Libyan Conflict: Cost to U.S. Soars above $600M
Business + Economy

Libyan Conflict: Cost to U.S. Soars above $600M

Getty Images

During a meeting in Berlin last week, Secretary of State Hillary Clinton reaffirmed the U.S. commitment to the NATO mission to remove Colonel Muammar el-Qaddafi from power. German Chancellor Angela Merkel, standing by Clinton’s side, agreed that Qaddafi had to go, but refused to commit German military resources to accomplish that goal.

As it becomes clear that the battle for Libya will not be won quickly, the burden shouldered by the United States will increase, both militarily and financially. Other NATO partners such as the United Kingdom and France have recently made drastic cuts to defense spending as part of austerity packages meant to improve deficits in the wake of the euro zone debt crisis. According to experts, this has left both countries scrambling to find the resources necessary to fight a protracted conflict. Diplomatic sources at the Berlin meeting said that Britain could not sustain its level of military action, and that other nations needed to contribute more.

“How long does Qaddafi hold out? He’s
got a lot of gold bullion buried in the desert…
He’s not about to retire to the South of France.”

Only 14 of the 28 NATO alliance members are actively participating in the Libyan conflict. Germany is participating by association only. Contributions by countries outside of the alliance, such as Qatar, the United Arab Emirates and Sweden, are minimal.

U.S. officials said today that the war has cost the United States $608 million from March 19 to April 4. These officials did not specify how much the U.S. expects to spend, and this figure does not include the impact of rising oil prices due to the conflict.

The stated goal of the mission is to remove Colonel Qaddafi from power. But Qaddafi’s triumphant ride through the Libyan capital of Tripoli last week shows that this goal is elusive. Recent reports also indicated that the United States is likely to return to the air campaign against Qaddafi as allies are running short on munitions.

“The big question is, how long does Qaddafi hold out?” said Ray Dubois, a senior advisor at the Center for Strategic and International Studies (CSIS). “He’s got a lot of gold bullion buried in the desert and lots of hundred dollar bills hidden in suitcases. He’s not about to retire to the south of France.”

U.S. Shoulders Majority of NATO Costs
The United States has been the primary funder of NATO since the Cold War, when the alliance was used to counter the Soviet Union and member nations of the Warsaw Pact. The strength of the NATO alliance compared to that of the Warsaw Pact played an important part in the western victory over the Soviets.

Since the end of the Cold War, however, the importance of NATO has slowly ebbed. NATO forces conducted the war in Kosovo, and the alliance has served as an umbrella under which the United States has conducted military operations in Afghanistan. Yet without the Soviet Union, the alliance has struggled to find a permanent role in world affairs.

Despite this struggle, the U.S. has continued to commit billions of dollars to the alliance over the years and pays the largest amount by far, contributing nearly one quarter of all funds. Other NATO members make lesser contributions to the alliance’s civil and military budget, as well as a security investment program.

In 2009 and 2010, the United States contributed $66.1 million and $84.1 million to the civil budget respectively, and has appropriated $90.2 million for 2011. U.S. contributions for the same period for NATO’s military budget were $408 million and $430 million, with $462.5 million earmarked for 2011 spending. The U.S. contributed $330 million and $197 million to the security investment program during this time, and plans on spending $259 million on the program this year.

Germany Takes a Back Seat
The second largest contributor to NATO is Germany, which has committed roughly 15 percent of each budget. Despite these contributions, Germany has refused to participate in the Libyan operation and has a limited role in the Afghan war, placing additional spending burdens on its allies.

Winslow Wheeler, director of the Straus Military Reform Project at the Center for Defense Information, says the German decision not to participate in the NATO mission reflects the current strength of the alliance.

“Nobody attacked any NATO country, so I don’t know why NATO is involved,” Wheeler said, noting that NATO members are only obliged to participate in military conflicts if another member is attacked. “The United States’ adventure in Libya is leading to a place — none of us knows where. That’s how we got involved in lots of situations in which the consensus now is that it was a mistake. The German decision is a more appropriate one than the American decision. They don’t see the rest of the world as their problem.”

Price Tag:  $608 Million and Rising
When the conflict began, many predicted a quick military intervention to prevent Qaddafi from continuing to kill civilians. However, now that NATO has stated the goal of the conflict is to remove Qaddafi from power, there’s no end in sight.

The open-ended nature of U.S. involvement in Libya has raised questions about how much the operation has and will cost. But CSIS’ Dubois says given what is known about U.S. involvement – the use of CIA assets to coordinate air attacks and gain intelligence on rebels and the use of U.S. missiles and warplanes – the cost of the operations is likely to rise high above the $608 million cited by U.S. officials.  “It will be over several billion dollars once this is all over,” Dubois said.

Dubois added that the conflict is likely to cause France and Britain to reevaluate defense cuts announced last year. “The situation in Libya is forcing these countries to revisit these decisions, and that’s not necessarily a bad thing,” he said.

Related Links:
Next Steps to Protect (Huffington Post)
Cameron Lays Down Law on U.N. Action in Libya (Daily Mail)
Pentagon Costs in Libya $608 Million and Counting (Forbes)