Russian Private Military Contractors: A Case Study of Ukraine and Syria

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NATIONAL RESEASRCH UNIVERSITY - HIGHER SCHOOL OF ECONOMICS

UNIVERSITY COLLEGE LONDON

Russian Private Military Contractors: A Case Study of Ukraine and Syria

Master Dissertation by

Margot McDonnell

Student Number: 13001208

Master Programme `International Relations in Eurasia'

Field of Study 41.04.05 International Relations

Moscow, Russia 2018

Following the conflicts in Ukraine and Syria, Russian private military contractors have generated unprecedented levels of press coverage on their controversial activities. PMCs are a popular topic, yet not much is known about them, especially the Russian industry. This is due to the fact that the PMC industry is shrouded in secrecy, too opaque to be clearly explained or analysed and unnecessarily sensationalised by the press for propaganda purposes in conflicts. This dissertation will unpack exactly what the modern PMC industry consists of, where Russia fits into this and why Russia decided to use PMCs in some of the most controversial conflicts of modern times.

In order to do this, a comprehensive definition of the industry is necessary, looking at the most established scholars, such as Peter Singer, Malcolm Patterson, Christopher Kinsey, Molly Dunigan, Sean McFate and Deborah Avant. By defining the industry, it is possible to uncover the cogs behind the machine that is generally defined as the PMC industry. By categorising PMCs based on function their position in the greater military structure becomes clearer. The paper then analyses the history of the PMC industry in order to identify conditions necessary for their use. Examining Sean McFate's concept of neomedievalism and drawing upon it throughout the dissertation shows how neomedievalism has a crucial impact on all aspects of the modern PMC. As a result ofneomedievalism, issues faced by PMCs in the past are reoccurring, with little prospect of solution to this day. strategic military industry

The rise of PMCs has been caused by a change from Westphalian to neomedieval warfare, as well as how there are different demands for modern conflicts. These might include increased expenditure, technical specialisation and a need for covert operations to shield the public from the unsightly realities of war and interventionist foreign policy. Comparing Russian military structures with the US, especially regarding modernisation and incorporation of PMCs into foreign policy, will delve deeper into these aspects. Examining how the US have undertaken their journey to becoming market drivers in the PMC industry will illustrate why Russia has undertaken changes in their military, especially following the 2008 Georgian war. Russia has taken PMC use one step further and has used them in hybrid warfare. This can be defined as “the systematic use of varied means that, in the aggregate, have the capacity to undermine and seriously weaken an adversary without crossing established thresholds that would trigger a military response.” This style of warfare is central to modern Russian military strategy.This chapter will argue that the use of PMCs has a positive effect on Russian state military activities and that they play a crucial role in modernisation, hybrid warfare and strategy.

This will lead to the analysis of ethics and regulation of the PMC industry and to what extent the regulation of this industry is in fact, possible. This chapter will use Amy Eckert, Olivia Allison, Malcolm Patterson, Sean McFate and Christopher Kinsey to look at key concepts such as rights of contractors, issues of morality and accountability. There are several issues faced in regulation, such as the lack of certainty on legal jurisdiction, the diverse interests of states, the UN and non-state actors. This culminates in issues of the past still haunting the modern industry today, causing inefficient contracts, lack of supervision and a lack of risk assessment for contractors themselves, leading to poor quality outcomes for all involved.

Exemplifying and building upon previous factors, case studies of Ukraine and Syria will be undertaken, looking at how the involvement of the Russian PMC Wagner has affected the effectiveness of the Russian military within each conflict using a framework on military effectiveness by Molly Dunigan. Further factors influencing the use and effectiveness of PMCs are neomedievalism,changes in Russian military structures and the context in which they operate. From the analysis, the main benefits and limitations wrought by PMCs in each conflictare deduced. In this chapter, it was necessaryto mainly rely on media articles and intelligence blogs, as there is little up to date information on these ongoing politically sensitive conflicts. This chapter argues that Wagner was used to implement hybrid warfare strategy to win the neomedieval conflict in Ukraine.The use of Wagner, especially in Crimea, was achieved in an exemplary manner, however, the reproduction of this tactic in Syria was less effective.

