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    South Asia
     Aug 5, 2011


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US business guru loses Afghan battle
By Mark Perry

When, in June of 2010, the New York Times featured an article reporting that the United States had "discovered nearly $1 trillion in untapped mineral deposits in Afghanistan" (and that the country could be "transformed into one of the most important mining centers in the world"), you could hear the scoffing all the way to Foggy Bottom. "That's just great," a career diplomat with more than 20 years of service in South Asia said, "but just who the hell is supposed to provide security for us to get to it?"

That was only the beginning. The article brought a near avalanche of derisive comments: that the report was a part of a government orchestrated "information operation" to sell the Afghan war to the American people, that there was "less to the scoop than meets

 
the eye", that the findings had appeared earlier in other publications, and that the corruption in the Afghan government would only be "amplified" by the findings. The article's author, James Risen, struck back: "Bloggers," he said, "should do their own reporting instead of sitting around in their pajamas."

The "Risen" broo-ha is now more than two years old, and yet the story of Afghan's mineral wealth, and the prospects that its development could help to stabilize the country, refuses to die. The primary reason for that is because Paul Brinkley, the head of the Pentagon's Task Force for Business and Stability Operations in Afghanistan, has refused to let it die.

Brinkley, a bullet-headed Texas A&M engineer and former Silicon Valley businessman, has been arguing since 2004 that America has to find new ways of thinking about political stability operations in conflict societies. Or, as a Pentagon expert on Afghanistan puts it, "we need to find a way to provide 18-year-old Afghans with an alternative to toting a gun".

Brinkley's story is fascinating - and controversial. He was originally brought to the Pentagon in 2004 by then-secretary of defense Donald Rumsfeld to modernize Pentagon business practices. A workaholic, Brinkley established the Pentagon's Office of Business Transformation, working 18-hour days to improve business practices designed to save US taxpayer money. But Brinkley's Pentagon-oriented focus was short-lived. In May of 2006, he was asked to go to Iraq to look at ways the Pentagon might more capably manage its finances.

While visiting Baghdad, Brinkley was contacted by the then-commanding general of the Multi-National Corps, Peter Chiarelli, who'd heard that a group of private sector business leaders were in town. The two met, and Chiarelli asked Brinkley to look at ways to put young Iraqis back to work.

"The 18 to 25 cohort was about 50% unemployed," a former military officer familiar with their discussion says. "Chiarelli was desperate to lower that number. If your choice is either getting a few bucks from the resistance, or starving ... well, you know, you'll take the money."

But Iraqi unemployment wasn't Chiarelli's only problem: J Paul Bremer's Coalition Provisional Authority team in Baghdad had a 102-page reconstruction plan that envisioned a kind of free market utopia that was right out of the neo-conservative playbooks - and had little to do with Iraqi realities.

At Chiarelli's request, Brinkley toured Iraq's shuttered factories and decided that the US should work to reopen them, state-owned or not, and transform them to private operations over time. One month later, after he'd returned to Washington, Brinkley established a team of experts to find ways to jump-start the Iraqi economy.

He envisioned his task force as a group of civilian business leaders and military experts that would focus on stimulating economic growth (including reopening Saddam Hussein's state-run industries), and that would interest outside investors in the country.

Its creation exposed a gap in US strategy: traditionally, the military fights wars and leaves nation-building and economic assistance to the US Agency for International Development and non-governmental organizations (NGOs), outfits familiar with dispensing aid money, but with little practical experience in business development.

Now, for the first time, the Pentagon was working to make business development a component of a broader military counter-insurgency. "This is a situation where something didn't exist, so it had to be invented," said a Pentagon backer of Brinkley's. "It was a new and exciting concept."

At first, Brinkley's efforts yielded few results. By September of 2007, after numerous trips to Baghdad with financial managers and potential investors, Brinkley's team had reopened only 16 factories, employing 5,000 Iraqis. Worse yet, Brinkley's initiative sparked resentment among officials at the State Department and White House, who accused Brinkley of being a "Stalinist" a "closet communist" and "un-American". While Brinkley never met Bremer, his visits to Baghdad were greeted coldly by Bremer's team, who shunted him into a closet-sized office in the Green Zone.

