Military do not just run Pakistan, they own it too


PAKISTAN:All countries have a military but the Pakistani military has a country, runs a joke highlighting the army's power, writes Rahul Bediin New Delhi

The debate over whether Pakistan's omnipotent military, which has directly or indirectly ruled the country since independence 60 years ago, will relinquish control and democratise appears irrelevant, analysts say, because it would jeopardise its proliferating commercial interests.

"A large part of the military's internal economy remains invisible," writes defence analyst Ayesha Siddiqa in her recent book Military Inc: Inside Pakistan's Military Economy.

The hidden economy refers to commercial ventures carried out directly by different segments of the military and economic benefits provided to individual members. It is often said jocularly that all countries have a military, but the Pakistani military has a country.

About 1,200 serving and retired Pakistani military officers - mostly from the army - run a web of banks, transport, road building, communication and construction businesses worth billions of dollars.

The "Fauji" or soldier foundations also operate a private airline, hundreds of educational institutions, power plants, steel and cement factories and even produce consumer goods such as sugar, electronic items and breakfast cereals.

Security sources say personnel drawn from these foundations also worked with the Inter Services Intelligence Directorate (ISID).

Satish Kumar, editor of India's National Security Annual Review says the Pakistan army is not just a defence force, but a ruling class oligarchy with substantial economic interests to safeguard. It is unlikely it will relinquish this role in the foreseeable future, he adds.

Military juntas have ruled Pakistan directly for more than half the years since independence in 1947, appropriating large tracts of hugely expensive urban land at throwaway prices to establish grandiose housing colonies.

During Pakistan's erratic experiments with democracy, the army based at Rawalpindi, the garrison town adjoining the capital Islamabad, and exercised thinly-veiled control over the civilian administrations, significantly strengthening its financial empire.

Pakistanis joke that if every serving and retired military officer protects his own property, then their country would be one of the best defended in the region.

The business interests broadly fall into three categories: those controlled directly by the chief of army staff; the formalised military sector such as ordnance; and the state-owned armament factories managed by the defence ministry.

In addition there are the four charitable trusts that operate autonomously, such as private corporations in which serving and former servicemen run factories and manufacturing units producing a range of goods and services.

The first group includes the National Highway Authority and Frontier Works Organisation, each headed by a two-star officer, and the Special Communications Organisation, supported by the signal corps and the national logistics cell.

Aided by the army engineering corps, the army's road building conglomerate constructed the precipitous Karakoram highway in the 1980s, connecting Pakistan to China, besides laying roads across the country.

While the Special Communications Organisation working with the signals corps wires up the country, the logistics cell is possibly the army's most profitable operation.

Established by former dictator Gen Mohammad Zia-ul-Haq in the late 1970s, the cell's trailer trucks would pick up armaments and ordnance, including assault rifles and Stinger missiles. These convoys then ferried their lethal cargo to the North West Frontier Province and neighbouring Balochistan bordering Afghanistan to Mujahideen groups fighting the Soviet army.

After 1996 this massive fleet of trucks, controlled mostly by Pashtun tribesmen, was effectively used by the ISID to supply the Taliban with weapons, fuel and food.

Intelligence sources said they also transported heroin from laboratories along the Afghan border to ports such as Karachi from where the drug made its way to the West. Pakistani sources said the heroin-loaded convoys were provided unprecedented security and were rarely, if at all, checked.

But the Fauji or Soldier Foundation, the largest industrial conglomerate with an annual turnover of $500 million and profits of more than $41million is "the jewel" in the army's crown.

Headed by a three-star officer, it provides "womb to tomb" facilities for almost nine million retired servicemen that include resettlement and re-employment schemes in military-run cement, power and sugar factories.

The Army Welfare Trust, managed by general headquarters, employs about 6,000 former soldiers and runs the Askari Commercial Bank, one of Pakistan's most profitable.

Like his predecessors, the army chief of staff Gen Pervez Musharraf, who also doubles as president, heads the bank's governing board that comprises senior officers. The trust runs around 25 other projects worth Rs17 billion ($354 million).

Former Pakistan airforce officers run the 27-year-old Shaheen Foundation with an annual turnover of Rs600 million. It operates Shaheen Airways, the country's profitable and only private airline. Naval officers run the Bahria Foundation that manages about 20, mostly civilian, projects.