Summary of the Consequences of a War:

Humanitarian disaster and the rebuilding of Iraq. The time has come for the developed countries to help Iraq recover from the vast humanitarian disaster that has befallen the Iraqi population. A country totally destroyed by the effects of the war must be added to the enormous loss of innocent human lives.

The costs of the War: Now the question arises of who will cover the costs of the war. The US is incurring in considerable expense (more than 100.000 million dollars) that it will try in some way to recover. It seems that both the World Bank and the IMF (International Monetary Fund) are ready to assist in the rebuilding of Iraq, although it is clear that the US will try and encourage more countries to participate in the costs of the war.

Trading in Iraq. The rebuilding of the country will represent profitable business for the companies of those countries that participate. The Spanish government is convinced that as a result of its part in the war, Spain will have the third largest empresarial participation in rebuilding Iraq.

Country relations. This war has caused a deep rift between the United States and some of the members of the seven most powerful countries, such as Germany and France. This may prove negative for good will to co-operate in the economy, which will in turn have a negative effect on the financial markets.

Electoral Consequences. It will be interesting to find out the general opinion of the Spanish citizens regarding the support of the government in this controversial war. Next 25th May in the electoral results we will be able to see the consequences of this decision for the present government.

The Oil Industry. Many are of the opinion that the ultimate interest of the US is the oil industry and that US will recover the costs of the war through the Iraqi oil industry. The quotation for the barrel of oil around the 10th April was 24 dollars.

Tourism. With respect to the Canary Islands, the occupation of Iraq is currently proving to be beneficial, reason being that changes of holiday destinies from other places are taking place. Nevertheless, the Balearic Islands does not share the same recovery as the Canaries and bookings are generally down on last year. Regarding summer bookings it is still too soon to form an opinion. The date of the end of the war in Iraq is considered as decisive in this matter as it seems that travellers do not yet want to make reservations in advance for “psychological reasons”. The world tourism market is currently going through a significant decrease in demand that could seriously affect the results of the hotel, transport and tour-operator industries this season. In Spain, hotel reservations are down by 10 to 20%. Hotel accommodations have suffered a decrease in occupation of between 10% and 15% and on the Balearic Islands up to 25%. Not all of this can be attributed to the war in Iraq or to the feared Asiatic illnesses. The economic deceleration in Europe was already affecting the influx of British, German and French tourism into Spain. Our tourism market is starting to feel the sound competition of other destinies in the Mediterranean, Central or Western Europe (Croatia, Macedonia, Bulgaria) with better quality related prices compared with the Spanish services and facilities.

The Canaries has this month just approved a law in Parliament that will forbid the granting of new licences for tourist installations during a term of three years.

Spanish tourism services require extensive improvements including the correct formation of professionals, the renovation of hotel accommodation, investment in infrastructure, the promotion of cultural tourism, etc.

Deceleration in Economy. The European Commission has lowered its growth prospect for the Euro sector (for all countries of the EEC except Sweden, Denmark and United Kingdom) in 2003, to 1%