Tuesday, September 6, 2011

Outsourcing Wars

We like our wars.  We have and we will - - but budget constraints are casting some doubt on the economic feasibility of open ended commitments and global obligations.  Remember an important point - - between military poverty and military desire is (has been and will always be) opportunity.  Opportunity at the point where national interests intersect with capitalistic opportunity.

Matt Potter, in his entertaining new book Outlaws Inc. (2011), highlights this opportunity in the context of black market smugglers and private military logistical firms.  Potter has the following story in his book:

John MacDonald is a Surrey-based chartering agent, one of the middle-men who take the initial job specs for armies, aid organizations, importer/exporters, and private individuals and find the planes and the aircrews to do them.  Despite coming form a long line of aviation specialists and having "seen it all," he laughs as he recounts one wildcat II-76 team job that left the American military command in southern Afghanistan breathless with admiration, knowing they'd been hoodwinked by a five-man crew of Russians and their shadowy network.

"The U.S. military had this huge generator they needed to get to an airfield site they were planning in the south.  This was a remote area, and aside from a few pockets of U.S. troops, it was completely under bandit control.  There was no fuel available for mile around the landing spot, and none of the outfits we approached would touch it with a barge pole.  They all kept saying, "We'll never get out again, how can we take of from an unprepared airfield with no fuel?'

"The job was priced at between $60,000 and $70,000, but one day there's a phone call from these Russian guys.  They said, "We'll do it, but it'll cost you $2 million, in advance."  The Americans didn't really have a choice by this state, so they paid.  And sure enough, right on time, this ex-Soviet air force crew flew in, with the generator, in this battered old II-76, unloaded the generator, then sat down for a leisurely smoke.

"Just as all the Americans were wondering how on earth they were going to fly out again, there's a cloud of dust and up clatters this old minibus driven by some Afghan bloke - - and these airmen just get in and drive off.  The Yanks were all going, "Hey, how will you get the plane back?"  And the crew just said, "We won't.  It's an old one - - we only bought it for this job, and we're ditching it here."  Half a million dollars it cost them, and they held it together with string just long enough to land, then cleared off $1.5 million in profit and left it to rust.  It's still there.

"Everyone just applauded them - - the U.S. guys in command, us, and charterers the world over.  Not just for the flying, but for the incredibility sharp business mind that could hatch this.  It was truly beautiful."

Remember - - between poverty and desire is always opportunity.  The era of globally tight military budgets will only reinforce this.

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