Mercenary firms: a lucrative niche market

European states are subcontracting an increasing number of tasks to private military companies to cut their armies’ sizes and budgets. These mainly US firms cost them dearly, however, says military expert Alexandre Vautravers. Since the 1990s, the United States Armed Forces and particularly also the armies of Europe have been using private military firms to handle tasks they can no longer fulfil.

Alexandre Vautravers, head of the department of international relations at Webster University in Geneva and chief editor of Revue Militaire Suisse, explains why. swissinfo.ch: How do you explain the rising number of private military firms?

Alexandre Vautravers: Private military companies primarily work in niche markets, in activities which conventional armed forces cannot or do not want to carry out. Armies with annual budgets are not necessarily profitable according to defence representatives. They prefer to entrust a whole number of maintenance and logistics tasks to those companies. During the war in Iraq, for example, the US army signed extremely lucrative contracts for laundry, hygiene and cleaning.

These companies also win a lot of contracts to protect people and buildings, an area where the employment of trained and heavily equipped professional military staff is not always justified.

Finally, they fill the gaps by providing qualified personnel. This is, for example, the case for helicopter pilots. The armed forces train a lot of pilots, but the pilots often do not stay for a long time because the salaries are much more lucrative in private industry. The forces are therefore often obliged to ask private companies to accomplish certain missions with trained pilots.

swissinfo.ch: Is it cheaper to subcontract to private military companies?

AV: No, their tarifs are very high. As you can see in the book The Three Trillion Dollar War (2008), by Joseph Stieglitz, their services costs two to four times those provided by the army. For certain very specific activities in Iraq, this ratio could rise from one to ten.

But you have to be aware that contracts with private companies may be very limited in time. Which can be an issue with professional armed forces like in the US, France or Germany, where contracts generally last between three and five years. In addition, there is political pressure in all those countries to cut the head count and above all the costs. In professional armies in Europe, between 60 per cent and 70 per cent of the defence budget is spent on salaries. swissinfo.ch: Are we witnessing a kind of privatisation of war?

AV: In some ways you could say that. But privatisation is not necessarily what the armed forces want – it’s more a result of shrinking defence budgets in Europe. One example is the British defence budget, which has seen some very important cuts since 2010. So in-flight refuelling, for instance, is partly operated by a private military company. The same can be observed in the electronic war: the British army is trained by private companies, which allows it to gain a foothold in the cyber war. Even sea rescue, which was conducted by Royal Air Force helicopters up until now, will be abandoned because of its costs and taken over by four civil companies.

(2013-02-24/swissinfo)