Joshua FoustBack to OpinionJoshua Foust

The looming Afghan crash

An Afghan boy looks through the door of a tea shop Tuesday where he works in Kabul, Afghanistan. Photo: AP/Musadeq Sadeq

One way or another, the war in Afghanistan will eventually wind down. On Tuesday, the Washington Post announced that the Obama administration is seeking to “speed up” its direct talks with the Taliban to end the fighting. By all accounts, there will be a substantial reduction of U.S. forces by the end of 2014, withdrawing upwards of 70,000 troops and support personnel. What happens then? Both Afghanistan and the U.S. stand to face substantial economic disruptions when the war does end.

Withdrawing 70,000 troops from Afghanistan is an enormous undertaking: leaving aside the logistics of moving the people (which really involves packing them onto C-17s and flying them out), there are a host of economic dependencies to consider.

For starters, there are the bases. The Federal Business Opportunities website, a central clearinghouse for new government contracting, lists new base construction contracts worth tens of millions of dollars on almost a daily basis. Looking at the most recent solicitation, for a brigade garrison for the Afghan National Army, the government estimates this single construction project will have an estimated cost of between $100 and $250 million. After 2014, that sort of business will end, and along with it so will hundreds of millions of dollars flowing into the defense contractor community.

But it’s not just construction. Once bases are built, they need to be supplied. While most of the media attention to NATO’s supply trucks focuses on the relative minority that are ambushed by the Pakistani Taliban and lit on fire, these trucking companies — almost all owned by Afghans and Pakistanis — make millions of dollars every year. Once NATO shuts down its bases, that revenue will vanish. In the 1990s, these shipping companies (Ahmed Rashid called them the “trucking mafia” in his 2000 book, “Taliban”) made their money through smuggling drugs, illegal gemstones, and timber from Afghanistan to the outside world. They literally stripped the country bare. We can assume they’ll revert to form once the U.S. money spigot runs dry.

But bases also need to be protected. While one might assume troops do that (and many do), the U.S. hires local Afghan mercenary companies to handle perimeter security in some areas of Afghanistan. Part of the impetus behind Hamid Karzai’s political games with private security firms is his desire to control these groups (in December he dropped a push to disband most of them). Once the U.S. withdraws its troops and leaves its bases empty, many of these armed Afghan contractors will not have employers, leaving the country awash — yet again — with young, armed unemployed men. Very few people, if any, are making plans for demobilizing these contractors and finding them suitable employment elsewhere.

One can go down that rabbit hole forever. Suffice to say, the economy of Afghanistan is substantially dependent on the U.S. — in the form of military expenditure, but also in aid money. The Special Inspector General for Afghanistan Reconstruction tracks both programs and while the numbers are eye-popping (hundreds of millions of dollars are spent each year), SIGAR also notes how the military and USAID have a difficult time tracking the effects of the money they spend. We know this money flows into the economy of Afghanistan but we don’t know what effect it really has. As a result, we just don’t know what effect pulling all this expenditure out of Afghanistan will have, either, beyond guesses and estimation.

Meanwhile back in the U.S., we will have to deal with some unpredictable consequences of withdrawing so many troops, as well. According to Inc. magazine, “government services” is the second largest industry sector in the American economy. Within Afghanistan, more than 60 percent of the Department of Defense’s workforce is contractors, meaning contractors are the majority of the U.S. presence in the country. With the war winding down they’ll be coming home to uncertain employment prospects. After all, one of the biggest appeals of a contractor workforce is that they can be hired for a time, and fired when they’re no longer needed.

Very few who are pushing for immediate withdrawal from Afghanistan contemplate the economic consequences of ending the war. The economy can probably handle 100,000 underemployed war contractors, but it will take some adjustment. It’s not just the psychological cost of seeing the Taliban use equipment we leave behind to crack jokes about us. The war in Afghanistan is more than just the troops and contractors who are deployed: there is a vast ecosystem of small, medium and large companies back here that support those deployed workers. Without a hundred billion dollars in war costs every year, those companies will struggle to stay in business.

