Making a killing: how private armies became a $120bn global industry

The Independent: In Nigeria, corporate commandos exchange fire with local rebels attacking an oil platform. In Afghanistan, private bodyguards help to foil yet another assassination attempt on President Hamid Karzai. In Colombia, a contracted pilot comes under fire from guerrillas while spraying coca fields with pesticides. On the border between Iraq and Iran, privately owned Apache helicopters deliver US special forces to a covert operation.This is a snapshot of a working day in the burgeoning world of private military companies, arguably the fastest-growing industry in the global economy. The sector is now worth up to $120bn annually with operations in at least 50 countries, according to Peter Singer, a security analyst with the Brookings Institution in Washington.

“The rate of growth in the security industry has been phenomenal,” says Deborah Avant, a professor of political science at UCLA. The single largest spur to this boom is the conflict in Iraq.

The workings of this industry have come under intense scrutiny this week in the angry aftermath of the killing of Iraqi civilians by the US-owned Blackwater corporation in Baghdad. The Iraqi government has demanded the North Carolina-based company is withdrawn. But with Blackwater responsible for the protection of hundreds of senior US and Iraqi officials, from the US ambassador to visiting congressional delegations, there is certainty in diplomatic and military circles that this will not happen.

The origins of these shadow armies trace back to the early 1990s and the end of the Cold War, Bob Ayers, a security expert with Chatham House in London, explains: “In the good old days of the Cold War there were two superpowers who kept a lid on everything in their respective parts of the world.”

He likens the collapse of the Soviet Union to “taking the lid off a pressure cooker”. What we have seen since, he says, is the rise of international dissident groups, ultranationalists and multiple threats to global security.

The new era also saw a significant reduction in the size of the standing armies, at the same time as a rise in global insecurity which increased both the availability of military expertise and the demand for it. It was a business opportunity that could not be ignored.

Now the mercenary trade comes with its own business jargon. Guns for hire come under the umbrella term of privatised military firms, with their own acronym PMFs. The industry itself has done everything it can to shed the “mercenary” tag and most companies avoid the term “military” in preference for “security”. “The term mercenary is not accurate,” says Mr Ayers, who argues that military personnel in defensive roles should be distinguished from soldiers of fortune.

There is nothing new about soldiers for hire, the private companies simply represent the trade in a new form. “Organised as business entities and structured along corporate lines, they mark the corporate evolution of the mercenary trade,” according to Mr Singer, who was among the first to plot the worldwide explosion in the use of private military firms.

In many ways it mirrors broader trends in the world economy as countries switch from manufacturing to services and outsource functions once thought to be the preserve of the state. Iraq has become a testing ground for this burgeoning industry, creating staggering financial opportunities and equally immense ethical dilemmas.

None of the estimated 48,000 private military operatives in Iraq has been convicted of a crime and no one knows how many Iraqis have been killed by private military forces, because the US does not keep records.

According to some estimates, more than 800 private military employees have been killed in the war so far, and as many as 3,300 wounded.

These numbers are greater than the losses suffered by any single US army division and larger than the casualties suffered by the rest of the coalition put together.

A high-ranking US military commander in Iraq said: “These guys run loose in this country and do stupid stuff. There’s no authority over them, so you can’t come down on them hard when they escalate force. They shoot people.”

In Abu Ghraib, all of the translators and up to half of the interrogators were reportedly private contractors.

Private soldiers are involved in all stages of war, from training and war-gaming before the invasion to delivering supplies. Camp Doha in Kuwait, the launch-pad for the invasion, was built by private contractors.

It is not just the military that has turned to the private sector, humanitarian agencies are dependent on PMFs in almost every war zone from Bosnia to the Democratic Republic of Congo. Which raises the next market the industry would like to see opened: peacekeeping. And the lobbying has already begun.