In undertaking this research project, it was necessary to rely upon open source materials, from books and articles to various media outlets and state websites. Methods used have mainly consisted of textual analysis and literature review.Due to the sensitive nature of this industry it was important not to compromise personal safety. Primary sources are extremely difficult to access and carry unacceptable risks. This appears to be a recurring theme with other researchers, who have limited their investigations to either the legal status of armed contractors on the battlefield, poor contracts and the PMC experiences in Afghanistan and Iraq. PMCs are notoriously media-shy, opaque and generally inaccessible, which makes the job of academics incredibly difficult. The demonising and sensationalist nature of press coverage often misses out the potential positive sides of the use of contractors, which the industry itself may benefit from through increased understanding and balanced analysis. As much of the data used today is old, current research into the industry is ruminating in a cycle of self-analysis instead of shedding any new light onto the workings of PMCs. The dire need for new cases and the lack of any study on PMCs from BRICS or other developing nations was why the studies on Syria and Ukraine were chosen, despite having limited information. Sources related to the US industry and other PMCs were applied to the Russian industry to alleviate this issue. It is important to see Russian PMCs within the context of other firms in order to see how Russia is different and to gain insight into why they are now being used.

Chapter 1 Definition and Function:

One of the key issues in the study of PMCs is the lack of a coherent and universal definition. This is further compounded by the lack of accurate information due to the covert nature of PMC activity and finding out what services a PMC provides is extremely difficult. The definition of PMCs is so complex that the US congress even conducted an investigation into the matter, leading them to define private security functions as the guarding of personnel, facilities or properties or any other activity with armed personnel. This definition is far too broad and does not seek to differentiate PMCs from any other security or mercenary company.This chapter will unpack what services PMCs provide, how they fit into the global system and how they can be categorised. It is crucial to the study of private force to define their constituent parts in order to understand how the industry works, particularly regarding regulation. First of all, PMCs must be distinguished from other non-state actors such as private security companies, rebel groups, bandits or state soldiers.

There are few generally accepted definitions within the industry, even of the most basic terms. However, there have been some attempts at definition of PMCs which merit examination. It is not possible to base definition on customers, as companies move between state and commercial clients. The most widely used definition of PMCs is the “tip of the spear” typology developed by Peter Singer, which makes the distinction between categories based on the range of services, level of force and proximity to the lines of battle, with Military Provider Firms being the tip of the spear.

These categories are as follows:

Table 1.1. Peter Singer's Tip of the Spear Typology

This definition provides a clear analysis of what services companies provide, but it may not be useful in terms of modern, neomedieval warfare, which has no tangible battlefield as in previous Westphalian models of warfare. Furthermore, the private military industry is forever mutating and adapting to new demands which means that it is increasingly common to offer services which span all three categories, meaning that the aforementioned categorisation is now obsolete. It is however useful in seeing how private military services are structured and what they offer.

A more modern definition looks at the contracts firms take on as the unit of analysis. This allows firms to be defined on a case by case basis which makes more sense considering the ever-changing nature of the industry. This can be done by dividing the industry by internal (policing, intelligence services and static defence) and external security (combat operations, military advice, training and logistical support). This is helpful in differentiating what happens inside and outside of a state, however, the usefulness of this is limited in an era where the importance of states is declining and weak states blur the lines between internal and external affairs.

However, Kinsey's definition ignores state boundaries and battlefields to focus on the object to be secured and the means of securing the object. This may be more relevant due to the fluidity of modern state boundaries and the fact that modern wars lack the traditional concept of a battlefield. The object can be public or private, whereas the means of securing the object is either lethal or non-lethal. This definition allows for distinguishing between PMCs themselves and distinguishing PMCs as being outside of or within state-sanctioned methods of violence.

Overall, this dissertation will use Sean McFate's definition of PMCs, which encompasses the key features of the above definitions. He describes PMCs as having a profit motive, corporate structure, working abroad, defeating enemies through violence with no desire for law and order and the use of lethal force. It is also important to define PMCs on a contract-by-contract basis, as capabilities and actions often vary on demand. Only by using this approach can mercenaries be identified, the rationale behind their use established and the legality of their actions be examined.

Variation Within Private Force:

On the other hand, it can be useful to examine the spectrum of private force to see how to distinguish PMCs from other forms of private force. In the table below, it can be seen that PMCs can be distinguished by their private commercial nature and the combat services provided, as well as the fact that they tend not to work with criminal elements.

