Special report: Iran Nuclear Crisis

    BERLIN, April 5 (Xinhua) -- Sanctions on Iran and its oil exports would cause "an enormous disruption" to the world economy, an American Nobel prize winner in economics said on Wednesday.

    If the UN Security Council voted for sanctions against Iran, "it would mean an enormous disruption as oil prices might rise to over 100 U.S. dollars (per barrel)," said Joseph Stiglitz, who won the Nobel Prize in 2001.

    He made the remarks in an interview with the German news magazine Der Spiegel.

    "You can increase the price from 25 to 40 dollars, and people can absorb it. If the price rises above 60 dollars, they become unhappy. They start to adjust, they move to smaller cars, drive a little bit less," Stiglitz told the magazine.

    "At 100 or 120 dollars, there are major changes in lifestyle. The sales of cars will plummet. Poor people will be facing real problems of heat versus food," he added.

    Talking about the war in Iraq, the economist said the war was "much more difficult than President Bush and his government expected" and was costing much more.

    "They thought they were going to walk in, everybody would say thank you, and they would set up a democratic government and leave. Now that this war is lasting so much longer, they constantly have to adapt their budget," he said.

    "It rose from 50 billion to 250 billion dollars. Today, the Congressional Budget Office talks about 500 billion dollars or more for this adventure," he said

    The budgetary costs are "but a fraction of the costs" to the economy as a whole. "And compare this to Gulf War number one, where America almost made a profit."

    The Bush administration has not achieved the objective of decreasing the probability of a major terrorist attack on the U.S. by spending so much money.

    "Instead, most people think the Iraq war has increased the probability of an attack," he said. "However, it's difficult to put this aspect into financial terms."

    The economist believes that the Bush administration is hiding other costs of the war. "The official figures are only the tip of an enormous iceberg."

    "For instance, one of the costs of the war is that soldiers today get very seriously injured but stay alive, and we can keep them alive but at an enormous price," he said.

    Around 17,000 veterans who are severely wounded -- roughly 20 percent with serious brain and head injuries -- returned home.

    "For this group alone there will be a total cost of 35 billion U.S. dollars that nobody is talking about," he said.

    "The only people benefiting in this war are Bush's friends in the oil industry," he told the German magazine.

    "He (Bush) has done the American economy and the global economy an enormous disfavor, but his Texan friends couldn't be happier. The price of oil is up, and they make money when the price of oil goes up. Their profits are at record levels," he said. Enditem