‑military, conflict and post‑conflict costs).158
The advice
on military costs is
described
earlier in this Section.
260.
The officials
advised that the best estimate of the cost of military (combat
and
post‑conflict)
operations was now more than £5bn. In addition:
•
The UK
might spend between £100m and £250m on humanitarian aid in the
first
year after
any conflict (based on a “typical” UK contribution of 10 percent of
total
international
aid).
•
The UK
might spend between £100m and £500m on reconstruction in the
first
year after
any conflict (again, based on 10 percent of total international
aid).
•
It was
impossible to estimate costs falling to the Export Credit
Guarantee
Department
(ECGD), including through claims or losses arising from
political
and
economic instability, and from any decisions to write off debt for
political
reasons.
•
Mr Boateng
had already agreed to provide an additional £5m to the FCO
from
the Reserve
for a “flat‑pack” Embassy. There might be other costs, though
the
Treasury
was pressing the FCO to absorb those within its
budget.
157
Minute
Treasury [junior official] to Chancellor, 19 February 2003, ‘Update
on Iraq’ attaching Paper
Treasury, 19
February 2003, ‘Iraqi reconstruction: pitfalls and
process’.
158
Minute
Treasury [junior official] to Chancellor, 19 February 2003, ‘Update
on Iraq’ attaching Paper
Treasury,
19 February 2003, ‘Iraq Conflict – Public Expenditure
Impact’.
485