Soldiers of Fortune by Dr. Ayesha Siddiqa

[qsaark]

Soldiers of Fortune

By Dr. Ayesha Siddiqa

Interview: Brig(r) Syed Mujtaba
Business in Jackboots

The Pakistan military is among several other armed forces in the world engaged in commercial ventures. Today, its financial empire has an approximate financial size of 200 billion rupees with military-controlled welfare foundations operating in areas ranging from banking, insurance, leasing and real estate to private security, education, airlines, cargo services, knitwear, and major agri-based industries.

These businesses denote an additional cost for the government because of the use of state assets. A number of the commercial operations of the four welfare foundations, the Fauji Foundation, Army Welfare Trust (AWT), Bahria Foundation and Shaheen Foundation, as pointed out by several reports of the auditor-general of Pakistan, use state resources without reimbursing the government. However, the military's top management continues to claim that these are purely private sector ventures that do not fall under the scope of government accountability procedures and, hence, have continued to grow as part of the military's hidden economy.

The military's economy comprises three interdependent but distinct levels. The welfare foundations represent the most visible segment. These four foundations are subsidiaries of the military, and the link is very clear. In general terms, all foundations use the logos of their parent services, and the overall management is provided by the respective service headquarters. The Fauji Foundation, on the other hand, is a tri-service organisation managed by the ministry of defence and has a system of plowing resources back into the welfare budget of the three services. These financial stakes account for about six to seven per cent of private sector assets.

According to the former governor, State Bank of Pakistan, Ishrat Hussain, the military's stakes in the private sector are about 3.6 per cent. However, the former governor's estimates do not take into account the military business complex's real estate investments. Moreover, his estimates are based on the data collected from the Karachi Stock Exchange, which does not include a number of the military's business ventures. The military's corporate empire comprises 100 projects controlled directly or indirectly by the four welfare foundations, most of which are not even listed with the stock exchange. Although these commercial ventures have ostensibly been established for the welfare of the entire armed forces, the fact is that the officer corps, especially the top echelons, are the key beneficiaries of the military's economy. The cushy jobs given to senior commanders in these foundations or other military-controlled business ventures soon after retirement generate an interest at the senior level of the military's management to maintain a foothold in power politics. It is this aspect which is most troublesome for a polity that is trying to get back on its feet. A political army's interests in remaining well-entrenched in politics become significant when it has equally significant financial stakes in staying on top of things.

The armed forces' direct or indirect involvement in the economy and its parallel control of power politics allows it access to privileged information which, in Pakistan's case, has allowed two welfare groups, the AWT and the Fauji Foundation, to become two of the largest business conglomerates in the country. Besides access to strategic economic information, these business groups have been given tax breaks as well. For instance, the Fauji Foundation was exempt from taxes during the 1960s, and the AWT did not pay any taxes until 1993, when tax was levied on it during the first regime of Prime Minister Nawaz Sharif. Even then, the trust paid fewer taxes than the Shaheen and Bahria Foundations. So much for the political influence of the army.

The military as a serious economic actor, which competes with other domestic economic players, is a phenomenon prevalent primarily in the developing world, especially in countries ridden with the problem of political underdevelopment. The armed forces of the developed world, such as in the US, France, Britain and others, also have a significant economic role, but these militaries normally piggyback on the civilian players to exploit resources in other countries rather than competing within. So, the Chinese PLA, the Thai, Pakistani and Burmese armed forces, or even the Iranian Hezbollah militia, directly depend on their political significance to exploit resources at home. In weak polities in particular, militaries are tempted to engage in economic ventures for a number of reasons, ranging from the welfare of their own personnel to filling the financial gap in order to meet their operational and personnel needs - especially when the governments cannot do so due to a resource crunch, or because the state has a poor tax base that does not allow it to generate resources - or merely to fulfill certain other objectives of the state.

Historically speaking, militaries have been engaged in commercial ventures for a host of reasons. The German military, for instance, was deeply entrenched in commercial ventures until it was defeated during the Second World War. However, a direct involvement in commercial ventures in the post-Cold War era is a phenomenon that one sees prevalent in developing countries mainly. It is also a feature in countries where the militaries were directly involved in nation-building or were people's armies, such as those in China, Indonesia, or a number of Latin and South American countries. The military in business is not a popular model in operational/professional militaries. Of course, there are exceptions such as Pakistan and Turkey.

