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A Dangerous Form of Outsourcing

Tags War and Foreign PolicyWorld History

04/22/2004Grant M. Nülle

Many of my fellow Austrians have shown the outsourcing of the production of goods and services in the marketplace to be beneficial to society at large.The same cannot be said, however, for subcontracting foreign policy. Indeed, the American government's propensity to outsource certain aspects of its military activities to regional governments or local non-state organizations has rendered Washington's already reckless and aggressive brand of adventurism all the more dangerous to the world and America itself.  

Hiring local agents to further the diplomatic or military objectives of expansionist states is not a new phenomenon; history is rife with ambitious imperial powers utilizing indigenous labor and intelligence to outmaneuver competing hegemonic rivals.

Since Central Asia abuts India, that derided bastion of outsourcing, and Central Asia is the focal region (alongside the Middle East) of America's purported foreign policy endeavors, it will serve as a timely example of what is wrong with the wrong kind of outsourcing. The rebels and states that the US has funded and backed have become the US's biggest foreign-policy problem, even as the US adopts new friends and hypocritically averts its eyes to their violation of stated American values.

The story beings in December 1979 when the Soviet Union invaded Afghanistan, exploiting the trans-Afghan highway built by Moscow but financed by Washington to quickly establish a presence throughout the country. Eric Margolis's War at the Top of the World, an excellent account of the conflict, describes how beginning in the early 1970s the contending superpowers both realized the strategic importance of this Central Asian nation and subsequently vied for Afghan allegiance, much like the Kiplinger's aptly named nineteenth century "Great Game," which pitted Imperial Britain and Russia in a struggle for regional preeminence.

Margolis describes how a surprised and disoriented Carter Administration mulled employing tactical nuclear weapons to halt what was interpreted as the USSR's march through Afghanistan and Iran to the Persian Gulf, thereby obtaining a chokehold over Western oil supplies. The nearest American ground forces were located some 7,000 miles away, would take 30 days to assemble in theatre and would still confront overwhelming Soviet numerical superiority.

Fortunately for the United States, an ally was available in neighboring Pakistan, namely President Zia ul-Haq. Convinced that the USSR was also intent on running roughshod over Pakistan en route to the Arabian Sea, the wily general planned to foment indigenous resistance to ensnare the Soviets in Afghanistan. Pakistan's vaunted Inter-Service Intelligence (ISI) was tasked to arm, equip and train the Afghan mujahedin with Western and Arab largesse. Unable to confront the Soviets directly, the United States and its allies opted to subcontract the war fighting out to the mujahedin and its Pakistani patrons.

In tandem with the U.S.-Pakistan condominium, individuals and organizations hailing from the ummah, or Muslim communities, from around the world began to directly or indirectly participate in the jihad against the godless Soviets. Afghan delegations fanned the globe in search of contributions for the religiously inspired undertaking. The staunchly anti-communist, Egyptian-based Muslim Brotherhood (among other entities) began to organize, raise and dispatch monetary aid and volunteers to Afghan mujahedin units via the Pakistani conduit. More than ten thousand Muslims comprised the Islamic International Brigade, one of the primary contingents that waged war against the USSR.

The combination of Western aid and weaponry, Pakistani logistical prowess, and the indefatigable and motley array of mujahedin bogged Moscow's military machine down in the Afghan quagmire, prompting Mikhail Gorbachev to call for the Soviets to beat a retreat, which occurred by the middle of 1989.Once in Pakistan, aspiring mujahedin received insurgency training from the ISI, America's CIA, Britain's MI6, and Saudi intelligence as well as fervently aggressive religious instruction from on-site Islamic preachers. According to Margolis, the CIA secretly collaborated with the Muslim Brotherhood to procure recruits, money and Eastern Bloc arms and introduced the Afghan resistance to the war's decisive weapon—the Stinger missile. Pakistan's logistical support ensured that the arms and other covert assistance provided by the United States and its Western and Arab allies, which by 1988 was exceeding $600m per annum, found its way into the hands of the mujahedin, including the Islamic International Brigade.

