Book shines light on Pakistan military's 'Â£10bn empire' Â· Business interests range from cement to cornflakes Â· Little transparency into officer-led conglomerates Declan Walsh in Islamabad Thursday May 31, 2007 The Guardian The Pakistani military's private business empire could be worth as much as Â£10bn, according to a ground-breaking study. Retired and serving officers run secretive industrial conglomerates, manufacture everything from cement to cornflakes, and own 12m acres [4.8m hectares] of public land, says Dr Ayesha Siddiqa, author of Military Inc: Inside Pakistan's Military Economy. The book tackles a previously taboo subject - the range and depth of the military's business interests - considered a major factor in the ambitions of the generals who have ruled Pakistan for more than half of its 60-year history. "It feeds directly into the military's political power; it's an expression of their personal and organisation strength," said Ms Siddiqa, a former director of research at the Pakistan navy. Five giant conglomerates, known as "welfare foundations", run thousands of businesses, ranging from street corner petrol pumps to sprawling industrial plants. The main street of any Pakistani town bears testament to their economic power, with military-owned bakeries, banks, insurance companies and universities, usually fronted by civilian employees. Ms Siddiqa estimates that the military controls one-third of all heavy manufacturing and up to 7% of private assets. Profits are supposed to be pumped back into schools, hospitals and other welfare facilities - the military claims it has 9 million beneficiaries - but there is little transparency. "There is little evidence that pensioners are benefiting from these welfare facilities," she said. Of the 96 businesses run by the four largest foundations, only nine file public accounts. The generals spurn demands by parliament to account for public monies they spend. The military's penetration into society has accelerated under President Pervez Musharraf, who has also parachuted 1,200 officers into key positions in public organisations such as universities and training colleges. The military boasts that it can run such organisations better than incompetent and corrupt civilians. In a 2004 speech to open a new industry owned by the Fauji ("Soldier") Foundation, General Musharraf boasted of "exceptional" military-owned banks, cement and fertiliser plants. "Why is anyone jealous if the retired military officers or the civilians with them are doing a good job contributing to the economy?" he said. But Ms Siddiqa says the military businesses thrive, thanks to invisible state subsidies in the form of free land, the use of military assets, and loans to bail them out when they run into trouble. "There are gross inefficiencies and the military is mired in crony capitalism. The primary purpose of a trained military is war fighting. They are not designed for the corporate sector." Her Â£10bn estimate of military wealth is a "rough figure", she says, split between Â£6bn in land and private military assets. "Military Inc." comes at a sensitive time for Gen Musharraf, who is struggling to rebuild his popularity after the botched dismissal of the chief justice, Muhammad Iftikhar Chaudhry, in March. The move sparked nationwide demonstrations that have snowballed into a powerful protest movement. The furore has offered an insight into the raw power wielded by the generals. This week, Justice Chaudhry told the supreme court how military intelligence chiefs spent hours trying to pressure him to quit on March 9, before placing him under effective house arrest. Ms Siddiqa fears her book, which names names and pours cold water on boastful claims, may step on some powerful toes. "Over the past three years a lot of my friends have advised me not to publish this book. They think I have suicidal tendencies." But Talat Hussain, a retired general and political analyst, said Ms Siddiqa was a "courageous" researcher. "This area has always been considered a sacred cow in our society," he said. The book will be launched in Islamabad today. The main military spokesman, Major General Waheed Arshad, said he had not yet obtained a copy. "Let me read it and then I'll get back to you," he said. Backstory The 650,000-strong military has been at the heart of power since Pakistan was carved from northern India in 1947. Generals seized power in 1958 and have ruled intermittently since. The main intelligence service, the ISI, has consistently meddled in politics. Three-quarters of all army recruits come from Punjab, reflecting a similar imbalance in the country's power structures. The army's reputation for professionalism stretches back to colonial days, but has been eroded by business-related corruption allegations and three wars with India, including the loss of its eastern half, with the independence of Bangladesh in 1971.