Disaster Capitalism Is Everywhere

By Antony Loewenstein, Al Jazeera America

03 October 15

A plethora of private companies are profiting from natural or man-made crises – abroad and at home

hen an earthquake struck Nepal in April, thousands of locals died in the carnage. But many foreigners had far more luck as members of Global Rescue, a company committed to rescuing its clients from dangerous environments. “Why shouldn’t we be able to hire private armies to ensure our safe return home from vacation?” posed a recent article in Wired, headlined “The tricky ethics of the lucrative disaster rescue business.”

Global Rescue is booming, opening offices in Pakistan, Thailand and beyond. There’s nothing illegal about its operations, and its mandate makes a certain amount of sense: Anybody in the middle of a natural disaster would want to be helped immediately. But the corporation’s interests aren’t humanitarian — they’re profit-driven, with an annual membership costing approximately $700. In Nepal, limited numbers of helicopters were fought over to transport injured foreigners, while the vast majority of Nepalese had no choice but to wait for help from overwhelmed relief services. “It’s beyond our scope” to assist those locals trapped on snowy mountains, said Drew Pache, a Global Rescue employee and former U.S. special forces operative.

It’s hard to find a better characterization of disaster capitalism than this — companies making money off catastrophe from the privileged few while ignoring the desperate pleas of the majority. But it’s not just natural disaster that fuels such profiteering. From Greece and Papua New Guinea to Afghanistan and Haiti, countless industries are thriving by applying this rule to immigration, war, mining and aid. These businesses aren’t conducted secretively, in part because it’s nearly impossible to hold an American company to account if it breaches human rights in a faraway nation. Their success builds on an ideology, empowered by the existing political and media structures, that exploits the widespread anxiety or panic that follows a man-made or natural crisis. Companies such as Global Rescue thrive because of it. The process depends on powerful forces pushing through exploitative policies in the name of relief, progress or reform.

Further profits are being harvested from Europe’s refugee crisis. In Britain, the private outsourcing company Serco still runs the Yarl’s Wood immigration center, a facility with a shocking record of abuse against detainees. Despite this being known for years, David Cameron’s Conservative government reappointed the multinational firm in late 2014 with another eight-year contract. It makes no sense — I visited the center last year and found depression and bleakness — unless we view it through the grim lens of disaster capitalism. Companies such as Serco exploit the refugee crisis in Libya and Syria to bully and fund politicians and guarantee an increase in their bottom line. Serco is savvy enough to see dollar signs from the guaranteed exodus of people — and in turn, today’s political system, fueled by excessive money and donations, all but ensures this outcome.   

The profit motive for firms isn’t a new phenomenon. Recall the East India Co., arguably one of the world’s first disaster capitalists, which oppressed Indian and Chinese locals to become leading corporate raiders. But the global reach of today’s companies and their extravagant takings place them in a unique and often unassailable position. 

For example, British multinational security firm G4S, the largest of its kind in the world, continues to operate despite suffering innumerable scandals in the last decade. The firm is always willing to exploit a crisis for profit, including by offering protection to Western travelers or by building and staffing detention centers during the current refugee crisis. Its underpaid employees in South Sudan and South Africa are prone to abuse or accidents because the company simply won’t spend enough on training. Last year on Manus Island in Papua New Guinea, an Iranian asylum seeker, Reza Barati, was murdered while in the supposed care of the company and the Australian government. Nobody has yet been brought to justice.

In Greece, years of harsh austerity have left the country economically broken. The collapsed health care system is keeping citizens sick and unable to access vital medicines. Instead of relieving this pain, the European Union has advocated mass privatization, including of water and airports, which will enrich the outsourcers but do nothing to help the Greek people. The governing party Syriza has struggled to fulfill its anti-austerity election commitments, and the far-right, neo-Nazi party Golden Dawn continues to draw support.

Disaster capitalism’s logic is clear as long as the system, according to Rolling Stone’s Matt Taibbi, is “rigged.” This logic is on clear display in the U.S. as well. Since the global economic meltdown in 2008, financial firms such as Bank of America received tens of billions of dollars of government money to save them from collapse while committing vast fraud in the process. Virtually nobody was punished. Former U.S. Attorney General Eric Holder, legally obligated to hold these companies to account, didn’t just squib his responsibility, he even returned to corporate law firm Covington & Burling after leaving office earlier this year to work again with corporations on its client list that he failed to prosecute when in office.

While the financial elite plays with each other’s toys, the American population has rarely been so reliant on state handouts. More than 1 in 5 children need food stamps. The middle class often struggles to pay rent, students are burdened with debt, and Americans, according to studies, have little hope for the future.

To defeat the current stasis requires challenging business as usual. Imagine a political system in which doing business with such outlaw outfits was either banned outright or reduced to a tiny trickle. Corporations such as Chemonics and Dyncorp, with dubious records both in the West and in developing nations, should not receive further governmental contracts unless they implement drastic internal changes to ensure accountability. That would be a massive first step in reducing the ability of disaster capitalists to get what they want from the political system.