Revolving adversaries

With the warm waters of the Persian Gulf and Indian Ocean well beyond Soviet clutches and Moscow in a more amenable mood to diplomatic engagement, the United States abandoned its Afghan and Pakistani proxies as quickly as Washington had acquired their services, opting for a modus vivendi with Moscow that would return Afghanistan to the status preferred by previous imperial powers: a fractious, infirm buffer zone.

The decade-long Russian occupation and the anteceding political turmoil of the 1970s claimed the lives of close to 2 million Afghans and turned 5 million more into refugees. The loosely-knit, American-backed, Afghan resistance groups soon dropped all cooperative pretenses and descended into civil conflict, exacerbating the travails of an already battered country.

The fate of Zia ul-Haq was no less kind. America's steadfast ally in combating the Soviets became expendable after Moscow's ouster from Afghanistan. Margolis asserts President Zia, who harbored ambitions of dominating his country's feeble Afghan neighbor and subsequently died in a mysterious airplane crash, was the casualty of a joint Soviet-American assassination plot. Like the attempt on Pope John Paul II's life, Western investigators were willing to ignore the evidence strongly implicating Moscow in favor of East-West rapprochement.

Zia was swiftly replaced by the Western-educated, media savvy, seemingly more compliant (at least in Washington's view) Benazir Bhutto. She quickly destroyed or euphemistically "lost" evidence pertaining to her predecessor's death. No matter, however, as Pakistan quickly fell out of favor with its American benefactors in 1990 when President Bush I terminated all military and economic assistance to Islamabad after the Pakistani military continued to bolster its nuclear capabilities.

In any event, the United States was busy contending with the collapse of the Iron Curtain and was occupied with dislodging Saddam Hussein—the horse America backed in Iraq's war against Islamist Iran, another outsourcing project (the Shah) gone awry—from Kuwait, a gulf state that had loaned Baghdad billions of dollars to combat Ayatollah Khomeini.

Zia's death did not necessarily mean Islamabad would abide by the American-Soviet/Russian concord to leave Afghanistan neutral and prostrate. The ISI, flush with success in ousting the Soviets took up a new vocation, this time outfitting products of its ultra-conservative Islamist religious schools as well as holdovers from the Islamic International Brigade to impose Islamabad's rule by proxy in Afghanistan. Armed with Pakistani wares the Taliban largely overran the petty warlords bickering over bits of a fractured Afghanistan, imposing its medieval variant of Islam on an already beleaguered populace.

Not to be outdone, Iran, Russia, and its Soviet-era Central Asian satrapies, bankrolled Afghanistan's other ethnic groups, all of which were opposed to the predominantly Pushtun and Pakistani-backed Taliban. As Margolis points out, a destitute Russia, at that time canvassing for International Monetary Fund (IMF) credits and other sources of Western taxpayer-funded assistance, could still stump up more than $1 billion to back its surrogate, Gen. Rashid Dostom, with Russian military advisors and Air Force pilots.

Bin Laden, September 11 and Pakistan

Buffeted by interethnic fighting on the frontiers and the draconian rule of the ISI's brainchild, Afghanistan became what the Clinton administration dubbed "a hotbed of terrorist activity." Osama bin Laden and his nebulous al-Qaeda network set up shop in the chaotic country with the consent and protection of the Taliban. A former member of the American-supported Islamic International Brigade, bin Laden oversaw the establishment of training camps from which to launch his violent jihad against the United States, its Western friends, and the corrupt and decadent House of Saud.

Following the attacks of September 11, 2001, a retaliation-minded United States decided to liquidate bin Laden's organization and unseat his Taliban hosts in Afghanistan. In a calculated move, Pakistan's leader, Pervez Musharraf, an army general, who like Zia ul-Huq seized power from civilian authorities, cast his lot with Washington, ostensibly spurning the Pakistani military's own creation next door. Musharraf's volte-face provided America and its anti-terror coalition logistical support and overflight privileges that enabled it to assist the indigenous, though foreign government-financed, armed opposition movements to drive the Taliban into hiding and dismantle al-Qaeda's training infrastructure.

