The Next Military-Industrial Complex: Global Business and National Security

As the national security establishment explores a renewed “partnership” with the private sector, past experiences reflect rather uneven bargains for both sides. It is the limited shared interest that ultimately constrains the sovereign/private “partnering” effort today, and impacts tomorrow’s resulting security structure.

As the national security establishment explores a renewed “partnership” with the private sector, past experiences reflect rather uneven bargains for both sides. It is the limited shared interest that ultimately constrains the sovereign/private “partnering” effort today, and impacts tomorrow’s resulting security structure.

March 12, 2018 | Source: War on the Rocks, warontherocks.com, 14 December 2017 , Philip D. O’Neill, Jr.

In the future, the American defense establishment’s engagement with the private sector will vary with the mission. The arms-length procurement requirements of a dedicated industrial base for big-ticket weapon systems are different from the requirements of frenetically paced software development through co-investment. In turn, sovereign “joint venturing” abroad through private enterprise can help solve thorny security issues or facilitate diplomatic openings. However, such relationships nevertheless morph because private and public-sector interests differ, especially when it comes to allocating risks and rewards.

Part One of this series explored the idea of governments seeking to ride the “coattails” of private investment to tap that sector for customized commercial solutions to security problems. Part Two examines ways in which these public-private partnerships can go wrong. Historically, governments have grabbed private coattails for too long, failed to recognize they were there for the grabbing, or left them twisting in the wind. This article draws lessons from disparate case studies ranging from Pakistani fertilizer sales, to bunkering facilities in Aden, to insurance payments to the North Korea government. Examining how failure triumphed in the face of opportunity in each case helps those contemplating a closer sovereign-private security relationship to better understand when and how to embrace these ties.

The article goes on to cover the following:

  • Lesson One: Afghanistan and Pakistan — When to Let Go of Private Sector Coattails
  • Lesson Two: Afghanistan and Pakistan — The Failure to Ride Private Sector Coattails
  • Lesson Three: Yemen — When Government-Backed Private Commercial Stabilization Efforts Fail
  • Lesson Four:  North Korea — When Not to Let Go of Private Enterprise’s Coattails
  • Conclusions