Table 1.2Patterson's categorisation for types of private force

By expanding the Private Military Company category, the different types of Private Military Contractors can be examined:

Table 1.3. Kinsey's Categorisation of Private Military Companies

Delving even further into the category of PMC, it can be argued that there are two different types of PMCs, mercenaries and military enterprisers. Military enterprisers can be defined as companies which raise armies rather than command them. This involves recruitment, training, equipment and fielding of whole regiments to fight for clients. Most modern PMCs follow this mode of operation. An example of a company who does this would be DynCorp, which was hired to develop and train the Afghan National Army and Police for a US contract of $1bn. On the other hand, mercenaries are private armies which can wage autonomous offensive military campaigns and force projection. Arguably, there are no modern mercenary firms, but an example of a recent mercenary firm is Executive Outcomes, which conducted independent military campaigns in Africa in the 1990's. As the market leader, the US has shunned mercenaries, which has led to their absence from the modern market for private force.

Furthermore, it can be argued that mercenaries are the most controversial form of private force and are subject to more scrutiny than other forms of force in international and state law. Military enterprisers ultimately require people to fight for them and these people are arguably undeniably mercenaries. However, when defining a mercenary as an individual, the Geneva Convention definition of a mercenary is so restrictive yet imprecise that nearly nobody falls into this category. The clearest definition of a mercenary is a professional soldier whose conduct is dictated not by membership of a political community but by the desire for financial gain. Interestingly, Russian sources refer to PMCs as Military Provider Companies, which emphasises overt military services including combat, which is banned under Russian law. This defines Russian PMCs as being more akin to mercenaries than military enterprisers.

These two different groups usually adhere to trends regarding the company's success on the market. Stronger PMCs such as Executive Outcomes and Sandline are de facto standing mercenary armies organised as multinational corporations. Their modus operandi is to seek out conflicts, negotiate with the client and deploy their army using lethal force to accomplish the goal set out by the client. Companies which are typically weaker such as Blackwater are military enterprisers, which bolster a state's own military or build forces from scratch rather than using their own standing army. However, it is common for companies to switch between roles depending on demand and resources available.

It is important to differentiate between the different roles of PMCs in order to correctly define the company. The differences in companies shows the wide spectrum of private force and demonstrates how it is difficult to regulate the industry without clear information on a contract-by-contract basis.

Roles of PMCs in Strategic Theory:

It is also important to outline what roles PMCs can play in strategic theory, as it can shed light upon how the use of a PMC may be necessary in some situations over others. For example, one would not use state troops in a former colony in order to secure influence on the ground as it would create a hostile environment for both locals and soldiers.

Table 1.4. Roles of PMCs in strategic theory

These roles show the functions of PMCs which can provide a variety of services ranging from aggressive privateering to more subtle infiltrating. These roles are drawn upon throughout the dissertation.

Chapter 2 History of the PMC Industry:

This chapter will examine the history of private force from its beginnings to its medieval heyday and its current resurgence. It is crucial to understand how the industry evolved in the past to understand the factors behind its present resurgence. Furthermore, it will also examine the concept of neomedievalism and how this can be used to examine the changing nature of warfare in the 21st Century. The conditions are necessary for a revival of private force according to neomedievalism will be explored, as well as how this reflects fundamental changes in the nature of state power. This chapter will also identify the conditions necessary for neomedieval warfare and what is necessary to win a neomedieval war.Finally, it will examine how advances in technology and globalisation have contributed towards the resurgence of the industry for private force.

Neo-medievalismcan be defined as the resurgence of a medieval environment.The criteria for neomedievalism are as follows: the technological unification of the world, the regional integration of states, the rise in transnational violence, the disintegration of states and the restoration of private international violence. With the advent of information technology and the internet, the world has never been so connected. Furthermore, the rise of regional unions such as the European Union, African Union, Arab League and Commonwealth of Independent States have pointed towards increasing regional integration. Now nonstate actors increasingly pose the main threats to security worldwide, such as ISIS, Al-Qaeda and drug cartels. It can be argued that these groups thrive due to the weakness of the states they come from, such as Afghanistan and Iraq. The growing weakness of states encourages the rise of NGOs, the UN and TNCs. Neomedievalism highlights the reorganisation and redistribution of power in the international system from states to nonstate actors. The loss of state sovereignty re-orients international relations towards an unstructured system of overlapping authorities and allegiances.

This disintegrated state legitimacy is similar to the historical origins of the industry. The first recorded beginnings of the private military industry was by the Egyptians in 1479 BCE, when they began to use mercenaries instead of state armies for the next 700 years. This first occurred due to the wealthy Egyptians who did not want to fight providing the demand, whereas large numbers of poor and displaced tribes provided the supply of soldiers. However, the real birth of the private military industry occurred in Northern Italy in the 11th century due to the newfound communication and transportation networks which were available to these city states. This allowed for the importation of skills from the Ottoman Empire as well as more developed areas of the world which allowed the city states to rapidly expand their commercial interests. This extra wealth created by such commercial activities enabled Italian city states to pay mercenaries to fight for them, much like the Egyptians before them.

