Illustration by Edel Rodriguez for FP

A popular current joke is that the national bird of economic development is the crane. It is also the national bird of many of the countries in the Arab world that opposed the invasion of Iraq and condemn it still. Yet the truth is that those countries have benefited hugely from the invasion, at least in economic terms. Go to Dubai, Qatar, or any of the city-states of the gulf and the thing that most catches the eye is the amount of construction going on: gleaming skyscrapers, holiday resorts, opulent apartment buildings, desalination plants, and more. The reason for that massive buildup is that the gulf states are enjoying an economic boom. Why? Because George W. Bush invaded Iraq.

Many reasons are cited for why oil prices reached a peak of nearly $80 a barrel in July 2006: strong demand in China, India, and other emerging markets; low investment during the previous two decades in new oil reserves and refining capacity; supply disruptions in other oil-producing countries such as Nigeria; fear of terrorist attacks on oil pipelines and other infrastructure, especially in Saudi Arabia. None is untrue, but even all these reasons together do not amount to a convincing case for why the price rose so sharply. The missing piece of the puzzle is the invasion of Iraq.

Just prior to the invasion, oil cost about $30 a barrel. During the subsequent three years, the price more than doubled. Arab stock markets boomed on the back of that, helped too by the surge of reconstruction spending in Iraq and associated money flowing into the region....