Once one begins to look into this issue, there are clearly three models that are visible. The first model relates to cases like in China, Indonesia and many Latin American states where the military, including serving personnel, are directly involved in commercial ventures. Here, the militaries became engaged in commercial ventures as part of the politico-economic tradition whereby the armed forces were encouraged to get involved in business activities to raise their own resources or to meet budgetary gaps. In Indonesia's case, for instance, the military was consciously involved in commercial activities to meet the resource gap, even for buying military hardware. In China, this was also done to meet the shortfall in the defence budget. However, in Pakistan's case, the defence budget is completely funded by the government, which also bears the burden of over 30 billion rupees in military pensions. It is important to note that even in such cases like China and Indonesia, it was eventually realised that the military's direct involvement in commercialism was inimical to the professionalism of the institution. Hence, the Chinese armed forces were legally banned in 1998 from indulging in commercial ventures, especially in the service industry.

The second model relates to countries like Pakistan and Turkey where militaries are not engaged directly, but by proxy. This is done by running commercial activities through retired military personnel and using funds accumulated for welfare. This is a method that has been used in both Turkey and Pakistan. In Pakistan's case, the pension or the welfare fund is used to run three foundations: the Army Welfare Trust, Bahria Foundation and the Shaheen Foundation. Given the huge resources available to the armed forces as part of the post-retirement fund, the money is invested in business ventures to earn returns for those investing in the welfare scheme. This methodology also gives credence to those who argue that these ventures have no link with the military. In fact, in the view of most military personnel, the fact that these foundations and some of the businesses are run by retired military personnel does not signify that they are the corporate interests of the armed forces. Of course, what is always forgotten is that it is the political clout of the military - and the fact that it is directly involved in governance - that has a major role to play in giving these commercial ventures a big boost. Given the peculiar nature of the civil-military relations imbalance in Pakistan, there are times when contracts are granted on a preferential basis to military organisations. The entire construction workload given to the FWO and the NLC in Lahore by Shahbaz Sharif bears witness to the fact. Skeptics would argue that the contracts are obtained through competitive bidding. However, given the nature of transparency of the government, this argument is highly questionable.

The last model that was referred to earlier pertains to activities conducted in the developed world where retired military personnel set up security firms or organisations directly linked with the 'management of conflict.' These companies, like the MPRI in the US or Executive Outcomes in the UK or Sandline International of South Africa, are used indirectly by the military or the governments to pursue their security objectives in other countries or regions. A number of these companies were used in the African continent to support regimes or to bring down governments. This involvement is strictly military and is run in the fashion of the East India Company where private companies are used to protect commercial interests, such as natural resources, diamond mines, etc. However, the implications of this approach are for the polity and economy of other states rather than the country where such private organisations are registered.

Although all of these aforementioned cases are problematic, it is the military's direct and indirect involvement that is of major concern, especially for economies trying to survive. This is because in this situation money could be created or there could be an injudicious use of resources even in the corporate sector.

In many ways, Pakistan military's commercial activities represent a crossbreed between the first and the second models described. The military, in fact, seems to have adopted a two-pronged approach. First, turn public sector ventures into private ventures, hence using state capital. This pertains to operations like the National Logistic Cell and the Frontier Works Organisation, or even the military farms. These activities use state capital, but are later turned into private ventures. The second approach involves running commercial ventures through the use of welfare funds. It is through a combination of both that the military has arrived at the point where its businesses today control about 23 percent of the assets of the corporate sector, with two foundations - the Fauji Foundation and the Army Welfare Trust - representing two of the largest conglomerates in the country. This quantification does not, however, include the extent of the military's intricate network that forms its economic/commercial empire.

