Economic consequences of the Iraq‐Iran war

The Iraq-Iran war which has been going on for nearly six years will perhaps go down in history as one of the costliest conflicts in this century. It is estimated that the first five years of the fighting may have resulted in a toll of war dead approaching one million.' The economic cost of the conflict which may have already exceeded $500 billion is also staggering in terms of its impact on and implications for the economies of the two nations. Following a brief survey of economic conditions prior to the war in both countries, this essay will attempt to deal with three separate but interrelated issues: first, the effects of the war on the Iraqi and Iranian economies, second, the impact of the war on, and the role of Saudi Arabia in, the changing relative positions of Iraq, Iran and Saudi Arabia itself in the international oil market and third, an assessment of the prospects for economic development in the post-war period.