Something to Fear: Fear Itself

Times Staff Writer

Because of the war that may happen tomorrow -- or in two weeks or six weeks or, then again, not at all -- Joan McCullers has spent months deciding whether to fly from Virginia to Reno to see her sister. Richard Heckmann has put expansion of his Los Angeles-based sporting goods business on the back burner. Gail Devers, the two-time Olympic gold medalist, has warned that she may not travel from Atlanta to England for this month's world indoor track championships.

Sony Computer Entertainment in Tokyo has canceled the free trips it was offering as a PlayStation 2 prize promotion. Hiring has been frozen at Walt Disney World in Orlando, Fla. NBC has delayed production on "Around the World in 80 Dates," a global "reality" series, and 20th Century Fox has postponed its new "Mad Max" sequel, which was to have been shot in Namibia, until autumn. In Hong Kong, an elementary school with a big American enrollment has called off the fifth-grade class trip to mainland China. In Tehran, Farnoosh Salehi is giving his daughter gold coins rather than an apartment as her wedding present, on the hunch that as violence rises in the vicinity of his country, the price of real estate will dramatically fall.

In actions large and little, local and global, the world's bystanders are bracing for an imminent invasion of Iraq. Long months of debate and deadlines -- an extraordinary public run-up to possible armed conflict -- have put on hold lives and livelihoods worldwide in ways that are turning out to be as demoralizing in some respects as war itself.

"It's hard to find a historical analogy for what's been happening," said David M. Kennedy, a professor of history at Stanford University and author of "Freedom From Fear: The American People in Depression and War, 1929-1945."

"You'd look a long way to find a war that's had this much foreplay."

And this time, Kennedy notes, the conflict at hand affects a world shot through with connections. The impulse to hunker down has been triggered, not just in New York and Washington and Baghdad, but also in Tokyo supermarkets and San Francisco rug outlets. The Dodgers are skittish about going to Mexico City for exhibition games later this month. Tiger Woods says he may pass on this month's Dubai Desert Classic, never mind the loss of his standard $2-million overseas appearance fee.

Domestic packages have become the new hot travel item. "Alaska for this summer is really moving," reported Tama Taylor Holve, who heads a cooperative of 200 travel agents from her Studio City agency.

In a CBS/New York Times poll released Sunday, 55% of Americans said they wouldn't take a trip overseas in the next six months, even if they had the time and money. Asked why, 51% cited fear of terror, fear of war or fear that it has become unsafe for Americans to go abroad.

Not that they feel so secure at home either: In a Time/CNN poll, 56% of Americans said they expect more Al Qaeda attacks on U.S. soil if this country sends troops into Iraq. Meanwhile, the research firm Economy.com estimates that war fears are costing the U.S. economy 900,000 jobs and $75 billion in goods and services that might have been produced if concern over Iraq weren't depressing business investment and inflating oil prices.

"Peace is certainly the answer, but resolution, however we achieve it, is critical," said Steve Cochrane, senior economist at the Pennsylvania-based forecaster. "Having this hang over us with no end in sight could be worse for the economy than going to war."

In corporate America, for instance, merger activity has plunged. In the week ended Feb. 21, just 54 mergers were announced by U.S. companies, according to data-tracker Thomson Financial in Newark, N.J. That was the lowest weekly total since the holiday week ending Dec. 28, 2001, Thomson said. The number of merger deals so far this year is down 27% from last year.

"Things are just grinding to a halt," said Richard Peterson, Thomson's chief market strategist.

Investors are nervous. At City National Bank in Beverly Hills, which specializes in business lending and managing investments for wealthy individuals, "there is clearly an element of psychological caution" among borrowers and investors, said Chairman and Chief Executive Russell Goldsmith.

In tourism, demand for travel insurance, up since 9/11, has been soaring as the possibility of war has complicated personal and business travel. At Walt Disney World -- where hiring was frozen last month because of the economy and war fears -- executives say vacation bookings have softened and travelers who used to book months in advance are now booking only 14 to 30 days ahead.

The cancellation of Sony's PlayStation 2 prize trips deprived 410 winners of five-day vacations in Naples, Manchester, Heidelberg, Rome and San Diego. In Paris, visitor cancellations have so worried the government that the city's Office of Tourism has commissioned a study, and City Hall has urged hotels and travel agencies to cut their prices.

"People are a little frozen," said David Stempler, president of the Air Travelers Assn., a Washington-based organization representing business and leisure fliers.

Toni Neubauer, president of Myths & Mountains, an adventure travel agency near Lake Tahoe, says a choral group canceled a trip to Vietnam on the day government security warnings went to Code Orange.

"The parents just freaked," Neubauer said. "They were not afraid of danger in Vietnam. They were afraid something would happen here and that they'd be apart from their children."

