Blackwater boss resurfaces with $10bn business plan for war in Afghanistan

Erik Prince, founder of the private security company Blackwater, has resurfaced as President Donald Trump mulls over what to do about the Afghanistan conflict, which consumes billions of taxpayer dollars. (Reuters)
Updated 13 August 2017
0

Blackwater boss resurfaces with $10bn business plan for war in Afghanistan

WASHINGTON: Nearly 16 years after US forces entered Afghanistan, a shadowy figure from the past is making the rounds in Washington with a plan to end America’s longest war.
Erik Prince, founder of the private security company Blackwater, has resurfaced as President Donald Trump mulls over what to do about a conflict that bedeviled his two predecessors in the White House.
Prince’s plan for Afghanistan would start with the naming of an all-powerful American “viceroy” who would report to the president and play a role like that of Gen. Douglas MacArthur in post-World War II Japan.
American troops, aside from a handful of special forces, would be replaced by a private army of around 5,500 contractors who would train Afghan soldiers and join them in the fight against the Taliban. They would be backed by a 90-aircraft private air force. And all at a cost of less than $10 billion a year, as opposed to the $45 billion the US is expected to spend in 2017 on its military presence in Afghanistan.
Prince, a 48-year-old former US Navy SEAL, has kept a low profile since selling Blackwater in 2010 — three years after some of his employees hired to protect US diplomats killed 14 unarmed Iraqi civilians in Baghdad and wounded another 17.
He first outlined his Afghan proposal in an article for The Wall Street Journal in May. Since then, Prince, who currently heads Frontier Services Group, a Hong Kong-based security company, has met with US officials here and made television appearances promoting his plan.
Prince, whose sister Betsy DeVos is Trump’s education secretary, says he has received a sympathetic hearing from the president’s chief strategist, Steve Bannon, and some members of the Congress but a chilly reception from the Pentagon.
After taking office in January, Trump ordered a strategic review of the situation in Afghanistan, where some 8,400 US soldiers and 5,000 NATO troops are assisting the Afghan security forces in battling an emboldened Taliban.
Trump said Thursday that he was “very close” to revealing his decision on how to proceed in the war-torn nation, where 2,000 US troops have died since Americans were first deployed there in the weeks after the Sept. 11, 2001 terror attacks.
“We’re getting very close. It’s a very big decision for me. I took over a mess, and we’re going to make it a lot less messy,” said Trump, whose frustration with the stalemate in Afghanistan reportedly led him last month to suggest firing the US commander there, Gen. John Nicholson.
Trump has given Defense Secretary Jim Mattis authority to set troop levels in Afghanistan and the retired general is said to be leaning toward boosting US forces there by about 4,000 troops.
Prince, in an interview with CNN, said he has not met with Trump to discuss his plan and acknowledged that National Security Adviser H.R. McMaster, like Mattis, a former general, was not keen on the proposal. “I would say Gen. McMaster does not like this idea because he is a three-star conventional army general and he is wedded to the idea that the US Army is going to solve this,” Prince said.
McMaster and Mattis are not the only skeptics when it comes to Prince’s plan. “It’s something that would come from a bad soldier of fortune novel,” Republican Sen. Lindsey Graham told The Washington Post. “I trust our generals. I don’t trust contractors to make our national security policy decisions.”
Sean McFate, a former military contractor in Africa and author of a book about the private security industry, “The Modern Mercenary,” said he considers Prince’s proposal to be “supremely dangerous and foolish.”
“There’s been no discussion about oversight, regulation, safety, accountability, control,” McFate told AFP.
He said private contractors in Afghanistan would inevitably be involved in a horrific event like the September 2007 killing of Iraqi civilians by the Blackwater contractors in Baghdad.
“The first time there’s a massacre we’re going to have to go in there with the Marine Corps and rescue them,” he said.
“Ultimately you get what you pay for,” McFate said. “It’s like having cheap contractors fix your house. At the end of the day it takes twice as long and is four times as expensive.”
Stephen Biddle, a political science professor at George Washington University, said he considered Prince’s plan “pretty dreadful” but is not surprised it is getting a hearing in a White House looking for a new approach.
“The president isn’t very happy with the options that he’s got and is predisposed to like things that are new,” Biddle told AFP. “And Republicans in general tend to like privatization.”
“But not all new ideas are good ideas,” Biddle said.


Pace of Saudi Arabia’s private sector sell-off accelerates

Updated 4 min 30 sec ago
0

Pace of Saudi Arabia’s private sector sell-off accelerates

  • Aim is to increase the private sector contribution to gross domestic product from 40 percent to 65 percent by 2030
  • The NCP said that the privatization program would save the government around SR35 billion.