Additionally,there was also an economic aspect to this shift towards private force. Taxes paid for soldiers who then paid the money back into the town by using their wages locally. This privatisation of the military also led to increased efficiency, as officers were promoted on their ability to perform well rather than their personal ties to local officials. This division of labour was accentuated by the demand for specialised military skills. Knights were unable to fight against new forms of warfare on the battlefield and therefore required the purchase of professional military manpower to win these new wars for them. This need for specialised military skills can be seen today, with the advent of increasingly complex weapons which require high levels of technical skill to operate.

Moving forward, the advent of the military revolution occurred, which increased the scale of wars, introducing linear battle formations, increased concentration of firepower and the use of the momentum of cavalry which fundamentally changed the nature of warfare. The advances in the art of warfare were brought into practice by mostly mercenary armies. The cost involved in bringing in these new military practices meant that it was too costly to disband and recruit new armies for each campaign, which led to the formation of standing mercenary armies.

However, the success of these military campaigns meant the consolidation of power within the hands of increasingly fewer monarchs, which meant less demand for private warriors and thus contributed towards the demise of private warfare. In addition to this, advances in technology involving improvements in transportation through the advent of fossil fuels removed limits on the ability for states to choose the location and scale of their wars, as well their ability to supply troops. The industrial revolution brought about the division of labour on a large scale, which meant that the numbers of men and the cost of equipment needed exceeded the scale mercenaries could provide, which then made them obsolete. This then concentrated power back into the hands of the state, as only states could provide the resources necessary for such large scale wars.

The Resurgence of Private Force

It can be argued that there is now a resurgence in the use of private force beginning with the wave of decolonisation in the 1950's and 1960's. This provided an incentive for colonial governments to become involved in the struggles for independence whilst retaining a covert presence, as well as diversifying demand. The use of mercenaries had a significant strategic impact on the direction of post-colonial wars. An example of this is the presence of British bought mercenaries during the decolonisation of Yemen in order to help to retain British influence within the region. The first modern PMC, WatchGuard International, registered in Jersey, was formed in 1965 by SAS veterans and closely followed the military enterpriser model, whilst working with the British government. The British government continued to use mercenaries to promote insurgency in decolonised regions and policies which countered their official position of neutrality. Having seen the use of mercenaries as a way to undertake controversial operations whilst being able to deny state involvement, it separated the British government from any responsibility. Furthermore, the fragmentation of sovereignty into the hands of multiple actors, as well as small, weak states is a modern day reiteration of medieval Italian city states. This provided the impetus for the resurgence of the use of private force by private companies to protect assets from weak states such as with Shell and Nigerian oil, local warlords or the UN.

However, the 90's provided the perfect storm of international events for the boom of the PMC industry. The fall of the Apartheid regime brought about a large supply of highly trained soldiers and military equipment which led to the establishment of the first highly successful standing mercenary army firm moulded after the condottieri - Executive Outcomes. Not only did the fall of apartheid provide supply of soldiers, but the end of the Cold War unleashed a global storm of instability. This combined with a 40% drop in the US military budget by the Clinton administration led to an even larger pool ofexperienced ex-military personnel that the new private military industry needed to grow. Companies such as Executive Outcomes and Sandline International were able to conduct operations on a scale equivalent to state military operationsdue to their ample resources. An example of this is Sandline International's successful use of lethal force to secure peace in Sierra Leone and Angola. However, the end of the Cold War had a more limited impact on the Russian and Post-Soviet private military industry. The few Russian firms which appeared during this period such as Alpha, were similarly heavily linked to state military and intelligence services. The brief period of the weakening of the Russian state during the 90's meant that Russian firms flirted with international contracts, such as the corporate linkage of Alpha with the international Armourgroup Firm. However, the international export of Russian PMCs has been largely limited due to the fact that US and British firms had already established a monopoly on the market as well as the fact that the Russian firms are under much more state control. This can be seen by the fact that Russian contractors are more often seen fighting alongside national forces in conflicts such as Chechnya and defending strategic facilities in Azerbaijan, Armenia and Kazakhstan.

