Europe South Asia Asia Pacific Americas Middle East Africa BBC Homepage World Service Education



Front Page

World

UK

UK Politics

Business

Sci/Tech

Health

Education

Sport

Entertainment

Talking Point

In Depth

On Air

Archive
Feedback
Low Graphics
Help

Wednesday, April 21, 1999 Published at 12:47 GMT 13:47 UK


Business: The Economy

The cost of conflict

US Army paratroopers add to the multi-million dollar bill of war

By BBC Economics Correspondent Ed Crooks

The true cost of any war is obviously reckoned, not in money, but in lives lost or ruined.

Kosovo: Special Report
And no one who has seen the terrible pictures from Kosovo or Macedonia could have any doubt that that is the grim truth of this latest conflict.


BBC News' Rory Cellan-Jones adds up the figures
But military power has always needed the support of economic and industrial power behind it and on today's high-tech battlefield, that is more true than ever.

High price of high-tech

Waging the modern kind of computerised, laser-guided war is a very expensive business. Of course, missiles and bombs have been paid for already, and only cost more when they are replaced.


[ image: Kosovan refugees: The human cost is immense too]
Kosovan refugees: The human cost is immense too
Fuel for the aircraft and the cost of the army would have to be paid anyway, even if they were only training, not in action.

But still, the additional cost of deploying British forces has been estimated at 2m a day. And Britain is contributing only about a twentieth of the total NATO effort.

NATO's commitment is rising, too. The force deployed is building up to three times the size of the initial number of aircraft and ships involved.

If NATO were to send ground forces into Kosovo, then the cost would rise sharply, and Britain's share of the burden would probably be proportionately much higher too.


[ image:  ]
But though these figures may sound enormous, it is important to keep them in perspective. The Falklands war, for example, cost the equivalent in today's money of about 2.5bn. That is just 1% of total government spending.

The Chancellor of the Exchequer Gordon Brown has, despite all his talk about prudence, put rather less aside for emergencies than his predecessors.

The emergency reserve and the margin for error in this year's spending plans add up to just over 2bn.

Picking up the tab

But even so, the costs of the war should not mean higher taxes. Wars are, we all hope, relatively rare events: it should be perfectly acceptable for the government to borrow a bit more to cover the cost of fighting.


[ image:  ]
But in the long run, the real cost of the war will not be fighting it, but the reconstruction afterwards. A cruise missile costing 835,000 could do a hundred million pounds worth of damage to a factory or refinery.

The damage done to homes and other property in Kosovo by the Serbs has already been estimated at 2bn.

The West will almost certainly have to pick up the bill once the war is over. If the Kosovar refugees are to return to their homes, they have to have homes to go back to.

Any peace settlement may well also have to include making good the damage done by NATO - just as the Allies used the Marshall Plan to rebuild Europe after World War II.

If Slobodan Milosevic is deposed, aid from the West would probably be offered to reconstruct the Yugoslavian economy and cement any peace deal.

The cost of knocking Yugoslavia down may be substantial. The cost of building it back up again will probably be much higher.



Advanced options | Search tips




Back to top | BBC News Home | BBC Homepage |


The Economy Contents

Internet Links


Jane's Directories

Ministry of Defence News on Kosovo crisis

NATO


The BBC is not responsible for the content of external internet sites.




In this section

Inquiry into energy provider loyalty

Brown considers IMF job

Chinese imports boost US trade gap

No longer Liffe as we know it

The growing threat of internet fraud

House passes US budget

Online share dealing triples

Rate fears as sales soar

Brown's bulging war-chest

Oil reaches nine-year high

UK unemployment falls again

Trade talks deadlocked

US inflation still subdued

Insolvent firms to get breathing space

Bank considered bigger rate rise

UK pay rising 'too fast'

Utilities face tough regulation

CBI's new chief named

US stocks hit highs after rate rise

US Fed raises rates

UK inflation creeps up

Row over the national shopping basket

Military airspace to be cut

TUC warns against following US

World growth accelerates

Union merger put in doubt

Japan's tentative economic recovery

EU fraud costs millions

CBI choice 'could wreck industrial relations'

WTO hails China deal

US business eyes Chinese market

Red tape task force

Websites and widgets

Guru predicts web surge

Malaysia's economy: The Sinatra Principle

Shell secures Iranian oil deal

Irish boom draws the Welsh

China deal to boost economy

US dream scenario continues

Japan's billion dollar spending spree