DUBAI: Saudi Arabia’s ports, hospitals, desalination plants, schools, and even its sports clubs, are among the candidates for early transfer to the private sector in a program that the government hopes will generate up to SR40 billion ($10.6 billion) in revenue over the next two years.
The National Center for Privatization (NCP), the body responsible for implementing the big state sell-off program, released details of its privatization plan after the Council of Economic and Development Affairs, chaired by Crown Prince Mohammed bin Salman, approved the proposals to increase private sector involvement in the economy — a vital part of the Vision 2030 strategy to reduce oil dependency.
The aim is to increase the private sector contribution to gross domestic product from 40 percent to 65 percent by 2030.
The NCP said that the privatization program would save the government around SR35 billion, add SR14 billion to gross domestic product, and generate up to 12,000 new private sector jobs in the Kingdom by 2020 — the initial phase of the sell-off.
“The scale is very realistic given that privatization is a complex and time-consuming process from a host of perspectives, including regulatory, governance and legal,” said John Sfakianakis, director of economic research at the Saudi Arabia-based Gulf Research Center.
“The estimated amount is equally pragmatic at this stage. These numbers change both due to valuations and appetite as well as economic conditioning with time.”
Other parts of the national economy are also earmarked for some form of privatization under the Delivery Plan 2020. Transport, the renewable energy industry and flour mills are all scheduled in an NCP report that lays out the structure and conditions of the state sell-off program.
“The most important characteristic is the commitment to push ahead with privatization as well as do it in a phased way over the next few years that involves a number of different sectors. There is an evolutionary phase to any privatization process that involves multiple phases over time,” said Sfakianakis.
The King Faisal Specialist Hospital and Research Center, the Riyadh facility regarded as the jewel in the crown of Saudi medical facilities, is named as a subject for incorporation as a prelude to becoming a non-profit organization “to become financially independent and a role model in the health sector and help in achieving its leadership position through focusing on innovation.”

HIGHLIGHTS
- The National Center for Privatization hopes the 2020 privatization program will contribute SR13-14 billion to Saudi Arabia’s GDP.
- Total government proceeds from asset asset sales will total between SR 35 billion.
- Net savings (capex and open) from privatization and PPP projects are forecast to be SR25-33 billion.
- Between 10-12,000 new private sector jobs will be created.
- The privatization program aims to enhance competitiveness, and improve the Kingdom’s business environment through privatizing government services.


Other hospitals will be privatized by the handing over of medical facilities to private operators and the creation of new medical cities, as well as primary care facilities, the provision of rehabilitation services, radiology and laboratory
upgrades.
In a statement, Turki Al-Hokail, chief executive of the NCP, identified other sectors that would be the focus of the privatization plan, including agriculture, housing, energy and Hajj and Umrah services.
“The privatization program aims to enhance competitiveness, elevate the quality of service and economic development, and improve the business environment through privatizing government services,” he said.
The privatization program has been an element of the Vision 2030 strategy since it was launched two years ago, but the latest document sets out a firmer timetable for the sell-off. It identifies “game changers” — businesses that will “receive special attention from the leadership to ensure their successful completion.”
The first three “game changers” are Saudi Arabian ports, the Saline Water Conversion Company at Das Al-Khair and what the NCP calls “opportunity explorers” — structures aimed at facilitating partnership opportunities between the public and private sectors.
The NCP makes clear it is keeping its options open in choosing what kind of privatization is appropriate for a sector: “Full or partial asset sale, initial public offering, management buy-out, concessions or outsourcing” are all under consideration.
Some 100-plus privatization initiatives have been identified across 10 ministries, of which some (including sports clubs, grain silos and desalination) are expected to be completed by 2020.
Jason Tuvey, Middle East economist at Capital Economics, said that the estimate of selloffs were lower than what was possible given the “vast number” of companies that the Saudi state wholly owns or has a controlling stake in.
“Excluding the Aramco IPO, we’ve previously estimated that the government could raise around $25-50 billion from privatizations,” he told Arab News.
The document also makes clear that foreign participation will be allowed in some parts of the program.
The NCP program does not include any assets owned by the Public Investment Fund, the body which is intended to become the world’s largest sovereign wealth fund with assets of $2 trillion by 2030 and which will retain the right to sell the assets it owns in partnership with the government.
The NCP program also does not include residential real estate assets which are unlocked for private sector usage by contractors and real estate developers, and which are covered by the national housing program.
Ministers have said that the overall privatization program could raise as much as $200 billion in sell-of proceeds in the years running up to 2030, but there is no certainty as to how that figure will be reached. In Riyadh last week government officials gave a more conservative estimate of between $50 and $60 billion.
The plan also makes it clear that there is still work to do on the legislative and regulatory framework within which privatization will be pursued. The first of the three “strategic pillars” of the Delivery Plan is the creation of such structures “to enable privatization processes and governance by setting clear and specific procedures that increase the level of preparation and execution of privatization.” Key initiatives remain to be fulfilled in this respect, the document says.
Al-Hokail added: “The privatization program is in the interests of Saudi citizens, will bring many benefits, and improve the investment climate. The program’s strong governance foundation will be a strong pull factor for global investors and large corporations because it sets the guidelines that will make the program attractive.”