However, whilst Russia was only just taking it's first steps into the world of privatisation, in the rest of the developed world, the privatisation revolution provided the logic, legitimacy and models for an increasing privatisation of state military forces. The US took initiative in establishing itself as a leader in the private military industry from the 90's onwards. For example, such an increase in the use of contractors can be seen for example during the first Gulf War, where the ration of US troops on the ground to the private contractors was 50:1. By the Second Gulf War, that figure changed to 10:1. Contracts increased vastly in magnitude, for example, Halliburton's Kellog, Brown and Root (KBR) received$10.8bn under the US Army's Logistical Augmentation Program contract. This gave the US the upper hand as shapers of business practices of the industry in its developmental period. This means that now other firms follow US practices in order to gain more lucrative contracts from the US government, as they are the biggest employer for private force. This poses an issue for Russian firms, as it would be fundamentally impossible to follow US practices or even to consider working for US employers, as this would never be allowed by the Russian state. This is because the siloviki who form the backbone of Russian foreign policy, and whose former employees fill the ranks of Russian PMCs, have been formed by Cold War thinking, with Russia and the US as enemies. Even though PMCs are supposed to be purely motivated by money, this is not always possible, as political and security risks mean that it is not always possible to be eligible for certain contracts. For example, employing a former FSB agent for a politically sensitive US operation abroad would possibly leave the US open to sabotage. Furthermore, the US is more likely to recruit from a labour pool which shows interoperability with US military practices. There is limited scope for joint US and Russian military exercises, which means that attempting to reconcile different military styles would be highly complex in the private sphere.

However, Russia has been generating a demand for private security in its own right as it familiarises itself with privatisation and the PMC industry. In the 2000's, new Russian firms such as Tigr Top-Rent Security and Redut-Antiterror have been used in Iraq, Afghanistan and Africa in an attempt at developing the industry. However, Russia has a long way to go in catching up with the US. US contracts for security and non-security functions have increased from $165 bn to $414bn. Seeing that contractors consisted of 71% of the US military workforce in Afghanistan, it is evident that there is a shift towards high-value military contracting. The market's global value ranges from $20bn to $100bnannually, which is a significant figure for Russian firms to be missing out on. It can however be argued that the use of PMCs will grow as Russia's privatisation revolution continues. It can be argued that Russia is approaching the issue of demand in an alternative way for its contractors. As the main market consumer, the US, is unlikely to purchase the services of a Russian PMC, it is up to Russia to seek opportunities. It is nearly impossible to forecast for the next war to anticipate demand, therefore it can be argued that Russia is responsible for its own demand as it has few other potential customers for lethal force contractors.

This provides a solution to Russia's conundrum of how to maintain the monopoly on state power, whilst still developing its PMC industry. For Russia, national interest and national control remain synonymous. This is at odds with the rising trend of globalisation which is spurring on the spread of international private force. The improvements in transport and technology such as planes and telecommunications can be likened to the beginnings of development of the private military industry in the middle ages, with the dawn of venetian trade which laid the foundations for the beginnings of globalisation in the middle ages. Modern technology is making borders less relevant and therefore states less powerful. This is a concern for the Russian state, which is founded on a strong state ideology. Now that states cannot control financial controls across borders, it is impossible to have complete control over the economy, even in isolationist states such as North Korea. By monopolising demand for domestic PMCs, Russia maintains its monopoly on power and adapts to neomedieval conditions.

It can be argued that the rise in international organisations has contributed towards the recreation of neomedieval conditions. For example, the Council of Constance in 1414 pooled the sovereignty of states to overrule any sovereign including the pope. It can be argued that the modern day version of this is the UN, which has an increasingly important impact on the activities of states. The chivalric orders of the past such as the Knights Templar, merchant guilds and mendicant orders such as the Franciscans or Carmelites were the older versions of modern day NGOs such as Oxfam, TNCs such as Walmart and illicit groups such as drug cartels and Al-Qaeda. These new transnational organisations are rising in number, from 1083 one hundred years ago to over 40,000 today. However, unlike the transnational organisations of the past, such as the East India Companies, most modern transnational organisations are not quasi-state owned, but instead completely private. Their allegiance is to global shareholders and not to queen and country. However, Russia is one of the few states clinging onto the Westphalian system. During the privatisation period in the 90's, state companies were privatised, however, the state maintains de facto control over these firms and the oligarch shareholders are under the thumb of the Russian state. This means that Russian state sovereignty is not as fractured as in the rest of the world. This has also been achieved by insistently supporting the right to self determination and to uphold the sovereignty of state in the UN.