To even have an idea of how deep the network is, one needs to look at three distinct levels: (a) small and medium enterprises run independently by units and divisions. These businesses range from bakeries to more intensive ventures; (b) public sector large enterprises - this refers to organisations like the NLC and FWO that are run under a formal public sector set-up; and (c) large-scale private sector ventures where some or all of the capital has been drawn from the public sector. The control, definitely, is in the hands of the armed forces. For instance, the management of the foundations is connected with the service headquarters. To get an idea of the size of the private ventures, the Fauji Foundation has 21 projects, the AWT 41, Bahria Foundation 23 and the Shaheen Foundation has 11. These range from bakeries, petrol pumps and international airlines to real estate, financial services and banks.

Referring to the military's small and medium enterprises, one would like to cite the example of one recent venture started by the corps command/cantonment board Bahawalpur. In this case, the cantonment board erected a toll plaza on the main GT road and started to collect money, an action that is in contravention of the cantonment board/local bodies law. As per the rules, none of these organisations can impose a tax on a highway. Of course, the High Court rejected the plea against the decision, and one does not have to wonder why. Such ventures are carried out to make money that is then put in the regimental fund in the name of welfare, but with no accountability. There is absolutely no method to quantify the extent of such activities and the money generated through it. Unfortunately, the lack of transparency breeds corruption.

Then there are the two approaches used by the armed forces for what they term as their private sector ventures. The first relates to organisations like the Fauji Foundation that were raised by some funds from the government or those inherited from the British in 1947 as part of the welfare fund and invested in establishing commercial ventures. In this approach, the profit is used for the direct investment in welfare of retired personnel through opening schools, hospitals, training centres, etc. Since such operations are fairly independent, there is not a constant source of input from the public.

The businesses run by Fauji generate sufficient profit for the ventures to expand. However, efficient operations are not a common feature through the spectrum of the Fauji Foundation business. There are areas where the Foundation has, in the past, sought government intervention and financial help to remain afloat. The one example relates to Fauji-Jordan Cement. The operation had to be salvaged through help from Islamabad. In fact, a glance at the financial statements shows that the amount of the interest payable is so high that such establishments could be conveniently liquidated.

The other approach relates to the other three foundations where welfare money is used to establish businesses that, in turn, are used to generate profit to be paid back to the investors. These investors are the retired personnel who have invested the money in welfare schemes.

What is interesting about most of the business and industrial ventures is that the operations are in areas with high government protection or relate to high consumption items. For instance, the military's major industrial ventures are confined to sugar, fertiliser, cereal, and cement production. The idea is to restrict operations to areas that are financially less risky and bring higher dividends. This is a pattern that one finds in other areas of operations as well. Major concentration in the trade and service industry is in areas where the foundations could either benefit from business provided by the parent services or where there is a greater surety of returns. The two examples in this regard are the knitwear project of the AW and the real estate businesses of AWT, Bahria and Shaheen. The additional benefit is that land is often acquired on concessional rates due to the military's image and then sold at higher market prices. The profits are definitely visible even in cases where a service has not invested a major share of resources in a project.

The one example relates to Bahria Foundation's housing and construction project. The construction of the Bahria town in Rawalpindi and other cities is replete with stories of kickbacks to individuals. In any case, this project involves the linkage between one Mr. Riaz and the navy with the former responsible for major financial investment in the housing projects in return for using Bahria's name. The relationship was finally terminated in 2000 when Bahria Foundation transferred all shares in Bahria Town Scheme to Malik Riaz. The foundation also challenged Riaz in court for continuing to use the name Bahria. However, the court decided in the businessman's favour whose contention was that the name Bahria had become synonymous with his large housing projects, and that his business would be affected if he did not use the name and the logo. Interestingly, the court did not seem to pay attention to the laws which prohibited the use of an official logo by private companies.

It must also be mentioned here that the real estate development projects run by the three foundations are separate from the housing schemes run by the respective service headquarters. Contrary to the practice followed by foundations that procure land against a certain price, service headquarters do not pay any price for the land acquired to establish welfare housing schemes. It is only the construction price for the house or flat that is borne by the officer who has been given the property. Hence, it is not surprising to see state land previously dedicated for military purposes being consumed by such housing schemes. In Lahore cantonment alone, about 600 acres of land allocated for army exercises and other uses was arbitrarily taken and converted into housing schemes or given to officials for the paltry sum of 17 million rupees. Intriguingly, no one seems to have questioned the decision.

