The military in business

You name it, they make it

It was strange when the news began to circulate a week ago, the Pakistan Aeronautical Complex in Kamra, allocated tax money to build aircrafts, has undertaken R&D to produce the Pacpad, Pakistan’s prototype for the Apple iPad, available for $200/piece in the market.

When questioned, managers of the project offered the strange logic of using ‘spare’ capacity and ‘employee welfare,’ but were unable to answer the more important question that how much money went into the project and how was the PAF able to get money allocated from the national budget for R&D on the Pacpad?

Trouble is that everyone knows how the money was allocated but will not say it. Over the last 65 years, the Pakistan’s military has been able to channel funds into building a $10 billion business empire for itself, from money allocated to it through the official military budget.

Somewhere along the line, military generals have channelled money into starting business ventures. In fact, if we were to become sociologists, we could say, there is something in the Pakistani military man’s psyche that makes him a businessman. Somehow, Pakistan’s military man is not satisfied with military work.

The expanse of Pakistan’s ‘milibus’ as Ayesha Siddiqa calls it in her book Military Inc suggests the military controls 7 percent of the national GDP, controls one-third of heavy manufacturing, controls 6-7 percent of private sector assets and owns 12 million acres of land.

The deep entrenchment of military-run, and increasingly retired military man-run enterprise, in the economy has continued to expand. What earlier was an enterprise that expanded from cooperatives to protect Punjab military officers’ families after colonial period recruitment for the World Wars, expanded to include military-run banks, fertiliser factories, cereal factories, cement factories, construction companies, transport companies, insurance companies. “You name it, our military makes it,” appears to be the slogan. If the mere expanse of the milibus is to be considered, the Pakistani military is Pakistan’s best and most successful capitalist.

Amongst the elite classes, it is also believed to be the best land developer – discounting the number of forced dispossessions and walled-in villages left by this apparent land development process. This, of course, is just a brief overview of organisations directly-owned by the military.

On the side, there has been an expansion of privately-owned military business. In the Musharraf period, a large number of army majors and colonels began to retire and set up the hugely lucrative post-9/11 private security industry. While terrorist wrecked the country as a consequence of the military being paid to run America’s war in Pakistan, retired military officers capitalised on the sense of fear produced in society to fill up their financial coffers.

Another aspect has been the move by ex-military men into opening cattle farms, creating a monopoly over the milk and meat market. The military also tried to change its land relations in 2000, when it tried to move the Okara peasants from tenancy to a lease, and produced a peasant revolt which it attempted to quell using military force.

The Pakistan military man lives a dual identity: one, as a military man; two, as a business man. While army officers continue to insist in public that they prioritise the former; facts on the ground suggest the priority is the later. One of the myths circulated once the ‘sacred cow’ of the milibus became public, was that the military is a good businessman.

But even the little information that filters through suggests that even the myth that the army is a good capitalist is questionable. In 2004 and 2005, the Pakistan government subsidised the Fauji Foundation, worth over Rs 10 billion, by $20 million and $25 million. Out of 96 business run by the military’s four largest foundations, only 9 file public accounts. The answer to the question: how much of a burden military business is on the national economy and tax-base is not known.

So while debate over privatising the Pakistan Railways, PIA, the Steel Mills can take place, the debate on privatising the Fauji Foundation, also taking subsidies, does not take place.
So let us return to the Pacpad. The question to ask is: who authorized the Pakistan Airforce to venture into consumer electronics? Should it not have reported to the civilian government that it was allocating it more money than it needs? If the government were to decide it wanted to develop a Pakistani iPad, then the spare money should go into building a consumer electronics capacity in Pakistan, by either subsidising private sector companies or setting up a public enterprise to undertake R&D in consumer electronics.

The military has no business doing business. The principle is simple enough. But enforcing it will remain a problem as long as civilian governments continue to consider the milibus a ‘sacred cow’ and not put the military budget under parliamentary oversight. As consumers, our position must be to shun the Pacpad, and the like, to let the capacity for public-owned or private enterprise to develop.

The writer is a member of the Workers’ Party Pakistan and a researcher at the Lahore University of Management Sciences. He blogs at voiceamidstsilence.blogspot.com