Originally created 09/18/02

Economy unlikely to suffer in Iraqi war



CHARLESTON, S.C. -- If war erupts with Iraq, the recovering U.S. economy likely won't suffer much, a leading economist told business leaders from the Southeast and Japan on Tuesday.

"If we were to go to war with Iraq, my own personal belief is the war would be incredibly short, perhaps a few hours," said Mark Vitner, vice president and chief economist for Wachovia Corp., the nation's fourth-largest bank.

Vitner spoke during the annual meeting of the Southeast U.S.A./Japan Association attended by about 660 business and government leaders from Japan and seven Southeastern states.

"You just have to think about the gains our military has made in the last 10 years while the Iraqi military has degenerated over the last 10 years," Vitner said during the closing day of the four-day conference.

"I think that the war would be very, very short. The last war, it was the worry up until the war that hurt the economy," Vitner said. When the Gulf War began, oil prices fell and the stock market soared, he added.

"I don't think that war with Iraq is a huge threat to our economy, although the lead-up to a war is already exerting a bit of influence on the economy in that it's hurting the airline business and it's hurting the hotel business," Vitner said.

Vitner, who was on the first floor of the World Trade Center when the terrorists struck last year, said the nation's economy also is better able to withstand another attack although "I'm not sure that another terrorist attack is inevitable."

Immediately after the Trade Center attack, economists made predictions about what might happen, "but we didn't really didn't know what the reaction was going to be because it was so unprecedented."

If there were to be another attack, "I think the economy would hold up better than it did the first time because people saw how well the economy withstood the shock."

Vitner said the nation emerged from recession earlier this year and, even during the downturn, the Southeast fared better than most areas.

"If you took the Southeast and made a separate nation - as some fellas down here in Charleston tried to do a while ago - if it was a separate country, it would be the fourth-largest economy in the world," he said. "Since 1980, the Southeast outgrew every other industrialized nation in the world."