Today, military's economic activities can be observed in all three key segments of the economy: agriculture, manufacturing and service industries. The general principle that seems to have been followed is to expand in areas where the foundations were more assured of profits. However, having this rule does not necessarily mean that the foundations are efficient as well. Some of the military's concerns have huge operating/management costs. As for the AWT, it had to ask the government for a 5.4 billion rupee bailout in 2002. According to sources, the Nawaz Sharif government bailed out the trust through helping it with one of its foreign loans. This is highly scandalous, and certainly as scandalous as the Sharifs getting unfair concessions for the Ittefaq group. Although intriguing and understandable at the same time, the political leadership continued to support the expansion of this economic empire, treating contracts and businesses as favours that might protect a particular regime from the army's wrath. While it was not possible to achieve the perceived objective, the financial empire started to bloat as well.

Nawaz Sharif is not the only one who supported the military's business. A number of projects by the welfare foundations were sanctioned under Benazir Bhutto's government as well, with rumors of close linkages between Asif Zardari's close friends and Shaheen Foundation's management regarding the setting up of the Shaheen pay-TV and radio projects. None of the political governments raised any major objection to the military business complex during the 1990s. Moreover, there are many in the corporate sector who do not object to the military in business or even become its partners. This complacency or tacit cooperation can be explained as a by-product of the military's economic role - it tends to create clientalism. In Pakistan's elitist-authoritarian political system, which is backed by a top-down authoritarian economic model of progress and development, the political class and other key sectors seek the military's partnership for their personal gains. Since the military is a permanent actor in politics, which also keeps returning to power, other players seek to build a partnership with the GHQ or not disturb its interests to seek economic gains. Unfortunately, this perpetuates an elite model of exploitation of national resources.

The negative impacts are multi-dimensional and it is not just on the economy, but also on the profession of the military as well. It is true that one does not have a large number of serving people involved in private businesses. The bulk of uniformed people are actually in the National Logistic Cell and the Frontier Works Organisation, two organisations that have turned commercial. Both organisations were initially established to handle special projects or national emergencies, but then encouraged to do their own revenue generation. The limited number, hence, one could argue, does not put Pakistan military's ventures on par with that of China or Indonesia's. Also, one could argue that the Pakistani model is different because it does not use serving officers. However, there are two critical issues that must be understood.

First, commercial ventures, even if they do not use serving officers, do, unarguably, have an impact on the professional mindset. Senior officers, who are quite aware of the rewards that await them after retirement in terms of extension of perks and privileges as a result of jobs in these companies, tend to compromise on the quality of their work during service. It is important to note that there is no streamlined system for selecting people for appointment in these organisations.

According to a senior retired army officer, Zia used these foundations to reward people he liked, or punish those he didn't by kicking them out of the mainstream GHQ positions into the foundations. But for the majority, it is a perk that requires major compromises during their military career, especially at the top. Second, there is an element of symbolism involved here. What this means is that with the number of soldiers involved in such ventures at the unit/division/corps level, and even looking at the post-retirement benefits, a lot would view these as an extension of their power and influence. It also inculcates an attitude of grabbing financial opportunities that tends to ruin the organisational ethos. Hence, there are problems even with this, otherwise, benign model.

Finally, these are not the kind of activities that a professional/operational military ought to be getting involved in. After all, it was the sensitivity towards increasing or safeguarding the military's professionalism that lead the Chinese to force the armed forces to withdraw from it. There were other curbs that were imposed as well.

Ayesha Siddiqa is the author of the upcoming book, Military Inc, Inside Pakistan's Military Economy (to be released in April 2007)

Is this only baseless propaganda?

 

[asaad-ul-islam]

Is this only baseless propaganda?

in a word, yes.

if the only thing Ayesha Siddiqa can write about is the army, then yes, it's definitely propaganda.

Ayesha Siddiqa’s MILITARY INC: A Deflective and Derogatory Book

Written By: Afreen Baig

Dr Ayesha Siddiqa’s ‘The Military Inc.’ is a book deflective of reality, highly derogatory and against the very notion of sovereignty.

