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. Last Updated: 07/27/2016

U.S. Should Apply the Lessons of Chechnya

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The U.S. military is the best armed force ever built. Yet aside from police actions in its own backyard and Operation Desert Storm, it has not won a major conflict since World War II. It was fought to a standstill in Korea, lost in Vietnam and is well on its way to losing in Iraq and Afghanistan.

Washington should examine how much bang it gets for its buck. Examining Russia's pacification of Chechnya may prove helpful.

Russia's army is arguably the world's worst -- ill trained, poorly equipped, pauperized, frozen and starved. Officers from field commanders to generals abuse their troops, steal from them and use them as unpaid laborers. Hazing is widespread, producing a sordid trickle of murders and suicides.

Professionals fighting in Chechnya may be better, but they certainly didn't defeat local separatists and foreign Islamists. Rather, Russia corrupted Chechnya back into its fold. It found a Chechen clan eager to make common cause with Moscow. Its leader, Chechen Prime Minister Ramzan Kadyrov, commands a feared militia and keeps Chechnya quiescent by rewarding loyalists with federal largess and by brutally suppressing rivals.

Albeit an extreme case, Chechnya is a microcosm of the country -- a murky lawless place fueled by petrodollars and run by former security officers. It may not be pretty, but Russia won -- meaning that Chechnya has been seamlessly reincorporated into the Russian Federation.

If it hopes to restore stability in Iraq, Washington will similarly need to incorporate Iraq into its economic system. Unlike Russia, the United States is the leader of a prosperous, productive and peaceful global economy. An insurgency in Iraq will be defeated only when there are influential local groups cooperating with Washington out of self-interest and identifying their future with a U.S.-built economic system.

The Pentagon is singularly ill equipped to build such system in Iraq -- or anywhere else, for that matter. Along with its vast empire of suppliers and contractors, it is an oddity in the U.S. economic system and a fundamentally un-American entity. With a budget not much smaller than Russian GDP, it doesn't operate in a market environment. Much like the Soviet economy of old, which mined coal and ore to make machines to mine more coal and ore, it is a self-serving and self-contained system. In Iraq, contractors supply every little thing for U.S. troops but have failed to reconstruct Iraq for the Iraqis -- or even provide basic services like electricity.

This contrasts with the success of U.S. business in penetrating international markets by peaceful means. Nowhere are Coca-Cola, Hollywood movies or Microsoft Windows forced upon foreign consumers at the point of a bayonet.

Of all the recommendations of the Iraq Study Group, the most ignored were those proposing that the Iraqi government privatize its oil industry and open it to foreign investment. This should have been the centerpiece of Washington's policy in Iraq.

Even with the current lack of security in Iraq, multinationals will be eager to bid for Iraqi oil concessions, the world's second-largest proven reserves of crude. Oil companies are used to operating in hostile environments, such as Angola and Nigeria. In any case, they are likely to find a more effective way to protect production facilities and pipelines than the Iraqi military and U.S. forces -- not to mention create jobs, build infrastructure and create tax revenues for the government and prosperity for ordinary Iraqis.

All this is beyond the ability of the Pentagon. Worse, the military-industrial lobby, which now includes politically connected contractors, has a vested interest in prolonging the carnage in Iraq. Here, too, a Russian parallel is useful. The reason low-intensity warfare in Chechnya continues is because it allows the federal military and the Chechen government to retain access to war funding from Moscow.

Alexei Bayer, a native Muscovite, is a New York-based economist.