Middle East War Affects
Local Economies

By Zanetta Doyle, Digest Editor

Shortly before the Iraq war began, 41 percent of respondents to a survey by the National Association for Business Economics predicted that international military operations and homeland defense were the biggest problems facing the US economy. Post-war reports are backing that prediction.

The US Department of Labor revealed that US companies eliminated 108,000 jobs in March 2003, as increased concerns regarding the war and terrorism contributed to the decline in the manufacturing, restaurant and tourism industries. Construction employment edged upward, but most major industries showed little change according to the Department of Labor’s Bureau of Labor statistics.

Ray Stone of Stone & McCarthy Research Associates, a financial markets research firm commented that of the 262,000 jobs lost during the first three months of 2003, probably half of those might be attributed to the mobilization of National Guard and reservists, and much of the remaining loss can be attributed to industries affected by weather and the “broader geopolitical cloud.” According to the US Department of Defense, about 210,000 reservists had been called into active duty as of mid- March. However, recent reports indicate that consumer confidence rose slightly in April following the swift outcome of the Iraq war. The US Department of Commerce reported that despite war-related concerns, car sales and other spending rose 2.1 percent in March, which offset a weather-related drop in February.

The Rural Impact

The Iraq war is not the only defense-related situation impacting rural America. The new round of base realignment and closures (BRAC) slated for 2005 could have a significant economic impact on rural and small metropolitan communities, as many military bases, which provide substantial revenue are located in these areas. In Havelock, North Carolina, the Marine Corps Air Station Cherry Point military base contributes about $1 billion to the local economy according to Judy Hills, Interim Executive Director of the Eastern Carolina Council of Governments in New Bern, North Carolina. Another significant impact is that once reservists and other military personnel are called to active duty, it leaves vacant jobs and sometimes results in decreased business for local companies, especially in predominantly military towns.

War Unites North Carolina Communities

While the debate continues over whether or not the economy is improving, local business and community support has been vital to North Carolina’s ability to cope with the deployment of local military to the Middle East. Three of the largest bases in the state fall under the jurisdiction of the Eastern Carolina Council of Governments (COG) in New Bern, North Carolina – Marine Corps Air Station Cherry Point in Havelock, Marine Corps Camp Lejeune in Jacksonville and the Seymour Johnson Air Force Base in Goldsboro. Hills explained that the economy was already declining, but after the start of the war, local merchants and other city services have had to adjust as local reservists were deployed. “Many of the deployed personnel are volunteers,” said Hills. “Calling them out of their jobs has had a definite impact on certain areas, like emergency services.”

Tom Phillips, City Manager of Havelock echoed that sentiment, adding that the city had to pay more overtime to compensate for the volunteers lost due to deployment. “We suffer some, but we are confident that they will return and resume their duties,” said Phillips.

Phillips explained that Havelock, with a population of 22,000, (about eight to 10,000 of that number are residents of Cherry Point), saw a decline in real estate, automobile and furniture sales during the six months leading up to the deployment to Iraq. But businesses such as hardware, clothing and grocery stores did not experience significant declines. “The young servicemen that you would expect to buy the new cars and furniture were being deployed, so they were not making these purchases,” said Phillips. “Despite the deployment, their families didn’t pack up and leave as was the case in the first gulf war back in 1991. They continued to buy clothes and groceries. The economic impact has been minimal.” Emphasizing the minimal impact on their economy, he added that when tactical units leave, 50 troops may be deployed, but then 50 reservists are brought in, which balances out the loss.

Supporting Military Families

The state has united in many ways to support military families left behind. “There is a real community spirit as everyone has come together to support our troops,” said Hills. With support from North Carolina Governor Mike Easley, the state has developed a Web site, www.governor.state.nc.us/mil, that is dedicated to supporting service personnel and their families.

Some of the services and support offered through the site include donating telephone calling cards to soldiers and their families, providing financial aid to military families through official national military relief societies, donating groceries or adopting pets of deployed military personnel.

The Jacksonville-Onslow Chamber of Commerce in Jacksonville, North Carolina also assists military families through Project CARE (Community Action Readiness Effort). Originally developed in 1999 by representatives of the Jacksonville-Onslow Chamber of Commerce, the City of Jacksonville and Onslow County, the program was updated in 2002 to include provisions that would address the ongoing needs of the military community.

According to Mona Padrick, President of the Jacksonville- Onslow Chamber of Commerce, during the first Gulf war, 35 percent of military families left after loved ones were deployed, but during the current war in which 24,500 troops have been deployed thus far, only 10 percent have left. Padrick credits this reduction in part to the Project CARE program, which operates under three modules: Assistance to families of deployed military; assistance to businesses which may face challenges due to the loss of customers; and assistance for community/military needs on an ongoing basis. Sub-modules of the program include identifying what local agencies can do for families, assistance with childcare, and special military family appreciation days sponsored by local restaurants and other businesses. “Our goal is to meet the needs of the families without overlapping services already provided through the military bases,” said Padrick. “This program would not have worked with just the involvement of two or three businesses. This has really been a total community effort.”

The Havelock Chamber of Commerce also runs a Project CARE program geared toward helping military families in that area. In addition, the program, “Semper Fido,” started and developed by the Havelock Animal Control Officer, Terri Morgan, finds foster homes for pets left behind due to their owners’ deployment.

For more information contact:

Judy Hills at 252/638-3185 or email jhills@eccog.org;

Tom Phillips at 252/444-6400 or phillips@cityofhavelock.com;

Mona Padrick at 910/347-3141 or mpadrick@jacksonvilleonline.org;

Visit www.governor.state.nc.us/mil or www.jacksonvilleonline.org to find out more about Project CARE.

To find out more about the Havelock Chamber of Commerce’s Project CARE program, contact Karen Lewis at 252/447-0113 or email info@havelockchamber.net.

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