Dr Ayesha Siddiqa launches the book by giving the impression that her intention is to cover the entrepreneurial activities of military worldwide. However, in depth reading reaffirms suspicions that her book massively targets the Pakistan Military and the top echelons of the Armed Forces, most of which are based upon self serving assumptions and intentional hoodwinking. A labyrinth of financial figures is presented to further obscure the ordinary reader’s intelligence.

The book sets forward four arguments. First, that MILBUS (Military Business) is military capital that perpetuates the military’s political predatory style; and is kept concealed and includes questionable transfer of resources from public sector to individuals connected with armed Forces. Second, the military’s economic greed increases in totalitarian systems. Third, Military convinces the citizens to bear additional costs for security on basis of conceived threats to the State. Fourth, the book considers the Pakistan Military the cause of all ills, social disparity and democratic fiasco.

Let’s start by setting the record straight. MILBUS in Pakistan - is the result of honest intentions and visionary policies - to raise independent resources, to self-finance the on-going national technological development, to modernize strategic assets, and most importantly, the determination to rely less on Foreign Aid. While at the same time, build facilities for retired military personnel and their families; and slowly withdrawing from National Defense budget allocation as a percentage of GDP.


MILBUS also exists in well developed countries like the USA, UK, France, China, Israel or even Turkey. The Milbus or the PMEs (Private Military Enterprises) are generally known as the Private Military Industry. Famous US PMEs include Halliburton, Black-water worldwide, Defensecurity, Titan Corporations, Kellogg Brown & Root, Air Scan, DynCorp’s, CACI International, etc. Famous UK PMEs include Black-Op’s and Aegis Defense Services. Most of these are active beneficiaries of the Iraq War. The worldwide PME industry is now worth over $100 billion a year. Thus, this is not just a Pakistan specific industry.

MILBUS in Pakistan is being criticized unnecessarily, with the sole intention to malign the Armed Forces. The Pakistan military has never intended to deliberately conceal their economic activities and they do not cause injustice by weighing heavily on civilian corporate sector or individual leaders.

The book ‘Military Inc’ is based upon a series of presumptions and false accusations. Throughout her book, the author obstinately insists that the growth of Military economy is the case of self interest and predatory acquisition by senior officers, in which it allow the Generals to seek benefit for themselves and their clients.

The author fails to provide, any concrete evidence that could confirm her allegations, that questionable transfer of wealth is made to individuals connected with armed forces. All she could give in example were the 500 sq yard official plots given to the Generals at the end of their service, as part of their benefits, and hence her assumption that a retired general is worth from Rs.150 million to Rs.400 million.

Rarely do critics mention, that nominal deduction from the pay of all military officers are made during their service, in return for a small apartment or a small housing, which is handed over at the time of their retirement. However, this facility is still not available to all retiring servicemen.

Next, the book alleges that the military’s economic greed increases in totalitarian systems, where the general public, private businessmen, civilian corporate sector and national business units are all oppressed to encourage and endorse military business units. Her book focuses largely on the four welfare projects managed by the Pakistan Military i.e. The Fauji Foundation (FF), the Army Welfare Trust (AWT), Shaheen Foundation (SF) and Bahria Foundation (BF), and in some places the Frontier Works Organization (FWO).

The author believes that “the profit earned by military is directly proportional to power and gives the armed forces a sense of being independent of the incompetent civilians” - which can only be considered as an extremely reckless comment.

There was great wisdom behind establishing these welfare projects. The visionary minds knew that “the profit earned by the military will be directly proportional to Sovereignty of the Country and the Institution”.

The Military established its first welfare foundation in 1954, with funds received from the British as part of Pakistan’s share of the Post War Services Reconstruction Fund. In India, those funds were distributed immediately amongst those who fought the Second World War. Unlike India, Pakistan’s wise military opted to use those funds to establish projects that would ensure the overall well-being, availability of jobs, and a decent pension for their armed forces.

The initial purpose of these welfare projects was to create employment opportunities for the honorable retired or disabled military personnel. Servicemen - whose only obligation is defending the borders of Pakistan.

This one wise decision, not only raised the morals of the serving military men, but also gave the ordinary citizens a reason to join the Armed Forces of Pakistan and serve their country. Assured that their future is protected, the servicemen live their lives in testing times on borders, remote locations and a life away from family.

