Who is winning work in Iraq and Afghanistan?

In the old days, American soldiers were fed by a low-ranking Army cook. In today's Iraq, however, they are fed by an employee of Kellogg, Brown & Root (KBR), a subsidiary of US giant Halliburton.

KBR doesn't just feed soldiers in Iraq, it also takes care of cleaning up afterwards, has built the military barracks and, according to KBR vice president Robert Hendon, has taken over "the entire in-country transportation mission."

Founded in 1919 as a paving company, KBR evolved into one of the world's leading constructors of facilities and infrastructure. It built the Melbourne Formula One stadium and a number of Olympic facilities in Sydney, while more recently it was the mastermind behind the prison system for Taliban fighters in Guantanamo Bay.

After the end of the Cold War, KBR diversified its activities by offering logistics and support to the US military. Ever since, wherever the US Army goes, KBR goes, too. It worked with the Army in Afghanistan, Croatia, Kosovo, Kuwait, Saudi Arabia and Somalia. Former Halliburton CEO Dick Cheney once said, "The first person to greet our soldiers as they arrive and the last to wave goodbye is one of our employees."

KBR is not the sole private actor on the Iraqi stage. In fact, the most important coalition partner of the United States is not the British, but an estimated 10,000-15,000 civilians who often perform tasks that used to be carried out by soldiers. Apart from feeding and transporting soldiers, they sweep for mines, operate unmanned Predator drones, maintain the B2 Stealth bombers, and secure the companies and people involved in the reconstruction of Iraq.

Even the top US official in Iraq, Paul Bremer, is guarded by a contingent of privately hired ex-commandos. One of the advantages of hiring civilians is that company employees who get killed in Iraq don't appear in government death toll, and the US Army isn't officially responsible if anything goes wrong.

According to a publication by the American Center for Public Integrity, over the last two years more than 70 American companies and individuals have won contracts in Iraq and Afghanistan worth $8 billion. A third of the contracts are for security and military assistance, and the rest is for reconstruction.

KBR tops the list, with contracts totaling $2.3 billion, a large part of which concerns military logistics. It doesn't come as a surprise, then, to learn that Halliburton, KBR's parent firm, reported a 39 percent increase in sales in the third quarter of 2003.

DynCorp, an American company founded by former Los Angeles police officers, won a contract worth $50 million to train the Iraqi police force. To facilitate the training, President Bush asked Congress to fund an $800 million training facility, which could very well be built by KBR. DynCorp is known for training Colombia's anti-drug squads. It also worked in Bosnia and takes care of the personal security of Afghanistan's President Karzai, for $130,000 a year.

Vinnell, a subsidiary of Northman Grumman, won a one-year contract to train the new Iraqi army for $48 million. The Virginia-based company is also one of four companies that is directly assisting the US military in the current war and has trained the Saudi army for the past 25 years. USA Environmental won a $65 million contract to collect and destroy enemy ammunition.

The American Center for Public Integrity warned that nearly all of the 10 biggest contracts have been won by companies with former government officials on the payroll or that are known for their contacts in the Pentagon, the State Department and USAID. According to Jim Krane, "The connection between companies and politicians in Washington raises the specter of executives lobbying for a hawkish foreign policy, since they profit from war."

The war in Iraq is by far the most privatized in history. According to Peter Singer, author of the recent book Corporate Warriors: The Rise of the Privatized Military Industry, there are 10 times more civilians operating in Kuwait and Iraq than in the first Gulf War, which confirms the trend for the privatization of warfare that started with the end of the Cold War in 1989.

"When the Berlin Wall fell," Singer writes, "an entire global order collapsed almost overnight. The resultant effect on the supply and demand of military services created a security gap that the private market rushed to fill."

Security threats have proliferated and become more varied. Instead of a new world order of peace and prosperity for all, as some politicians had hoped, the end of the Cold War only saw a sharp increase in violence and conflict. According to the US State Department, there are 74 countries in which physical security is a problem, and some form of civil war in 34 countries.

