Isle economists cite war’s
intensity as key factor

A state panel is told the isles could
avoid disruption if an Iraq
conflict ends quickly

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By Diana Leone
dleone@starbulletin.com

Both the Gulf War in 1991 and the terrorist attack of Sept. 11, 2001, may foreshadow how war against Iraq could affect Hawaii, said two economists addressing state Select Committee on War Preparedness yesterday.

But by no means can one really predict what will happen to the economy because there are so many unknowns, said Paul Brewbaker, chief economist for the Bank of Hawaii, and Carl Bonham, a University of Hawaii professor.

The 10-member panel, appointed by House Speaker Calvin Say last week, held its first meeting yesterday and plans to meet at 4:30 p.m. each Tuesday in the state Capitol until further notice.

"If war happens, this committee plans to have a plan, a process complete" that will help Hawaii cope with its effects on public safety, jobs and energy supplies, said committee member Robert Alm, Hawaiian Electric Co. senior vice president.

Legislative members said if the committee's work reveals any need for changes in state law, they will remain poised to introduce them.

State Adjutant General Robert Lee said he wants to "reassure the public" that the military is well-prepared and that state, federal and local agencies are working with it "to be sure we've taken full measures for protection of critical infrastructure."

Though a war would certainly have an effect, Hawaii's economy is at a better stage of a six-year economic cycle than it was when the Gulf War happened in 1991, Brewbaker said. As a result, it might rebound more easily.

But a lot has to do with not just if there's a war, but how it goes, Bonham told the panel.

In a "best case scenario" the U.S. would have a short military engagement, quickly liberate the Iraqi people, receive no further terrorist attacks and see oil prices fall after the war's conclusion, Bonham said.

In a prolonged conflict, there could be urban warfare with Iraq's Republican Guard, attacks on Israel, the use of weapons of mass destruction, damage to Iraqi and Kuwaiti oil fields and a critical world opinion of the U.S.

"While the final outcome of a war with Iraq is certain, the path followed to reach that outcome is uncertain," Bonham said. "That means we can't simply take a template from past events and apply it to this event."

Brewbaker recommended that Hawaii "be prepared for the worst," while at the same time being "prepared to backpedal" if things don't turn out so bad.