An executive at a small defense contractor recently joked to me, “Afghanistan is our business plan.” I asked him what he would do if the war ended. He stared at me for a moment and said, “Well, then I hope we invade Libya.”

This executive wasn’t actually hoping to occupy Tripoli. But he was expressing a worry many in the defense industry have about how they will run their companies and employ their workers once the wars are over. Ten years of war have established a discrete class of entrepreneurs, mid-level workers and administrators who are completely reliant upon the U.S. being at war to stay employed.

Drawing down the war in Afghanistan will generate substantial savings for the government. And, ultimately, removing a hundred billion dollars in government deficit spending could mean good news for our economy and for our national credit rating. But there will be economic and social ramifications from ending the war in Afghanistan that will be hard to predict. The mere prospect of tens of thousands of people thrown out of work by the end of the wars should be spurring both worry and planning, both by the government that indirectly employs these people and the companies that write their checks.

Assuming the defense budget follows the same trajectory as the war budget, the next few years will see an influx of highly skilled workers into the labor market. Such a pool of skilled labor can either be a boon or a catastrophe, depending on whether smaller companies find new ways to put those skills to use or as those workers languish in uncertainty. We should start planning and adjusting for what those new workers will mean for our economic future.

 

Comments

  • http://happening-here.blogspot.com/ janinsanfran

    Ya know, when you are doing something you shouldn’t be doing anyway, I’m not about to worry about what happens to you when you stop doing it. Bring ‘em home.

    And let Afghans run Afghanistan. They’ve done it before and they’ll do it again.

  • http://www.facebook.com/iowapeacechief Daniel Graham Clark

     I used to study some of the intricacies of job dependence on military spending, in hopes of helping us figure out a reasonable transition to peace oriented work. But now I see war making as our nation’s boldly willful choice. If you still believe war is our biggest business for noble reasons, you must not want to “get it” about the extent of our addiction. We really do GOTTA have that drug and just can’t help ourselves. And so we simply CANNOT end any war until we find the next one worthy of our investment in the habit. It’s pathetic and shameful, and I see no way out short of confessing our powerlessness and need for help from Higher Power.

  • electriclady281

    It would be much better for our safety, and that of the world, if the US waged
    peace instead of war. I am opposed to selling or giving arms to other countries.
    I think that we should be sending technology, i.e., tractors, computers, medical
    equipment, etc., instead of just handing over cash that invariably makes its way
    mostly into unintended pockets.
    Technological assistance
    should be given to Afghanistan as our troops are withdrawn. We should not again
    repeat the error of leaving a country that we broke in pieces with a power
    vacuum yearning to be filled by the next person or group promising stability at
    gunpoint. China and Cuba seem to have taken our idea of the Peace Corps and
    matured it into a peaceful but potent friendship tool throughout the world. It’s
    time for us to learn how to make friends and influence countries peacefully
    through assistance that meaningfully reaches the populations of those countries
    too. We’ve had enough experience with just financial and military “assistance”
    to know by now that it doesn’t work; money disappears into elite political rat
    holes, and arms are turned upon neighboring countries and used to subjugate
    their own populations. The people do not benefit from our “assistance,” but only
    resent us for it, and it’s easy to understand why.

  • http://pulse.yahoo.com/_4H4ECFCER4ZBN2AWN44UOBDY4U Jay

    I tend to assume that everybody has read the famous pamphelt “War is a Racket” by General Smedley Butler, but if you haven’t: http://www.ratical.org/ratville/CAH/warisaracket.pdf

  • Lincolnsteffens

    What a sickening position to take! Where is the question on why these military parasites profit from War and Occupation. Why there is profit on Militarism. Why the US economy is really only a War economy.

  • http://twitter.com/Dr_Kissinger Dr. Henry Kissinger

    I propose invading Iran. It will help Israel and help our economy and only cost a few hundred billion more than what we are currently spending.

    The Islamists are all excited about the Arabic/moslem rebellion against their legally elected dictators.

  • http://profiles.yahoo.com/u/6EWDTDGGPM2NUB23WZXTLKO6DI Lorili

    War is America’s biggest export.  I propose we change the name of the country to one more fitting of it’s corporate persona, like Death & Destruction R Us, Inc.