This chapter has traced the origins and evolution of the private force industry from its inception to the present day. Issues which have been faced in the past have seen a resurgence as similar societal conditions begin to appear in the form of neomedievalism. The modern world has once again seen the technological unification of the world, the regional integration of states, the rise in transnational violence, the disintegration of states and the restoration of private international violence.The main issue that states must contend with is the fracturing and overlapping of sovereignty.Russia has grappled with this issue in a unique way, by encouraging privatisation whilst maintaining an element of state control. However, globalisation has increased hundred-fold with the advent of telecommunications, the internet and improved transportation, making it increasingly difficult to maintain this system.

Chapter 3 Effects of the Industry on Modern Warfare and Military Structures

In addition to the factors mentioned above, PMCs can be argued to be a result of the change in modern warfare. This chapter will argue that non-state-actors (NSAs) have carved out the future of warfare, resulting in terrorism, insurgencies and ethnic cleansing. Furthermore, it will discuss that in order to respond to this new type of warfare, technology and military specialisation plays an increasingly important role, as battlefield combat is less and less commonly used. As technology is often expensive, it is largely contracted out when possible. It will argue that as the US is the global hegemon and forerunners in both economic policy and use of PMCs, liberalisation of markets globally follow the US pattern, which results in the majority of areas in the military being contracted out. On the other hand, it will argue that Russia, having been tied to old Communist methods for so long, has seen an overhaul of its military following the 2008 invasion of Georgia. Increased international visibility of military operations as a result of globalisation and improvements in technology provide a market for covert forces which had never existed on such a scale before. It will explore this demand which has fuelled a recruitment crisis in state militaries in both the US and Russia, as well as souring relations between PMCs and state militaries. Furthermore,it will examine the possible detrimental effects towards public engagement with war and the democratic process, which begs the question as to whether PMCs are effective enough to balance these issues.

Firstly, it is important to establish the causes for the dramatic rise in the use of PMCs. To do this, it is necessary to return to the concept of neomedievalism. Many of todays conflicts are fought between a variety of state and non-state actors for ideological causes or resources, rather than for territory. For example, Al Qaeda fights to impose its interpretation of Islam, and MS-13 fights for control of the illegal drug trade; they do not fight to become a member of the society of states. The nature of the enemy and their tactics, mean that traditional forces cannot use Westphalian tactics. For example, the US was defeated even with its superior technology, such as when it bombed Afghanistan and during the Battle of Mogadishu. The real reason for this failure, is that current military forces lack capability in dealing with phase 0 and phase 4 operations, which are key to winning neomedieval conflicts. This is because Neomedieval wars are without a clear beginning or end, they do not have battlefield victories and tend to continue on a low level for generations. As a result of this, militaries need greater emphasis on civilian capabilities. The turning point for the US military came during the war in Afghanistan, during which the military finally realised that force structure needed to change. This can be seen by the advent of the National Security Presidential Directive 44 and the Defence Science Board Task Force on stability operations, which decree phase 4 post conflict and stability operations a strategic imperative on par with combat operations. However, whilst most state militaries were focussed on phase 3 of combat operations, PMCs had already learnt the skills needed for phase 0 and 4 and sold these skills back to state militaries.

It can be argued that due to the huge demand for these skills and the existence of specialised forces available, it was a rational decision to turn to PMCs to fill this void. Even US government attempts to train state troop with these skills failed due to the already robust presence of contractors in Afghanistan. As many of these skills can now only be found within the private sector, they are considered as proprietary knowledge and are difficult to transfer to the state military. With the US as market drivers, they have created a system of supply and demand which now extends to other states.This had a limited effect on Russia until 2008. Following the fall of communism, Russian shock therapy did not extend to its military, as within the Russian psyche, the military is the backbone of the country and cannot be touched by privatisation. However, the turning point for Russia came after the 2008 invasion of Georgia, which forced Russian military officials to realise that the armed forces had nearly exhausted modern armaments and equipment inherited from the Soviet Union. Russia then began an active modernisation programme. This fundamentally focussed on transforming the armed forces from the Soviet model of a large army of moderate quality to a compact, high-tech version, optimised for comparatively small-scale, short, intense conflicts. The new strategy is to achieve operational goals in a short period of time, then to de-escalate and secure the gains made, via the threat of nuclear weapons use if necessary. The changes that have taken place can provide an insight into how Russia sees the future of warfare. The new emphasis on offensive operations in Russia's near abroad and high-end warfare against opponents armed to Western standards whilst cutting defensive land-based forces, shows an increased reliance on hybrid warfare strategy.Conflicts aimed at achieving strategic goals in a short period of time in phase 0 of warfare are the most effective way of winning a neomedieval war. The decline in land-based forces frees up the budget to spend more on specialised services such as contractors.