Since September 11, Pakistan has been handsomely rewarded for its services to America's anti-terror posse. Reversing his father's decision to abrogate Washington's commercial and military links with Islamabad, Bush II canceled $1 billion of Pakistani debt to Washington, ensured another $12.5 billion of international foreign debt was restructured and coaxed the IMF's Executive Board into extending over $1 billion of credit on accommodative terms1.

Moreover, US taxpayers will be delighted to know (following the explanation below) that Musharraf's government will be eligible for grants totaling $3 billion over five years, half of which can be spent on American military equipment. Though the bilateral gift is contingent on Pakistan's commitment to uprooting the Taliban and al-Qaeda, participating in global anti-proliferation efforts and practicing good governance, these criterion are apt to be overlooked. The US State Department's near contradictory condemnation of Pakistan's human rights record and its inclusion of $700 million for Islamabad (the single-largest proposed disbursement to any foreign ally in the "war on terror") in the Fiscal Year 2005 departmental budget testifies to this contention.

Duplicitous dealings

So just what is Washington's coddling of Pakistan purchasing? According to statements made by Islamabad's top nuclear scientist coupled with previously and subsequently discovered evidence, one of Washington's indispensable allies in the war on terror has been unmasked as a chief architect of the worldwide proliferation of weapons of mass destruction.

On Feb. 4, 2004, Abdul Qadeer Khan, dubbed the father of Pakistan's "Islamic" nuclear bomb, confessed to his compatriots his role in supplying nuclear material to the likes of Libya, Iran and North Korea. Khan, who was previously convicted in absentia in the Netherlands for pilfering the technological secrets that made Pakistan's uranium-based nuclear program possible from his private employer in the 1970s, also revealed the existence of a covert trafficking network of staggering proportions2.

Aspiring nuclear club candidates could tap into a proliferation system that offered everything from bomb designs, pre-packaged centrifuge kits capable of producing uranium, to post-purchase counseling services from Pakistan itself or a multitude of companies dotting Africa, Asia, Europe and the Middle East that served as intermediaries.

Khan's web of nuclear commerce was unraveled thanks to a paper trail supplied by a reluctant Iranian government, which in October 2003 began to divulge to the International Atomic Energy Agency (IAEA) its interactions with the clandestine network of suppliers and middlemen. Tehran's admissions eventually pointed the finger to Islamabad, beginning with Khan's associates and finally leading to the father of Pakistan's nuclear bomb himself. Days of intense interrogation by the ISI finally prompted Khan to deliver his startling admission.

Khan and Pakistan's (explained below) proliferation sins are thought to have commenced in the late 1980s when Khan began to swap nuclear components for the technologies necessary to complete the country's atomic weaponization campaign. Driven by a paucity of funding—America was poised to terminate assistance to its client and the depository of Pakistan's nuclear funds, The Bank of Credit and Commerce and Credit International, was flirting with insolvency—Khan initially made contact with the reclusive North Korean government in 1992. From there he began to arrange an exchange of Pakistan's uranium enrichment capabilities for Pyongyang's Nodong missiles, weapons well-suited to lob warheads on Islamabad's bitter nemesis:  India. The following year Pakistani Prime Minister Benazir Bhutto made a covert trip to Kim Jong Il's fief to clinch the deal.

According to classified CIA assessments based on transcripts of Khan's testimony in February, North Korea likely received a nuclear kit comprised of warhead schematics, fuel and centrifuges capable of producing uranium. Pyongyang was eager to pursue the uranium route of nuclearization, given that its plutonium-based program had been suspended under its 1994 accord with America, which it unilaterally scuppered in late 2002. True to the bargain's terms, North Korea is believed to have received its first uranium enrichment assistance in 1997 and Pakistan tested its Ghauri missile, a thinly veiled facsimile of Pyongyang's Nodong, in 1998. Overall, the exchange was reckoned to have been worth $60 million.3

A similar transaction also constitutes Khan's dealings with Libya. After scrapping his nuclear ambitions and rogue leader status last December, Libya's mercurial president, Col. Muammar Qaddafi, unequivocally permitted international inspectors to ascertain how astonishingly close Tripoli had come to being a full-fledged nuclear power. American and IAEA officials say that beginning in 1995, when Libya decided to resume its pursuit of a nuclear deterrent, Khan's network, a veritable atomic Wal-mart, outfitted Libya with everything needed to churn out several nuclear weapons a year.  

