Thursday, September 27, 2007

Analysis: Outsourcing war is good business

The private armies employed by the United States as auxiliary forces in the war in Iraq have come under criticism following an incident that drew the ire of Iraq’s prime minister, who demanded their immediate withdrawal.

However, Prime Minister Nouri al-Maliki’s wishes are far removed from the economic realities of the war, at least as far as the Bush administration is concerned, and the prime minister’s edicts will carry little impact, if any.

If the deployment of tens of thousands of armed contract workers in Iraq may seem somewhat unethical given that they are held accountable to neither Iraqi nor U.S. laws, their involvement in the war is nevertheless a wise business decision that will save the U.S. taxpayer billions of dollars.

The most prominent of these private security firms is an outfit called Blackwater USA, which retains some 20,000 or so armed employees. Blackwater’s employees, most often former Special Forces personnel recruited from dozens of different countries, provide security to many U.S. agencies operating in Iraq, including the U.S. Embassy and U.S. diplomats stationed in Baghdad.

On Sept. 16 a Blackwater unit providing security for a convoy of U.S. diplomats traveling in Baghdad is alleged to have indiscriminately opened fire after coming under attack. The result left 11 Iraqis dead and 13 wounded, among them women and children. The incident prompted Maliki to demand that Blackwater curtail its operations in Iraq, a request that was ignored. Given the scope of Blackwater’s operations in Iraq, asking it to leave would affect most U.S. operations in the country. Not to mention the setbacks it would have on the war effort.

But why is the United States turning over part of the war effort to a civilian mercenary force? Given its size, Blackwater, one of several such companies operating in Iraq since the U.S. invasion in March 2003, constitutes the second-largest foreign force in Iraq after the U.S. military. It has its own military base and operates about 20 aircrafts, including armed helicopters.

Why? It’s a question of logistics and economy.

First, the tens of thousands of contractors who are assigned to guard buildings, installations, military bases and provide protection for U.S. officials allows the Pentagon to maintain a smaller force in the country, avoiding further taxing an overstretched military fighting two wars.

Financially, the Pentagon contracts with security firms, which in turn pay their employees. So where are the savings? Well, consider the healthcare costs alone attached to a returning veteran in need of medical attention over a lifetime. In that regard alone, privatizing part of the war carries a huge advantage as far as keeping costs down. Contract workers who are wounded in action are not the responsibility of the U.S. government.

In a March 2007 article in The New Statesman titled “Iraq: the Hidden Cost of the War,” Andrew Stephen quotes two economists who predict that several decades of care for the wounded veterans of the Iraq war will amount to $2.5 trillion, a figure the author says the Pentagon is trying to suppress.

Linda Bilmes, a Harvard professor and an economist who served in the Clinton administration, and Professor Joseph Stiglitz, a Nobel laureate economist from Columbia University, say Stephen has "established not only that the number of wounded in Iraq and Afghanistan is far higher than the Pentagon has been saying, but that looking after them alone could cost present and future U.S. taxpayers a sum they estimate to be $536 billion.”

Providing long-term care for just one soldier suffering from severe brain injury could end up costing a minimum of $4.3 million, according to the report. Since the start of the conflict, more than 1.4 million U.S. troops have been deployed in Iraq. According to The New Statesman, more than 200,000 veterans from the current Iraq or Afghanistan wars have been treated at VA centers since the start of the conflicts.

“Every person injured on active duty is going to be a long-term cost of the war,” Bilmes told The New Statesman. This of course does not apply to the private army contracted by the Pentagon.

With the cost of the war to the U.S. taxpayer draining approximately $200,000 every minute, according to the National Priorities Project, Washington will not find it difficult explaining to the Iraqi prime minister the need to go on with business as usual.