During the Cold War, the two superpowers provided a kind of global order and stability, but afterwards a large number of dormant, postcolonial power struggles came to the surface. Of course, after September 11th, things only got worse.

Singer thinks that Osama bin Laden is part of the global trend: "The advance that bin Laden brought to terrorism was its privatization, essentially acting as a venture capitalist for terror cells at a time when state sponsorship dried up."

While the world shows a growing demand for protection and military means, the supply side of the equation is shrinking. After the hypermilitarization of the Cold War came a period of massive demobilization.

According to Singer, there are 7 million fewer soldiers worldwide than during the peak of the Cold War. Most jobs were lost in the former Soviet Union. And the US Army has 700,000 fewer soldiers on the payroll, while in South Africa some 60,000 soldiers were dismissed when the apartheid regime came to an end.

And then there's the Somalia factor: following the image of US Marines being dragged through the streets of Mogadishu, governments are increasingly less willing to risk soldiers' lives in faraway wars of limited strategic importance.

Consequently, the private sector moved in to fill the gap. According to Singer, there are currently some 90 private military companies operating in an overall security market worth some $100 billion, which will be doubled by 2010.

He divides the market into the following segments: first, there are the military support firms, such as KBR, mainly offering logistics. Secondly, there are the firms offering consulting and training, among which Vinnell and Military Professional Resources Incorporated (MPRI), which claims "to have more generals per square meter than the Pentagon."

Finally, there are military provider firms, such as the now dissolved Executive Outcomes and Sandline, which on their websites offer soldiers and equipment to actually fight a war. However, these are quite exceptional. Most common are firms that employ former soldiers who, as John Davidson of Rubicon puts it, "protect people and assets in hostile environments."

Meanwhile, the downsizing and privatizing of national armies continues. The British government recently announced it aims to save several billion dollars by further trimming its army. US Secretary of Defense Donald Rumsfeld, a firm advocate of outsourcing, aims to cut 200,000 jobs, and Russia's Vladimir Putin recently approved the privatization of a dozen formerly state-owned military companies.

For Doug Brooks, president of the International Peace Operations Association, it's a more than welcome development. Based in Washington, the IPOA is essentially a lobbying group, which ranks among its members military companies such as Sandline, MPRI and Armorgroup. One of its aims is to make international peace operations succeed through the greater use of private military services.

"Private companies are faster, cheaper and usually much better," Brooks claims, referring to reports from the General Accounting Office, which state that savings could run into billions of dollars. "There are also numerous anecdotal reports," he adds, "of how much militaries spend by doing silly things that companies can do better for a fraction of the cost." As MPRI's Ed Oyster said, "You don't need a trained combat infantryman to drive a forklift." Or clean a toilet, or serve a burger.

But companies are not always cheaper, especially when they have a monopoly. Look at Halliburton, which has been accused of overcharging the US Army in Iraq by $61 million for supplying oil, while KBR is under investigation for possible overcharging during the Balkan wars.

However, according to the IPOA's Brooks, "Private military companies are easier to monitor and better able to ensure accountability. When it comes to international peacekeeping, they can fill in for Western forces that have largely abandoned such operations."

He points at the actions of South African company Executive Outcomes in Sierra Leone in 1995. "EO averaged 150 employees in the country over 21 months, cost $36 million and essentially ended the war in 1996," he says.

"Everything fell apart after their contract was canceled prematurely. When the United Nations came in 1999 they ended up costing more than $60 million per month. And in May 2000, with 8,000 blue helmets in the country, they were routed by a handful of guerrillas."

The military effectiveness of EO is generally regarded as a success story. However, what Brooks does not mention is that company executives owned a string of mining and diamond companies, and that they probably were paid in mining concessions.

Critics warn that private military companies, despite their smooth corporate image, could be a reincarnation of the cold-blooded mercenaries that roamed Africa in the 1960s: fighting not for what's right, but for the highest bid.

That may be an exaggeration for the industry in general, but with $87 billion to spend in Iraq, an estimated third of which goes to security and military support, military privatization is certainly a trend to watch in the future.