Islamabad, (Asian independent) It is often said that Pakistan or Toxicistan’s destiny has been shaped by the three As – Allah, (Pak) Army and America – and this is as valid today as it was 60 or 70 years ago. On Tuesday, Pakistan continued in its errant ways, resorting to heavy shelling along the Line of Control (LoC) in Jammu and Kashmir’s Poonch district, prompting strong retaliation by the Indian Army. Even as it keeps India busy on the borders, it goes about its daily business of running its business with great elan.
One would think that the Pakistan Armed Forces’s tradecraft was limited to securing its borders and creating military strategies to undermine India, but the Fauj is arguably the biggest industrial and business behemoth, also called Pakistani MilBus with over 100 independent businesses operated by subsidiaries of five Foundations of the military, viz. Fauji Foundation (run by the Ministry of Defence), Army Welfare Trust (run by Pakistan Army), Shaheen Foundation (run by Pakistan Air Force), Bahria Foundation (run by Pakistan Navy), and Pakistan Ordnance Factory Board Foundation (run under the Ministry of Defence).
The matrix of this gargantuan enterprise is all pervasive in Pakistan, from cement to cereals, general insurance to gas, fertilisers to fish farms, seeds to stud farms, apparel to aviation, meat to medical equipment, name what you like – the Milbus in Pakistan markets a variety of products with little or no connection to its core duties of defending the borders.
Ayesha Siddiqa in her book “Military Inc – Inside Pakistan’s Military Economy”, describes Fauj Inc succinctly – “military capital that is used for the personal benefit of the military fraternity, especially the officer cadre, but is neither recorded nor part of the defence budget”. She put the cost of this Milbus to at least $20 billion.
Dawn reported how her expose created consternation in Pakistan. The government tried to disrupt the book’s launch by refusing to allow Oxford University Press to hold the function there at the last minute. This ham-handed reaction gave the book a cachet and an appeal it might not otherwise have gained. Dr Siddiqa informed that copies are not available over the counter in Karachi and Lahore. The assumption is that “agencies” have bought up most of the first print run. I am willing to bet that few of the book’s detractors have actually read it. Indeed, I must confess that having just bought a copy, I am still going through it. Thus, this is in no sense a book review. But the introduction makes the book’s seriousness of purpose abundantly clear. Dr Siddiqa has coined the term ‘Milbus’ (pronounced ‘milbiz’) as a shorthand term to refer to the military’s business interests.
In its review, The Book Review – Literary Trust, the bare bones of how Fauj Inc dominates Pakistan society is revealed. “The spread of the military fraternity in all important segments of the state, society and economy represents more than just a belief in the greater capacity of the armed forces. The military as a group has visibly graduated to become a class, and its serving and retired members are benefiting themselves from the organisation’s immense power in relation to other domestic players.”
The complex and intricate web rules then roost realising that money is the apex of the modern social construct. The Foundations operating these commercial enterprises are registered as charities or societies, and not as companies, under the laws of Pakistan. The Fauji Foundation, Shaheen Foundation and Bahria Foundation are registered under the Charitable Endowment Act of 1890. The Army Welfare Trust was established under the Society Registration Act of 1860. Each Foundation is administered by a Committee of Administration, chaired by the chief of one of the three defence forces. Together, the Foundations constitute Pakistan’s largest industrial and trading complex, however, none of them is covered under the Companies Act of 2017, which is applicable for profit-making enterprises.
The Pakistan military also runs the Special Communication Organisation (SCO), the National Logistics Cell (NLC) and the Frontier Works Organisation (FWO). The three organisations are commanded by serving senior officers of Pakistan Army, just like the Pakistan Water & Power Development Authority (WAPDA). Earlier, the National Highway Authority (NHA) was also being headed and managed by senior military officers but the military had to cede space to the civilians in recent years, due to instances of serious corruption by senior uniformed officials. SCO was established in 1976 to create communication networks in Northern Areas and Pakistan-occupied Jammu and Kashmir.
NLC was established in 1978, as a cargo company and owns a large fleet of trucks and seagoing vessels. FWO was established in 1966 to construct the Karakoram highway connecting China with Pakistan. SCO, NLC and FWO have serving officers of the Pakistan military working in key positions, on attachment or deputation. These are seen as lucrative appointments, with multiple opportunities to make money and develop “connections” with the commercial sector.
Originally conceived as strategic demi-military organisations, SCO, NLC and FWO have steadily diversified into civilian domains with the objective of making profits. They bid for government contracts, for which they often receive preferential treatment in the selection process. For example, FWO was the Army’s natural choice for the civil works of the Kartarpur Corridor project proposed by Pakistan for connecting Gurdwara Darbar Sahib, Kartarpur, to the border with India. The inferior quality of civil works undertaken by FWO in 2019 became evident when eight domes of the renovated Gurudwara fell apart during a thunderstorm in April.
Siddiqa, in her concluding no holds barred chapter, revealed: “The most serious consequence of the military’s involvement in economic ventures relates to their sense of judgment regarding the political control of the state. The financial autonomy of the armed forces … establishes the officer cadre’s interest in retaining political control of the state. Since political power nurtures greater financial benefits, the military fraternity sees it as beneficial to perpetuate it. In this respect, economic and political interests are linked in a cyclic process: political power guarantees economic benefits which, in turn, motivate the officer cadre to remain powerful…”