The Fauji Foundation, Shaheen Foundation and Bahria Foundation were all established under the Charitable Endowments Act 1890. The Army Welfare Trust was established under the Societies Registration Act 1860.

Then all these entities are registered Tax-paying Companies. The Army Welfare Trust and the Fauji Foundation pays tax at 20% of their profits. Shaheen Foundation and Bahria Foundation pay Taxes at 30% of their profits. Fair enough!

This limited industrial base that evolved over years added to the military’s credibility and resolves to contribute towards the Nation’s socio-economic development and Pakistan’s Gross Domestic Product (GDP). Like any ordinary successful businessmen or multi-national corporations (MNCs), the Pakistan Military utilized their available structure, nominal budget and dedicated their human resources for the welfare of the uniformed men and civilians working in those companies. While also pioneering technology, developing expertise and establishing quality control.

The book ‘Military Inc’ accuses the Pakistan Armed forces of running business (MILBUS) that are diverse in nature, ranging from small scale to large scale corporate enterprises. As examples, it quotes Schools, Banks, Insurance Company, Radio and TV, a Fertilizer company, Hospitals and Clinics, Cement plant, Universities and institutes, etc.

Dr. Ayesha Siddiqa left no opportunity to magnify and exaggerate the limited and partial presence of MILBUS competing in Pakistan’s broad based expanding economy.

Let’s analyze the limited magnitude and negligible worth of these Military run ventures, compared to similar mega business entities currently present in Pakistan.

According to State Bank of Pakistan, there are total 73 Banks in Pakistan. From which, there are 24 Limited banks, 11 Foreign Banks, 8 Financial Banks, 4 Specialized Banks, 13 Investment Banks, 7 Micro-finance Banks and 6 Islamic banks. Out of these total 73 banks - Dr Ayesha Siddiqa tends to be intolerable towards ONE ‘Askari Bank’ run by Military? In 2007, Askari Bank paid a Tax of Rs. 743 million.

According to Federal Bureau of Statistics, there are 24 Cement plants in Pakistan, and only ONE owned by ‘Fauji Cement Company Ltd’. A Tax-paying company listed on the Stock Exchange.

According to State Bank of Pakistan, there are total 59 Insurance companies in Pakistan. There are 4 in the Public sector, 50 companies in the private sector and 5 are incorporated abroad. Why should anyone be narrow-minded towards ONE owned by military - ‘Askari General Insurance Ltd’, which is listed on the Stock Exchange and pays Tax?

According to the Health Division and the P.M.D.C, there are around 924 Hospitals, 12,726 Medical Institutions, 560 Rural Health Centers and 4712 Dispensaries all over Pakistan. Out of these, if 10 Hospitals and 20 Medical Centers are being run by Fauji Foundation, what’s the hue & cry about? These Medical services are offered to the military and civilians alike. Even the prestigious Aga Khan Health Services (AGHS) own 7 Hospitals and 164 Medical Centers.

According to State Bank Pakistan, there are above 10 Fertilizer Plants in Pakistan from which 6 are State owned and the rest are private. Out of these, only ONE is military owned, the ‘Fauji Fertilizer Company Ltd’, which is listed on the Stock Exchange and audited by KPMG Taseer Hadi & Co, and pays Tax annually.

According to Higher Education Commission, there are 122 Universities in Pakistan. Out of which, 65 are in the Public sector and 57 in the private sector. Foundation University and Bahria University are the only two affiliated with Armed Forces providing quality education to all citizens alike.

Foundation Schools have 90 branches all over Pakistan; compared to the City School which has more than 150 branches and the Beacon-house School which has around 130 branches. We as a Nation should triumph the quality education being promoted by the Foundation schools and the model paradigm implemented.

The Securities and Exchange Commission of Pakistan (SECP) has 50,125 companies registered with it. From these only 9 are MILBUS projects. Why can’t Dr. Ayesha Siddiqa accept these 9 MILBUS projects out of the 50,125 projects broadmindedly?

The author also alleges that Military’s Internal Economy is hampering the growth of Pakistan’s free market economy - which of course is not true. For her information, under this same system and era, and under the leadership of General Musharraf, Pakistan’s free market economy boomed from $75 billion in 1999 to become $160 billion in 2007.

