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Private contracts drive Afghan economy

Steve Henn Nov 25, 2009

Private contracts drive Afghan economy

Steve Henn Nov 25, 2009


TESS VIGELAND: Next Tuesday President Barack Obama will give a nationally televised address to announce his decision on sending more troops to Afghanistan. Early word is that he will do so. A surge could ultimately mean more than 100,000 soldiers and Marines on the ground. But that’s just a fraction of the U.S. military commitment.

As Marketplace’s Steve Henn reports, private contractors outnumber U.S. troops in Afghanistan, and those contracts are now the driving force behind the Afghan economy.

Steve Henn: When you’re talk about private contractors in Afghanistan, the first thing you need to do is wrap your head around the scale.

Todd Harrison: At this point, we’re probably pushing closer to 100,000 contractors.

Todd Harrison is at the Center for Strategic and Budgetary Assessment.

Harrison: If the administration makes a decision to add more troops to Afghanistan, we would see that number rise dramatically.

Harrison says the Pentagon doesn’t track exactly how much all this contracting costs, but it’s a big chunk of the total war bill. And the Afghan war could soon cost $100 billion a year.

Harrison: Somewhere around maybe half of that could be attributed to expenses that are going out to contractors and the services that they provide.

Military contracting is driving the Afghan economy. Just one trucking contract this year will soon account for 5 percent of Afghanistan’s Gross Domestic Product, and the military directed that business to Afghan companies.

Aram Roston: They figure injecting that money into the local economy will help. It’s part of the doctrine of counterinsurgency.

Aram Roston recently covered the trucking contract for The Nation. He says Afghan trucking companies sub-contract their own security to other Afghan firms.

Roston: The security companies tell me they are simply not able to physically protect the convoys.

So instead, they cut deals with local war lords, including the Taliban.

Roston: They pay them a fee per truck to allow those trucks through.

And Roston believes these bribes make up a significant portion of the Taliban’s war budget.

In Washington, I’m Steve Henn for Marketplace.

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