  • http://profiles.yahoo.com/u/6EWDTDGGPM2NUB23WZXTLKO6DI Lorili

    War is America’s biggest export.  I propose we change the name of the country to one more fitting of it’s corporate persona, like Death & Destruction R Us, Inc.

  • Anonymous

    First of all, we’re not leaving Afghanistan, Iraq, Pakistan or Libya.  Our “interests” need to be “protected.”  That would be our oil that the Arabs had the nerve to park their butts on for the last 5000yrs.  Also, Tel Aviv won’t permit it.  Even if we did bring back a couple hundred thousand troops, that would be a drop in the bucket for the 30 million looking for a decent job.  At least we wouldn’t be spending our money over “there”.   

  • Joe

    Please, consider using your brain to think before you jump at the opportunity to “blame the jews” for anything and everything going wrong in your life, the world, or our country.  

  • jaffi411

     No matter how you look at it, military and government expenditures provide no net production, nor do they serve the consumer.  The aura of this story reminds me of the same argument made at the close of WWII, whereby the economists of the day were stating that such an influx of workers would bring down the economy.  Yet, they did not take into account the amount of government expenditure and borrowing that made the war possible.  Obviously, a person would much rather be employed at home, at a job that they can drive home from (and, not get shot at while fulfilling), and that the amount of money spent on military and mil-contracter employment must necessarily come from the private sector.  The government cannot spend any money that it did not take from the private sector, or did not borrow on their behalf.

    Most people would much rather spend their own money, work at a job of their own choosing, and enjoy a reduced burden on their pocketbook with regard to taxes.  The ending of are warlike ways, the closing of bases in foreign lands, and the erasing of foreign aid to nations (who may or may not be our true friends) would cut the national budget by 2/5.  While it is true that we still have unfunded liabilities and continuing obligations, the reduction of governmental spending and taxes by 2/5 would more than compensate for the return of the 500,000 contractors and service-people.

    It would not only alleviate the burden upon savings and capital that are needed in order to reinvigorate business and individuals, but would allow individuals to seek their own interest, with their own money.  The entire purpose of an economy is for individuals to trade, exchange, and work voluntarily.  Taking away a large portion of their income does not give them the incentive, the savings, nor the capital in order to do this.  The ending of the war, which only destroys the produce of America, would serve no other purpose but to invigorate the nations economy.  

    It has been proven historically, empirically, and theoretically.  War does nothing but destroy resources, capital and wealth.  When you stop it (war), then the creation of these things can be directed toward the people rather than at destructive ends.  

  • jaffi411

     No matter how you look at it, military and government expenditures provide no net production, nor do they serve the consumer.  The aura of this story reminds me of the same argument made at the close of WWII, whereby the economists of the day were stating that such an influx of workers would bring down the economy.  Yet, they did not take into account the amount of government expenditure and borrowing that made the war possible.  Obviously, a person would much rather be employed at home, at a job that they can drive home from (and, not get shot at while fulfilling), and that the amount of money spent on military and mil-contracter employment must necessarily come from the private sector.  The government cannot spend any money that it did not take from the private sector, or did not borrow on their behalf.

    Most people would much rather spend their own money, work at a job of their own choosing, and enjoy a reduced burden on their pocketbook with regard to taxes.  The ending of are warlike ways, the closing of bases in foreign lands, and the erasing of foreign aid to nations (who may or may not be our true friends) would cut the national budget by 2/5.  While it is true that we still have unfunded liabilities and continuing obligations, the reduction of governmental spending and taxes by 2/5 would more than compensate for the return of the 500,000 contractors and service-people.

    It would not only alleviate the burden upon savings and capital that are needed in order to reinvigorate business and individuals, but would allow individuals to seek their own interest, with their own money.  The entire purpose of an economy is for individuals to trade, exchange, and work voluntarily.  Taking away a large portion of their income does not give them the incentive, the savings, nor the capital in order to do this.  The ending of the war, which only destroys the produce of America, would serve no other purpose but to invigorate the nations economy.  

