The military in business

7
104

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

7 COMMENTS

  1. Miss Ayisha had already exposed these facts in her book Military inc: but Mr Hashim,s this articale is a eye opener,but my question is that,it may be possible that a secret green signal may have been recived from the some civilen high up by the Kamra authorities……… I will request the writter to please dug out if it is as, am presuming ? thanks

  2. Its Factually wrong that Fauji Foundation was ever given subsidy. It never recives grants, donations or allocation from government or private entity. It started its business out of 54million it recieved as endowment fund by Queen of england for the soldiers who participated in World War-II and were resettlled in Pakistan after indepandance. whereabouts of those were unknown so a board of governer was set up to invest that 54million into business. Thereafter Fauji Foundation invests in business, earn from them and spent on welfare. at the moment its the single largest private welfare organization. its not owned by government or Army, hence how come private entity be privatised, when its already private. I personally met Dr Ayesha before publishing that book and shared documantry evidance so she may correct the facts, but she had already planned the them and facts were not in her favor.

  3. I agree with you but at the same time lets remmember that all 21st century technology including computers, mobile phones, internet started off as military gadgets….

  4. It is fact military men has become business men like as DHA in country they buy land use sources develop land (GAS ELECTRIC PHONE ROAD SEWERAG)THEN SELL ON HIGH PRICE

  5. May be a gud argument by the author but no substance to support it. Another typical anti-military rhetoric. I wish the author could support his allegations with some facts/ figures.

  6. Insinuation ,yellow journalism.the author doesn't seems happy with a fact that they r sacrificing there lives in WOT & still be in the process of nation building .Buckup Pakistan Army do what soever possible for national building in these difficult times ,create employment opportunities for our youth.however it is reall sad that few of our present so called authors ,anchors and poor researchers are hell bent to devide the nation on our pride "our military".now these researchers even doesn't know the history of Pakistan leaving beside its state .at least I feel pleasured that due to our military engineers our middle class may also be able to buy I PAD which previously were only gifted either to those researchers for their antipak rhetoric or for tax evasionist.

Comments are closed.