Pakistan's military tycoons

The Pakistani military clings to power partly in order to safeguard its vast economic empire
December 22, 2007

Well before President Musharraf imposed emergency rule on Pakistan he was already becoming weary of media criticism. One of those who had felt the force of the general's wrath was the respected defence analyst Ayesha Siddiqa, whose book Military Inc. drew claims from Musharraf that she was an Indian agent. Plans to launch the book in Islamabad earlier this year were disrupted, and Siddiqa, facing harassment from the security agencies, left Pakistan for a time.

None of this prevented Military Inc. being widely discussed in Pakistan. A book dealing with the political role of the army was always going to generate controversy, but Siddiqa's real novelty is her investigation of the military's business interests. Her contention is that the military's desire to stay central to Pakistan's power structure is significantly informed by the need to safeguard these interests.

From its inception, Pakistan was a state with the armed forces at its centre, thanks to tensions with neighbouring India. The first annual budget allocated nearly two thirds of the new state's resources to defence. But border instability alone cannot explain the relationship between military and state. India also had a bellicose neighbour to contend with, yet its military has never played a political role. The civil bureaucracy in India accepted the primacy of politicians and strengthened the ministry of defence as a way of keeping the military in check, whereas in Pakistan the bureaucracy saw the military as a junior partner which could be used to keep the troublesome politicians at bay. India's flawed but functioning democracy is surely a rebuke to those who say that Pakistan is in a part of the world which is not ready for the western ideals of democracy.

The events of 1953-54—dealt with too briefly by Siddiqa—were the pivotal moment when the country started down the path towards military rule. The prime minister, Muhammad Ali Bogra, tried to curtail the powers of the governor-general, Ghulam Muhammad, a bureaucrat turned politician who responded by dissolving the assemblies. Ali Bogra was allowed to stay in power, but only after forming a new cabinet, which included the first commander in chief of the Pakistan army, Ayub Khan. In 1958, Ayub deposed Muhammad's successor as governor-general, Iskander Mirza, and took over the government. Subsequent politicians have failed to learn the lesson that relying on the military to consolidate one's own power is a dangerous game. Benazir Bhutto demonstrated this when she entered into an "understanding" with General Musharraf just prior to her return to Pakistan on 18th October. That her father was hanged by General Zia, the military ruler he had earlier handpicked to serve his own purposes, does not seem to have concerned Bhutto.

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Siddiqa is highly critical of the politicians for allowing the military to appear, in contrast to them, organised and incorruptible. This notion of the military's moral strength was something General Musharraf highlighted in his first speech to the nation on the day he seized power in 1999. He referred to the army as "the last remaining viable institution in which all of you take so much pride and look up to at all times for the stability, unity and integrity of our beloved country." Eleven years of disastrous civilian rule had gone far in erasing people's memories of the horrors of General Zia's time in power.

On the matter of stability and unity, Siddiqa doesn't demur. She sees the armed forces as a group that protects its own and in doing so earns loyalty. But her analysis of how it achieves this brings into question its claims of incorruptibility—and even the definition of corruption. Siddiqa quotes the editor of the Daily Times, Najam Sethi, who points out that "the military bends the rules and makes its own rules so that no one can call it corruption. When politicians do the same, it is called corruption."

One reason for the cohesion of Pakistan's army is its belief that it really is the only institution capable of safeguarding the nation's interests. This belief gains credence from the army's ability to successfully extend itself into areas such as business, agriculture, manufacturing and real estate. Siddiqa categorises these ventures as "Milbus" (short for "military-business"), defined as "military capital used for the personal benefit of the military fraternity, especially the officer cadre, which is not recorded as part of the defence budget."

Siddiqa pays particular attention to Milbus's four "welfare foundations," so called because they claim to exist for the welfare of the armed forces. The list of businesses controlled by these welfare organisations extends from small-scale ventures such as bakeries and schools to large corporations, including commercial banks, cement and fertiliser manufacturing plants, insurance companies and radio and television channels.

Siddiqa's ability to investigate the various aspects of Milbus is hampered by a lack of transparency, but she does provide enough charts and figures to build a convincing case for both the unethical nature of the military's economic empire and the military's inability to function effectively in the business world. She details instances of Milbus corporations relying on government contracts, cronyism and financial bailouts by the state bank to keep them afloat. She also points out instances where Milbus damages existing companies, as is the case with the National Logistics Cell (now the National Logistics Corporation), one of the largest public-sector transport fleets in Asia. The NLC was created by the army in 1978 in response to a bottleneck at Karachi's port, and provides an example of how the army, rather than attempting to address problems within existing organisations, creates its own parallel organisation with better access to those in positions to hand out contracts. The inevitable result is a drying-up of profits for the pre-existing non-Milbus organisations: Pakistan Rail, previously the country's largest cargo transporter, now deals with no more than 3 per cent of the country's cargo, while the NLC deals with 77 per cent.

This matter of resources being channelled away from civilians towards the military comes up time and again. Almost all the officers Siddiqa speaks to feel that the army has earned its right to special privileges. Here, too, lies part of the reason for the loyalty of members of the armed forces—compared to the civilian world, life within the army offers better schools, hospitals, housing, financial incentives and social mobility. Although Siddiqa objects to the lack of transparency, she is not opposed to the idea that military personnel require some kind of welfare system—in fact, some of her strongest condemnation centres on the fact that Milbus profits are enjoyed almost entirely by the officer class.

Siddiqa concludes that Milbus is now so vast that the military must stay at the centre of power in order to safeguard it. The military's stated reason for holding on to power is its professionalism and competence. This image, Siddiqa points out, has found favour with many western analysts, such as Samuel Huntington, whose concept of the soldier-reformer is based on the perception of third-world militaries as "carriers of western cultural norms" in otherwise underdeveloped societies. But Military Inc. makes a strong argument for considering the military model as more feudal-authoritarian than professional, and also points out that Pakistan's many years under military rule have showed no evidence that there is anything to be gained by a politically involved military. How the military should be returned to the barracks remains a more vexing matter, with Siddiqa conceding it will not happen without a wide-scale public uprising backed by the international community.