Iranian participation in the market for WMD wares, disclosed only under intense diplomatic and political pressure, dates back to the late 1980s. The IAEA believes Zia ul-Haq spearheaded the transaction, delivering details of uranium enrichment technology to America's sworn enemy just as Pakistan and America were jointly combating the Soviets in Afghanistan. Zia, like Khan and many other top Pakistani officials and military officers, was keen on defying western countries by forging a nuclear-armed coalition of like-minded Islamic states4. Despite the contention its enthusiasm for fission is purely peaceful, petroleum-rich Iran's uranium enrichment centrifuges smack of Pakistani design, due to the fact Khan's network remitted several shipments of these components to Tehran in 1994 and 1995.

What is more, the revelation that Tehran has employed more advanced nuclear machinery and conducted more sophisticated experiments than it revealed to the IAEA in October 2003 has prompted speculation that the Islamic Republic acquired a nuclear package similar to that of Tripoli and Pyongyang. Whatever the outcome, it is certain that Khan's network played an instrumental role in furthering Iran's nuclear vocation.

Lastly, international investigators have discovered, via testimony from former Pakistani officials, that soon after Iraq's occupation of Kuwait, an intermediary acting on behalf of Khan offered the network's expertise in helping Baghdad harness the atom. A British translation of an October 6, 1990 Iraqi intelligence memorandum stated that Pakistan's top nuclear scientist was willing to provide "project designs for a nuclear bomb."  As it stands, Khan's indirect proposal represents the beginning and the end of Iraq's relation to the Pakistani scientist's nuclear network

Dodgy alibis and suspect pardons

In his February confession, Khan claimed that the proliferation efforts directed from his namesake national laboratory were motivated by personal aggrandizement, lacked government connivance or assistance, occurred before Musharraf's assumption of the presidency and ceased after the putsch, a line that the general readily seconds. However, this characterization of Pakistan's nuclear dealings is belied by several damning pieces of evidence.

For one, Libya would not have dismantled its WMD developments so readily had it not been for the interdiction of a German vessel, the BBC China, carrying centrifuge components to Tripoli last year. Indeed, the pace of Qaddafi's accumulation of uranium enrichment and nuclear weapon equipment reached its zenith over the past two years, well after Musharraf became president and aligned Islamabad with Washington.  

Similarly, North Korean-Pakistani cooperation accelerated between 1998 and 2002, as evidenced by the dispatch of North Korean scientists to Khan's laboratories during this period to work on missile technology. Photos taken by American satellites depict the ubiquitous presence of Pakistani military cargo planes in the hermit kingdom. Although American intelligence can be grossly unreliable (e.g. Iraq) South Korea's spooks identified Islamabad as the source of North Korea's uranium enrichment activities in 2002.

Furthermore, the sheer scale of the exchange—North Korean missiles that seamlessly fit Pakistan's nuclear warheads for a uranium option in lieu of a then-proscribed plutonium program—could not have been orchestrated without the sanction and support of officialdom on both sides.

In sum, America's focal ally in Central Asia and the global war on terror has systematically trafficked nuclear weapons technology and expertise to "Axis of Evil" states North Korea and Iran (approached Iraq) and junior member Libya even after Bush II made his combative 2002 State of the Union Address dubbing the aforementioned rogue states as such.

Predictably, Abdul Qadeer Khan was granted a full pardon for his proliferation activities, given that the metallurgist is revered by his compatriots and any punishment would prompt him to divulge the extent of Pakistani government and military participation in his nuclear game, sullying the reputation of countless officials and military officers and jeopardizing the country's present bonhomie with America.

