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Issue 635 Articles:

Cock 'n' Kabul Story

No Bush Over

Bonehead Loonstomp

Hole in the Budget?

Pent Up Anger

Ray of Light

Party & Protest

Supremely Indifferent

And Finally


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Home | Friday 13th June 2008 | Issue 635

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This week the 100th soldier was killed since (illegal) British operations began in Afghanistan more than six years ago.”They have paid the ultimate price” said Gordon Brown, “but they have achieved something of lasting value.” Shareholder value that is - with most of the ‘aid’ / reconstruction cash going to a small number of corporate contractors for overpriced and shoddy work.

It’s considered legitimate for a corporation to make huge profits if its prepared to invest in a warzone. Its all about ‘rewarding risk’ and entrepreneurial prowess – War is an attractive proposition for right-wing money men and ex-army / militia thug types. £8bn in reconstruction money (almost all of it from the U.S) has been spent so far and, on average, each contract awarded to the private sector costs four times more than if it was run by the Afghan government. It costs, for example, £6,000 to build a classroom under a government run contract - but US corporations are building the same schools with the same sub contractors for more than 25 grand a piece. Half of all aid is actually spent outside of the country. At the same time the average resident of Kabul will be lucky to get more than six hours of electricity a day.

Most of the loot is being sucked up by reconstruction which runs over-budget. And since there’s no one’s checking the cashflow that comes as hardly a surprise. On average international ‘donors’ are spending three quarters of their ‘aid’ on privately run projects with no government oversight. Although the State Department does not gather the statistics because (says a spokesman) the figures are “not important to us” – it is estimated that only 3% of US aid is given to the Afghan government. The rest goes to the corporations that are so closely tied to (and sponsor) the Bush administration.

It was never the invading powers’ intention for their governments to pay for the reconstruction themselves - they’d be leaving that to the US and UK taxpayers. Using their leverage and influence to snap up lucrative investments and non-exec positions with the same companies bankrolling the political class help them all pick up this bountiful tax income through reconstruction, security and ‘advice’ contracts. Any shares in the corporations that win contracts can be packaged in a variety of ‘financial instruments’ (e.g. offshore trust funds) so the voter need never know that their political representative is making a fortune.

And if you’re vice President and former Chief Executive Officer of Halliburton, like Dick Cheney, then you can simply operate under a subsidiary name - Kellogg, Brown and Root (KBR) in this case. And what a nice little earner that’s turning out to be. KBR picked up a £50 million contract from the State Department back in 2002 to build a new embassy in Kabul. The company has since been awarded further contracts worth £115 million. Mindful of all the bad PR, Cheney left Halliburton in August 2000, promising to sever all financial ties to the company. A few stock options later and Dick was £20 million better off. But he still pockets anything between £100,000 and £1/2 million each year in ‘deferred compensation’ showing that he continues to profit from the war he made the decision to wage.

Afghanistan’s Rebuilding Agricultural Markets Program has been bankrolled by USAID (the government agency awarding contracts), with more than £25 million a year going to Chemonics International to persuade Afghanis to adopt the more profitable western approach to growing food. Chemonics is the the knowledge economy game where it receives hefty fees to ‘advise’ governments. Ninety percent of its cash comes through USAID - where its controlling owner, Scott Spangler, used to work as director under papa Bush.

The Price is Right

To help make the loot flow in the right direction, between 1990 and 2003 the Spangler family gave the republican party £50,000 – and now they want to see a return for their investment. Despite Chemonics best efforts a country once more than self sufficient in food now sees half the population go hungry.

Another option is to obtain a valuable contract – in security for example – and sub contract it out to the locals for a nice fee. Private security firm, United States Protection and Investigations, charges £2,500 a month for a security team of six. But when western security forces charge more than £1,000 a day, its so much cheaper to pay an Afghani security worker who only commands £60 a month. With six employees costing just £360 – 80% of the money is straight profit. In fact even the World Bank director in Kabul, Jean Mazurelle, estimates that 35 to 40 percent of all international aid sent to Afghanistan is “badly spent.”

The consequences of inaction on locally-led development are clear. While Brown talks of an ‘historic mission’, Afghanis are wondering where all the promised assistance has gone. Corruption in government and blatant profiteering by western corporations is only serving to alienate a population which then turns against those responsible for the abuses – be they warlords, government officials or the international forces that support them.

For more info on the recent rise of private military companies, check out Jeremy Scahill

* More than one in five of the 100 soldiers killed since November 2001 were not caused by enemy fire – but accidents. The statistics are a little skewed when the crash of an aging Nimrod spy plane killed all 14 crew. Nevertheless of the 201 British soldiers killed in Iraq and Afghanistan more than 80 died because of accidents. Oops.



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