Similarly, the end of the Cold War had a huge impact on both supply and demand of experienced soldiers. As developing nations were destabilised by Cold War activities, the end of the Cold War created a huge pool of experienced, unemployed US soldiers due to Clinton's 40% drop in the military budget. As the supply of experienced soldiers grew, demand also grew for PMCs in developing countries, which created a perfect storm for the advent of the modern PMC industry. An example of this is the US firm MPRI which worked to train and equip forces in Bosnia and Croatia, as well as DynCorp which was contracted as a “peace verifier” in Kosovo. Russia also experienced a similar trend, whereby Russia was largely an exporter of force due to the enormous quantity of weapons, equipment and ex-military personnel who no longer had a role in Russia following the end of the Cold War. However, due to suppression by the state out of fear that PMCs would usurp the state monopoly on power, homegrown PMCs have not been permitted until 2014. As a result of this, unemployed Russian soldiers would fight for foreign PMCs.

However, now that there is a renewal of Russian military capabilities, demand for recruits in the domestic military is competing with the temptation of higher salaries and better conditions in foreign PMCs. With Russia's demographic changes, poor morale amongst recruits and poor contract conditions putting a strain on existing recruitment and retainment of troops, the attraction of better salaries and conditions is drawing the best and brightest into private industry. It can be argued that due to this recruitment crisis and ineffective methods used to recruit soldiers, the Russian state is instead enticing recruits to join Russian-run PMCs as opposed to foreign PMCs. This ensures that the best and brightest remain under the umbrella of the Russian state, as the first major PMCs allowed by the Russian government, Wagner and Slavonic Corps, have participated mostly in conflicts with a high level of relevance to Russian foreign policy, such as in Syria and Ukraine.

It is also important to see how PMCs fit into Russian strategy. In terms of geostrategy, Russia sees itself as a bridge between emerging markets, with its vast underpopulated territory under constant threat of invasion in need of strong central authority. It emphasises Russia as a Eurasian centre of power. Russia's strategic culture emphasise how historical experiences influence modern day decisions. The use of contractors from post-Soviet nations in conflicts which take place in various post-Soviet regions, such as Chechnya, Tajikistan and Ukraine taps into both Russia being a centre of regional power and its historical experiences of the Soviet Union. This has a strategic impact in that it emphasises Russia as a centre of Eurasian power, in that Eurasian citizens are willing to work for the Russian state to implement policies which may punish states who wish to draw away from Russia as a centre of power. Russian language definitions of strategy focus more on the art of war, focussing on preparation for war and its conduct as well as attainment of wider aims by applicable means. This means that the use of military means to achieve goals is an integral part of Russian strategic culture. PMCs may be the most effective way to achieve these goals, as can be seen by Crimea.

PMCs can be argued to be more beneficial to certain types of conflict. Russia has been able to use contractors to implement their strategic goals. At times, state forces are an inappropriate choice for combat operations. For example, in Ukraine it was necessary to confuse the enemy through unidentifiable troops, as this gained time to achieve strategic objectives such as the seizure of Crimea whilst Western allies scramble to find out who is responsible. This is a demonstration of cloaking the state, one of the key strategic purposes of PMCs. In the US for example, contractors were used in Iraq and Afghanistan to infiltrate, set the scene and trailblaze. This is because they had a need for relationship building in phase 4 of these conflicts. As it took so long for the US to understand that Westphalian tactics do not work in neomedieval wars, it was unable to implement PMCs in the same way as Russia, as they were past phase 0.

In domestic conflicts, PMCs can be more effective than state armies, as they are more interested in their own profit than political ideals. An example of this can be seen with King Henry II, who engaged mercenaries to suppress the great rebellion of 1171-1174, because their devotion lay with their paymaster rather than with the politics of the revolution. In fact, PMCs are more disciplined and effective than public forces in weak states such as Sudan, Somalia, Myanmar and Tajikistan. This shows that PMCs are more useful domestically either for weak states or for instances of civil war, when an unbiased force is needed. In the case of Russia, this would not be applicable, as Russia does not use contractors who originate outside of the post-Soviet region, as this would undermine Russia's strategy as a position of authority in the region as well as the state being the strong central authority. If it did have to resort to this method, it would have to source troops from allied states outside of the region such as Sudan, China and Equatorial Guinea, but this would be an unlikely move.