For its part, America and Britain treated the Khan affair as germane only to Islamabad. An implicit quid pro quo exists, exonerating Pakistan, named by Washington a major non-NATO ally in March, in exchange for help in flushing vestiges of the Taliban and al-Qaeda out of the mountainous Afghan-Pakistani border region.

Taking to task a blatantly treacherous underling like Pakistan is incomprehensible for the Bush administration to do, for such a move would detract from its efforts in painting the Afghan venture a success and undermine the entire thrust of the president's foreign policy, especially when his economic achievements during this electoral season are dubious at best.

The troubles of outsourcing

What conclusions can one glean from this tale of Central Asia, nuclear weapons proliferation and the enlistment of local strongmen in the pursuit of American national security objectives? For one, this ongoing saga underscores the gross hypocrisy, inconsistencies and failures of the professed aims of Washington's foreign policy.

Democractization of failed, unruly or despotic regimes? Whatever the merits of democracy, and despite talk of imposing this political structure on the Middle East and Afghanistan, Washington scarcely objects to Pakistan's ruling military junta (although the country elects a nominally significant parliament).

Rather, American policy makers welcome democratic decisions only when they reaffirm fealty to the world's hegemon. Otherwise, as in the case of Spain, where voters chose to oust a pro-Washington government that deliberately mislead the public about the likely source of the horrific train bombings of March 11, the exercise of the franchise is ridiculed as foolhardy.

How about promoting human dignity and enhancing the welfare of populaces systematically victimized by regional tyrants? Just as Washington insists on entitling the inhabitants of Iraq and Afghanistan to a plethora of civil liberties (in rhetoric) it also props up abusive rulers like Uzbekistan's Islam Karimov, the ex-Soviet despot whose unsavory depredations against his subjects go largely unreported in the West.

Whereas dodgy intelligence and prior acts were sufficient grounds to invade a sanctions-stricken Iraq, America lavishes billions of dollars of aid on a country that not allegedly but actually sold the technology and expertise requisite to produce nuclear weapons to Iran, North Korea and Libya well after the inauguration of the so-called "War on Terror."  With friends like Pakistan, who needs enemies? 

Thus, American foreign policy is nothing more than (don't look neocons) the respective French and German concepts of raison d`etat and realpolitik, pur et dur. Bereft of any moral moorings and predicated on the use of might, this opportunistic type of foreign policy dovetails with the agenda of the state, which relies on incessant warfare to consolidate preeminence over the territory it controls and aggrandizes its international standing along with ostensibly allied states to the detriment of perceived rivals.

Clearly, cultivating proxies to further foreign policy objectives is an inherently hazardous proposition. Funneling economic and military assistance to client states is inimical to liberty in that the patron government robs its populace, via taxation, to obtain the necessary funds for the transfer, thereby placing additional resources at the disposal of the recipient regime enhancing that ruler's capability to coerce its own citizens as well as antagonizing its neighbors.

Additionally, beneficiaries of state-to-state aid are prone to accept handouts with one hand and drive a dagger into the flank of its benefactor with the other. The contrast between market and state-to-state transactions is stark: the former is predicated on peaceful and mutually beneficial exchange, the latter is coercive (as far as subjects of countries either paying or receiving state aid are concerned) and duplicitous, tending toward a zero-sum outcome.

Rather than bemoaning the wildly overblown notion of outsourcing jobs to South Asia, Americans should direct their attention to addressing Washington's penchant for meddling abroad. The outsourcing of US foreign policy has fueled wars and madmen, and made the world a more dangerous place.

  • 1. "Payback time." The Economist. June 26, 2003.
  • 2. "Rogues step in." The Economist. Jan. 10, 2004.
  • 3. "US widens view of Pakistan link to Korean arms." New York Times. March 13, 2004.
  • 4. "What did Pakistan know about Khan’s deals?" Financial Times. April 5, 2004.

Contact Grant M. Nülle

Grant Nülle, MBA, is a former legislative staffer, finance director, and budget analyst with extensive experience in fiscal and economic policy. He is currently working on a PhD in mineral and energy economics in Colorado.

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