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America’s war economy

 

By Imtiaz Gul

Express Tribune, Mar 31, 2011

Wastage, pilferage, appropriation and criminalisation of development and reconstruction are some of the unintended but almost certain consequences of conflict. What emerges out of this de facto war economy is a number of non-governmental vested interests, i.e. security contractors, supplies, cargo contractors and officials who directly deal with and eventually benefit from this interplay of interests. For example, according to a report of the Strategic Forum,US National Defence University (NDU), Washington (October 2010), in Iraq and Afghanistan, the use of contractors reached a level unprecedented in US military operations. As of March 31, 2010, the United States deployed 175,000 troops and 207,000 contractors in war zones. Contractors represented 50 per cent of the Department of Defense workforce in Iraq and 59 per cent in Afghanistan. The ratio of one contractor to 55 military personnel in Vietnam grew to 1:1 in Iraq and 1.43:1 in Afghanistan.

The well-known American website The Nation counted about 225,000 contractors still actively serving almost the same number of US troops in Iraq and Afghanistan late last year. It said Pentagon’s Special Operations’ budget for these operations was merely $3 billion in 2003, but it more than tripled in 2010 to over $10 billion. The transportation of the containers carrying food, fuel and defence hardware from Karachi and Central Asia to various points inside Afghanistan alone exceeds $4 billion a year.

This war economy has given birth, for instance in Afghanistan, to more than a hundred dozen security and logistics, some representing US and Europe-based firms, and many local ones set up by influential families (Karzai, Pir Gilani, and defence minister Raheem Wardak).

Last year, the Karzai government, alarmed by possible links between some security and logistics companies to the Taliban insurgents as well as reports of tax evasions, also moved and cancelled licences of several companies. The government had also slapped a ban on NGOs, barring them from directly recruiting security guards for development projects.

As the scrutiny of some of these agencies still goes on, US officials, particularly representatives of some powerful business groups with their fingers in many businesses, wail that the consequences of the ban on development firms employing private guards “will be catastrophic,” as was said by one US official involved in the issue. “If these projects grind to a halt, we might as well go home. They are essential to the counterinsurgency strategy.” Based on estimates given out by some US officials, one could conclude that the private security business alone involved a business worth over one billion dollars a year.

The NDU report says that the contracting system — supplies, security, construction, infrastructure projects — stood at around $13.5 billion in 2010. Contractors can import goods for allied forces duty-free. The biggest contractor being investigated so far, according to Afghan officials, is Supreme Group, a multinational with headquarters in Amsterdam, that provides fuel and food and runs dining facilities at many coalition bases.

Writing in counterpunch.org in May 2009 Patrick Cockburn said: “The high expenditure on paying, protecting and accommodating western aid officials in palatial style helps to explain why Afghanistan ranks 174th out of 178th on a UN ranking of countries’ wealth. This is despite a vigorous international aid effort, with the US alone spending $31bn since 2002 up to the end of last year.” The high degree of wastage of aid money in Afghanistan has long been an open secret. In 2006, Jean Mazurelle, the then country director of the World Bank, calculated that between 35 per cent and 40 per cent of aid was “badly spent”. “The wastage of aid is sky-high,” he said. “There is real looting going on, mainly by private enterprises. It is a scandal.”

In another article in December of last year, and on the same website, he wrote: “Big contracts are given to large US companies that are used to a complicated bidding process, can produce appropriate paperwork and are well-connected in Washington.” This war economy indirectly funds the militancy as well. Hundreds of millions of dollars go to the Taliban coffers in return for safe passage of cargo containers as well as protection of communication installations across the country. Who would be interested in ending this conflict then?

The writer heads the Centre for Research and Security Studies, Islamabad

Email: imtiaz@crss.pk