One of the main benefits of PMCs is their diversity of personnel. A company may be run by US leaders, but they rarely have a majority nationality in terms of troops on the ground. For example, in Iraq only 26% of contractors are US citizens and in Afghanistan, the number is only 14%. This means that it is easier to conduct phase 0 and 4 operations as it is harder for local insurgents to wage ideological warfare against a diverse force of contractors with no ideology or majority nationality than it would be against a state military such as the US. Due to the diversity of the employees and the lack of ideology or national loyalty involved, such troops are ideal for covert operations. Since the end of the Cold War, PMCs have been used for clandestine operations due to their plausible deniability. States are increasingly relying upon PMCs to conduct covert operations which were previously reserved for the secret service. Due to the rise in globalisation and technology, conflicts are increasingly visible. The unpalatable nature of war means that there is now a demand for secrecy in warfare and if this cannot be achieved, deniability. The live footage of US troops being killed and mutilated in Somalia has turned the public against war, making any propaganda effort to send troops abroad increasingly difficult. PMCs can fulfil this demand to rebrand warfare. Through technology such as drones and contractors, states can limit the spilling of their own blood, thereby sanitising warfare and rebranding it “humanitarian intervention,” as was the case with the Balkans. A further example is Iraq, as hiring PMCs there was arguably not about saving money, but avoiding tough political consequences concerning military needs, reserve call ups and the human consequences of war.

However, money is a main motivator when it comes to the hiring of PMCs. PMCs are fundamentally much cheaper than public armies. For example, the cost of operating an infantry unit in Iraq was $110m, while hiring the same size unit from Blackwater to perform the same tasks during the same time period was only $99m. Furthermore, as optimistic politicians see the future as involving more peacetime than conflict, it can be argued that they are gambling with the structure of the armed forces themselves. When conflicts end, the contracts can be ended, essentially saving the government the $60m it would have taken to fund a state unit in peacetime. Although governments may see contractors as bolt-on assets they can use as and when required, PMCs are now in fact a fundamental part of force structures. This can particularly be seen when it comes to expensive specialist services, much like 14th century balestrieri crossbowmen, Mi-24 heavy attack helicopters flown by Executive Outcomes in the late twentieth century are the modern equivalent. Much in the same way one might hire a tuxedo or ballgown for an event, heavy technical services are being purchased for specific conflicts. The time and cost involved in equipping, training and sustaining these specialised units is available to only the wealthiest of armies, making it more cost efficient to hire these capabilities as and when needed. The market is increasingly exacerbating this issue, as weapons systems are becoming so complex that as many as five different companies are often required to help just one military unit carry out its operations.

Although contractors may be a cheaper alternative to state military units, there is a large variation as to the quality of contractors. For example, the commission for wartime contracting found that at least $31bn and possibly as much as $60bn was lost by the US to contract waste and fraud in Iraq and Afghanistan, much of which was avoidable. Not only is this a waste of public money, but poor contracts can undermine the effectiveness of strategy. For example, in 2010, the NATO-led International Security Assistance Force (ISAF) mission to Afghanistan determined that PMCs had failed in their contracts to train and mentor Afghan police. As the program did not provide the police with the necessary skills to successfully fight the insurgency, this hampered the ability of the DoD to fulfil its role in the emerging national strategy. However, the US military has now acknowledged its dependence on contractors, but measures taken to reduce outsourcing do not apply to PMCs in conflict areas, which is arguably the area which needs the most review. This overreliance on PMCs creates unreasonable risks to mission objectives, eroding federal agencies' ability to perform core capabilities and overwhelms the government's ability to manage contractors. The contracting out phase 0 and phase 4 operations poses a strategic risk, as there is no guarantee as to the quality of the PMC. It is hard to tell the details as to whether or not Russia has learnt lessons from the US experience, but a Blackwater-style scandal has not yet taken place.

Although the marketplace allegedly disciplines bad mercenaries, such as when Blackwater saw its business with the US plummet following the Nisour Square incident in 2009, there is little public scrutiny of the conflicts where PMCs are paid for with taxpayer money. Arguably, the more the costs and casualties of violent foreign policy can be restricted (or hidden from the electorate) the easier it is for wars and military interventions to be pushed through democratic decision making processes. By making war cheaper and more covert, it is easier to enter into war without as many consequences. It can be argued that PMCs reduce transparency in democratic decision making and advantage the executive branch relative to the legislative branch, thus making it easier for democracies to become involved in conflicts. As the financial and PR costs of war will be reduced and other factors remain unchanged, military action seems more likely. This means that democracies will now be able to afford to be less selective when it comes to war-making.