Some carriers have suspended penalties for last-minute changes. Virgin Atlantic Airways last week said it would temporarily waive fees for passengers canceling or postponing bookings on flights between the U.S. and Great Britain, citing "uncertainty in the international travel marketplace."

Meanwhile, those who track international tourism predict an especially severe impact on the Middle East and North African destinations such as Tunisia, a popular low-budget vacation spot for Europeans.

"If there is a war, the thin hope of development that tourism represents for these countries will be annihilated," said George Lipman, special advisor at the World Tourism Organization in London and Brussels. Michael Crye, president of the International Council of Cruise Lines, says that cruise activity in the Middle East already has been curtailed, and a number of ships have been rerouted from the Suez Canal.

The major airlines have drawn up war contingency plans, such as flying around airspace in the Middle East on international routes. At United Airlines, officials confirm, the plan also includes new rounds of layoffs and budget cuts if war further deters travelers.

The uncertainty has ranged across economic sectors. The chief economist for the National Auto Dealers Assn. is predicting a 200,000-unit drop in light vehicle sales should war slam the stock market, chilling demand for luxury cars. Amgen Inc. of Thousand Oaks, the world's largest biotechnology company, has mapped out alternate shipping plans for the three drugs it markets in Europe. Ken King, an Ontario importer of gifts and candles, blames war fears, in part, for a 30% drop in business in February.

Tony and Sam Abrahim, Afghanistan-born twin brothers who sell imported rugs and furniture at 10 stores in San Francisco and Los Angeles, are planning to close two factories in Pakistan and shift production to China and other countries. Importing goods from Syria, Jordan, Egypt and Morocco has become maddening, they say, because containers from those countries now routinely stall upon arrival at U.S. Customs. "We don't want to import anymore from Arab countries," Tony Abrahim said.

Heckmann, whose Los Angeles-based company K2 Inc. manufactures Olin skis, Shakespeare fishing gear and other sports equipment in China, says he has put off his dream of becoming a Fortune 500 company. "It is hard to be in an expansionary frame of mind when you are waking up each morning wondering if New York is still there," he said.

The mood extends to businesses in other countries. Noel Forgeard, chief executive of Airbus, the premier European aircraft maker, has warned that 2003 may be "the year of all risks."

Sydney Chang, who operates a consulting firm in Shanghai, says several clients have indefinitely postponed trips to see him, and an organizer of international conferences whom he advises is losing attendees and guest speakers due to war fears.

In Japan, companies with operations in the Persian Gulf have scaled back employees and evacuated families. Other firms have fallen back on lessons from the last Persian Gulf War. Japan Dates Enterprise K.K., a food importer, has stocked up on six months' worth of imported dates from the region because they're a staple for the sauce used in okonomiyaki, a sort of Japanese pizza, and yakiniku, a popular grilled meat.

Figures in academia, culture and sports are similarly reaching for the "pause" button. European archeological digs in the gulf region have been suspended or threatened, even as international scholars warn that bombings in Iraq could destroy some of the earliest artifacts of humankind. The world's art collectors, fearing terrorism, are refusing to lend prized pieces to museums in theoretically risky cities such as New York, or are doing so only if the institutions purchase special costly insurance policies.

Japan's soccer federation cited the potential for war in canceling a two-match tour in the U.S. this month, and the Los Angeles Lakers didn't make their championship visit to the White House this winter, blaming geopolitical upheaval.

Tennis player Lindsay Davenport, refused to travel to the United Arab Emirates for the women's tournament there last week, and Jan-Michael Gambill withdrew from this week's men's competition.

But it is in the everyday grind, where so much of life happens, that the world is most poignantly waiting.

In Jerusalem, Israeli couples say they are postponing marriage. Rafael Dadoun, a 66-year-old retiree, said his brother is cutting short an overseas trip because he feels duty-bound to volunteer for the Israeli military in time for war.

In Mexico City, Pennsylvania-born Alonso Cerdan Verastegui has put off renewing his U.S. passport because he's 23 and afraid his dual citizenship could make him eligible for a draft. In Cairo, Najwa Hassanein, a 29-year-old Palestinian housewife with stomach problems, has delayed going to London to seek medical treatment because she is afraid that if there is a war, she'll be stuck abroad.

Then there's McCullers, 47, who in January told her sister in Reno that she was finally planning to visit. Within weeks, she says, the government had issued a Code Orange and she was calling back to say she had second thoughts.

"This war stuff, I don't know what the word for it is. Probably, I should be nice and say 'unfortunate,' " the Virginian said, sighing. "My sister has been in Reno for six years, and I've never seen her house and now this." McCullers flew to Nevada this week. "I only hope," she said, "I'm back home by the time war breaks out."

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This story was reported by Times staff writers in Los Angeles, San Francisco, Miami, Cairo, Jerusalem, Tokyo, Hong Kong, Shanghai, Paris, Tehran, Moscow and Mexico City. It was written by Hubler in San Francisco.

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