In the last 6 years, the free market economy of Pakistan expanded by $85 billion. The expansion and growth the Civilian Corporate sector, National Business Units and Multi-National Corporations witnessed in these last 6 years remain unprecedented in Pakistan’s Economic History. Hence proven, that Military’s Internal Economy did not hamper Pakistan’s free market economy!

According to Dr Ayesha Siddiqa’s book, the worth of Fauji Foundation is $169m, the worth of Army Welfare trust is $862m, the worth of Shaheen Foundation is $34.4m and the worth of Bahria Foundation is $69m. Total worth of MILBUS entities in Pakistan arise to ONLY $1.135 billion.

Hence, the presence of MILBUS companies, in Pakistan’s free economy of $160 billion, amongst these other sectors and enterprises arises to a negligible maximum 0.8%.

The Karachi Stock Exchange (KSE) Market Capitalization in January 2008 stood at $75 billion. MILBUS worth as compared to KSE again arises to only 1.5%.

It’s amusing to note that Dr Ayesha Siddiqa wrote a whole book, to malign a system (MILBUS) whose worth does not exceed 0.8% of Pakistan’s free market economy.

Dr Ayesha Siddiqa’s desire to portray the Pakistan Military as a coercive and self serving breed aiming to consolidate their economic power at the expense of Pakistan, not only erodes her neutrality into bias, but the above economic comparisons also contradict all her presumptuous and sham claims. As MILBUS in Pakistan has been competing fairly in free market and contributing to today’s knowledge-based economy. It has played an active role to generate revenue for Pakistan and in contributing to overall GDP.

One of the greatest wisdom foreseen, behind establishing MILBUS was to liberate the Pakistan Armed Forces of international aid assistance and interference. Classified financial autonomy gives the Armed Forces a sense of self-respect and confidence of being independent of the dominating ‘International Coalition of the willing’ and their foreign aid.

The Pakistan Army has received a total of around $17 billion from the United States for arms, equipment and compensation since 1954, the year the United States entered into defense pacts with Pakistan. Much of it was uselessly spend during the 1980’s Afghan war and the wars Pakistan fought with India. After 9/11, the famous foreign assistance of $10 billion comprises 60% reimbursement costs for expenditure incurred by the Pakistani Military while patrolling on PAK-Afghan border, recorded in the ‘Coalition Support Funds’. These worthless assistances have not helped the Pakistan Army contrary to perception propagated in media reports.

Because, with these insignificant and worthless assistance, follows a series of humiliating articles and editorials composed in American print media. The clueless and prejudice Pakistani media ignorantly picks up the chanting and further plays an important role in distorting and altering the actual facts and figures. No relevant person is approached to clarify and set facts straight. Authors like Dr Ayesha Siddiqa bank on such distortion to further slander the admirable Pakistan Military.

After year 2000, the $85 billion expansion of Pakistan’s economy, decreased the ratio of US aid & assistance to Pakistan’s economy by around 100%. Now the U.S aid & assistance account to only 6.25% of Pakistan’s expanding economy. Pakistan is successfully wriggling out of foreign influence. Visionary MILBUS was the right step in the right direction at the right time!

Pakistan Military requires a proper platform utilized to clear the misperceptions being propagated against them and counter the sham allegations. In short, Pakistan military lacks the exposure to enhance their PR with the Public. Pakistani GHQ and ISPR should take up an active role similar to Pentagon and make their interactions more effective.

Next, the book ‘Military Inc’ considers Pakistan Military the root cause of social disparity and democratic fiasco. It alleges that socio-political fragmentation would result in strengthening the army’s control over politics. Throughout her book, Dr Ayesha Siddiqa lambasts and scoffs at the concept of MILBUS accusing the military of building assets and calling them as the ‘new land barons’.

In her desperation to smear the Army, she even fails to condemn the corruption practiced and coercive measures exercised by the inept political leaders. How these redundant leaders influence the bureaucracy, alter the constitution, plunder national institutions, stagnated the trade & exports, multiplied the foreign debts for the country, rob the country of the foreign reserves and accumulate their wealth in developed countries - is all together ignored by her conveniently.