Inevitably, Bremer partisans attempted to get Brinkley fired. In mid-2007, an unsigned rambling 12-page memorandum ended up on the desk of the Pentagon's Inspector General with a host of allegations against Brinkley. While an IG investigation determined that the allegations were without foundation, the incident confirmed that those parts of the George W Bush administration tied to Bremer wanted Brinkley out of the way.

"This was pure politics, and dirty politics at that," a Pentagon official says. Eventually, the strategy to remove Brinkley failed because the claims weren't true - and because Chiarelli and head of US forces in Iraq General David Petraeus told then-new secretary of defense Robert Gates that Brinkley was succeeding. They needed him.

In essence, the "Bremer-Brinkley Feud" (or the "Paul-Paul Controversy" as it is known in military circles), pitted the followers of Bremer (who believed Iraq's state-owned enterprises should be shuttered, in a kind of economic "shock and awe") against the followers of Brinkley, who believed that Iraqi's state-owned enterprises should sustain employment until a free market economy could be built.

A Brinkley partisan reflects a more caustic view: "The Bremer-Brinkley feud was between a guy who'd taken a course in economics and one of America's best business minds." By early 2009, and having weathered the criticism leveled by Bremer's partisans, Pentagon reports showed that Brinkley's task force was yielding results, sparking investments from Boeing, General Electric, Daimler and Caterpillar.

Other programs, seeded with American funds, had jump-started private banking development, agricultural projects and fertilizer plants. Most importantly, Iraqis were beginning to go back to work.

A review of Brinkley's Iraq initiative yields a formidable list of successes: by mid-2009, his task force had sponsored more than 200 visits to the country by corporate executives and investors, generating more than $5 billion of investment commitments. Unemployment dropped - from about 50% of the total population, to somewhere near 15%: by then, General Electric had contracted to build power plants and Honeywell opened a Baghdad office to sell its equipment to the oil industry.

Brinkley's program was not without its costs: his task force spent $140 million in 2008. But those costs paled in comparison to military expenditures of over $140 billion, and a development and aid budget of over $3 billion.

The money was well spent and offset by more than $8 billion in new business contracts. A Der Spiegel article on Brinkley's successes notes that, as a result of his efforts, the Iraqis were building a steel mill in Basra and that ABC Carpet and Home - a New York "home finishing business" - was having its hand-knotted rugs made in Iraq.

Brinkley himself prefers not to speak on the record, but his reticence hasn't kept him from promoting his program, or recruiting government officials as his allies. In the wake of Risen's New York Times piece, he defended his efforts in a Pentagon briefing, then wrote articles on his successes for Newsweek and Military Review.

In the wake of Barack Obama's inauguration as president, the former Silicon Valley management expert was asked by senior military officers to do in Kabul what he had done in Baghdad.

Petraeus, now commander of US forces in Afghanistan, was one of Brinkley's strongest advocates, because he viewed his program as an important piece of his counter-insurgency campaign. Gates approved the initiative and, in March of 2009, Brinkley put together an expert team to travel to Afghanistan.

Brinkley and his group faced a number of challenges: unlike Iraq, Afghanistan had no infrastructure, had suffered through nearly three decades of war, and had few management or business experts. Not only were there no state-owned industries - there weren't any industries at all. Brinkley was starting at zero.

In Kabul, Brinkley followed the Baghdad model: a Business Week feature showed him spending hours on the telephone with potential investors, then days escorting them to the offices of Afghan ministers. He conducted his program from the inside of armored cars and in the midst of dusty villages, where he drank endless "cups of green tea". 

Continued 1 2  


Pentagon strikes it rich (Jun 16, '11)

Herat enjoys a gold rush (Dec 1, '10)


1.
Soon in Hong Kong: Invasion of the Amahs

2. Russia reaches out to Iran

3. Lowering America's war ceiling?

4. A spaghetti mess in the rice bowl

5. Ban on Pakistan Taliban too little too late

6. The collapse of America's middle class

7. The eighth wonder of the world

8. Turkey says farewell to the generals

9. New-generation war in Myanmar

10. India calls 'ceasefire' on border crossings

(24 hours to 11:59pm ET, Aug 3, 2011)

 
 



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