    It has been proven historically, empirically, and theoretically.  War does nothing but destroy resources, capital and wealth.  When you stop it (war), then the creation of these things can be directed toward the people rather than at destructive ends.  

  • jaffi411

     No matter how you look at it, military and government expenditures provide no net production, nor do they serve the consumer.  The aura of this story reminds me of the same argument made at the close of WWII, whereby the economists of the day were stating that such an influx of workers would bring down the economy.  Yet, they did not take into account the amount of government expenditure and borrowing that made the war possible.  Obviously, a person would much rather be employed at home, at a job that they can drive home from (and, not get shot at while fulfilling), and that the amount of money spent on military and mil-contracter employment must necessarily come from the private sector.  The government cannot spend any money that it did not take from the private sector, or did not borrow on their behalf.

    Most people would much rather spend their own money, work at a job of their own choosing, and enjoy a reduced burden on their pocketbook with regard to taxes.  The ending of are warlike ways, the closing of bases in foreign lands, and the erasing of foreign aid to nations (who may or may not be our true friends) would cut the national budget by 2/5.  While it is true that we still have unfunded liabilities and continuing obligations, the reduction of governmental spending and taxes by 2/5 would more than compensate for the return of the 500,000 contractors and service-people.

    It would not only alleviate the burden upon savings and capital that are needed in order to reinvigorate business and individuals, but would allow individuals to seek their own interest, with their own money.  The entire purpose of an economy is for individuals to trade, exchange, and work voluntarily.  Taking away a large portion of their income does not give them the incentive, the savings, nor the capital in order to do this.  The ending of the war, which only destroys the produce of America, would serve no other purpose but to invigorate the nations economy.  

    It has been proven historically, empirically, and theoretically.  War does nothing but destroy resources, capital and wealth.  When you stop it (war), then the creation of these things can be directed toward the people rather than at destructive ends.  

  • http://twitter.com/sideunes sideunes

    Congress is proposing handing permanent, world-wide war-making powers to
    the president – including the ability to make war WITHIN the United States

    http://www.rawstory.com/rs/2011/05/16/aclu-national-defense-bill-authorizes-worldwide-war-without-end/
     

  • Willbur

    I sincerely hope that, some day, Americans see their own country invaded and destroyed for the profits of rich capitalists. I feel this is the only way they will ever kick their addiction to war and destruction. Apart from your over worked soldiers no American has any idea what war really looks like.
    You could at least make sure that the sons and daughters of your politicians are on the front lines.

  • Anonymous

    If the shoe fits wear it. Obviously, it a novice at history

    —– Reply message —–

  • Anonymous

     oh those poor war profiteers. my heart bleeds for them, as well all the rest of American taxpayers who want this money spent at home, here in America.

    no chance wars will stop, especially banding about  ”American Exceptionalism.”  
    American Society can and is falling apart while the military builds societies in Afghanistan, Pakistan, Iraq, etc.

    war is good for business, just not good for American citizens.

  • Victoriamike56

    War is a Racket

    by General Smedley D. Butler

    Published 1935 in the United States of America.

    Two words…, read it!

  • Victoriamike56

    War is a Racket

    by General Smedley D. Butler

    Published 1935 in the United States of America.

    Two words…, read it!

  • J7t14r

    Our American predicament in Afghanistan is somewhat similar to what happened in Vietnam. When we finally pulled out, the Saigon regime we had installed was so corrupt it collapsed just as soon as the North Vietnamese marched in. The Afghan regime we have installed is also extremely corrupt and as soon as U.S. forces leave, or possibly even sooner, the regime will collapse and the fanatic Talaban will once again rule those tortured people. But America has run out of money, so there is nothing we can do about it.

  • TCT1031

    We can afford domestic programs but not international wars and drug wars. We can get all of our troops out of Afghanistan, Iraq, Korea, and all of the other places we don’t belong in just a few days. If anyone tells you different they are lying. As far as the Contractors. They are a parasite that is expensive, incompetent, and a disgrace to America and our Service Women & Men as well as the rest of us. Ending these wars will bring our people and our money home. It’s time for these countries to stand on their own or not. It is not our job to create them from the dust.