The truth is that the Armed forces are forced to intervene reluctantly and take control of the state to save it from the irresponsible and hopeless politicians, who drag the country towards brink of collapse, every time they come to power.

In short, Pakistan’s external debt rose from $18 billion in 1988 to become $38 billion by end of 1999. In 1999, Pakistan’s total debt (internal & external) was almost 90% of its GDP. External debt in ratio to foreign exchange earnings were 347%. Debt servicing allocated in 1999 budget was 61% of total revenue resources. According to the World Bank, in 1999-2000 Pakistan was amongst the highly indebted countries.

Despite the above mentioned debacle for Pakistan - the substantial expansion in the personal wealth, land and business interests of Mr. Zardari and Mr. Nawaz Sharif has earned them a place in the ‘Top 5 richest people’ of Pakistan in 2007. Not a single General or military servicemen made it to the list of ‘Top 40 Richest Pakistani’. Who should we consider a peril to Pakistan’s existence - these fraudulent politicians or the reserved military?

The Raiwind complex of Nawaz Sharif, build on an area of around 2000 acre, consist of palatial residences, 300 acre farm, 500 bed hospital, a school, 200 acre dairy farm, etc - constructed at a cost of above Rs. 800 million. He personally owns Ittefaq foundries, three Sugar mills, numerous Textile mills, Steel Mills, Paper Mills, Spinning mills, Engineering companies, and numerous other business units. He owns several residential properties in Lahore and Muree. He owns vast acres of lands in Sheikhapura, Chunian, Raiwind, Multan and Bhopattian. These feudal turned politicians can easily be labeled as the ‘old Pakistani barons’.

Dr Ayesha Siddiqa also alleges that the military convinces the citizens to bear additional costs for security on basis of conceived threats to the State. She wants the public to believe that their taxes are being exploited at the expense of the notion ‘National Security’. This statement of hers is an attempt to ignore and snub the volatile situation Pakistan faces at its borders.

She also remains oblivious to the fact, that India allocates 5 times that of Pakistan’s defense spending.

However, under President Musharraf, the military spending DECREASED as percentage of GDP and National budget. It now stands at 3% of GDP and 15% of National budget. It strikes out though, how Dr Ayesha Siddiqa veils and ignores the bulk of the National budget of 85% that lies at the disposal of the manipulative hands of our shady politicians. The public has the right to know, what proper utilization has been brought about with that unaccountable 85% in the 1990’s?

This derogatory book ‘Military Inc’ intends to sow seeds of disenchantment amongst the general public against the modest and patriotic institution of the Armed forces of Pakistan, and lower its grace. Those Armed Forces of Pakistan that run to protect and deliver relief, to ordinary Pakistanis in times of calamities, natural disasters, floods, train accidents, and earthquakes. Does Pakistan have any other force or institution which is as disciplined and effective in providing speedy help immediately? Shouldn’t we strengthen this only institution that we have?

The publication of Dr Ayesha Siddiqa’s own book ‘Military Inc’ in 2007, in President Musharraf’s era, repudiates her claims to term the military rule as manipulative and suppressive. It’s evident that no subtle or coercive measures were taken against her or any arm-twisting to curb the publication of this highly controversial book! Where would she find such boundless and gracious freedom? The book ‘Military Inc’ has become a checker of the chessboard being maneuvered by the unknown and ambiguous foreign powers interested in Balkanization of Pakistan.

The ultimate objective of the book ‘Military Inc’ is to perpetrate friction and cause dissent amongst the ranks of the disciplined Armed Forces. By deliberately triggering upheaval within the lower ranks, the intention appears to encourage internal revolt. As a consequence, the unity, discipline and allegiance of the Armed Forces of Pakistan can be destroyed.

Thus, to protect the allegiance of the Armed Forces, the whole concept of visionary MILBUS is justified, as a set of activities for the development of Pakistan’s military might, meant to counter the rising regional threat convergence and decreasing dependence upon foreign aid - ultimately protecting the sovereignty of Pakistan and its savior Armed Forces!

Glory and Triumph to Pakistan Armed Forces!

Afreen Baig is an independent analyst majoring in International Relations and Economics. She can be reached at afreenbaig@gmail.com