The Army as a Business Venture

In her book "Military Inc.: Inside Pakistan's Military Economy", Ayesha Siddiqa has produced the first scholarly examination of the extent of the army's involvement and role in Pakistan's economy. By Irfan Husain

​​When discussing the army's long shadow across their country, many Pakistanis say, only half-jokingly: "Other countries have an army; in Pakistan, the army has a country."

This cynical view reflects the consensus that the army has taken over virtually every area of public and corporate life, ranging from hockey to provincial health departments.

Well over a thousand retired and serving military officers have been placed in every conceivable job in the public sector. And their aggressive presence in industry, banking and real estate is the subject of Dr Ayesha Siddiqa's recent book "Military Inc."

Not available in Karachi and Lahore

A couple of months ago, the government tried to disrupt the book's launch by refusing to allow Oxford University Press hold the function at the Islamabad club 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 me that copies were not available over the counter in Karachi and Lahore for days after publication. The assumption was that Pakistan's ubiquitous intelligence agencies bought up most of the first print run.

In "Military Inc.", Dr Siddiqa has produced the first scholarly examination of the extent of the military's involvement and role in Pakistan's economy. In this sense, this is a work of research, and not a sensational anti-army bestseller.

Had Musharraf's government not given the book so much free publicity, it is likely that it would have been read by relatively few people. As it is, the book has been widely discussed in the media.

"Milbus" – the military's business interests

The author has coined the term "Milbus" (pronounced "milbiz") as a shorthand term to refer to the military's business interests. She defines it thus:

"'Milbus' refers to 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 … in most cases the rewards are limited to the officer cadre… The top echelon of the armed forces who are the main beneficiaries of 'Milbus' justify the economic dividends as welfare provided to the military for their services rendered to the state."

Another justification for "Milbus" advanced by the military is that their efficiency and discipline make their business ventures more successful than those of their civilian competitors. But in reality, the playing field is far from level.

"Milbus" enterprises get many invisible benefits that allow them to function at lower costs. In effect, there are state subsidies worth billions every year, and Dr Siddiqa has quantified some of them.

Against the backdrop of countries with Bonapartist tendencies

"Military Inc." is as a case study of Pakistan, set against the backdrop of other countries with Bonapartist tendencies. Anybody who has spent much time in Pakistan has a collection of anecdotes relating to "Milbus", but thus far, these remained unquantified and unresearched.

However, it is the political implication of "Milbus" that is of most concern to ordinary Pakistanis. In the concluding chapter of "Military Inc.", Dr Siddiqa states:

"The most serious consequence of the military's involvement in economic ventures relates to their sense of judgement regarding to 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 see 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…"

Thus, the officer corps has every reason to grasp, wield and retain political power. It has no incentive to let go. The best we can hope for under this dispensation is for the army to make a cosmetic retreat to the barracks while a civilian government takes the flak without wielding real power. This was pretty much the situation for much of the Nineties, after General Zia's death.

With Pakistan's problems multiplying, more people than ever before have come to the conclusion that the army is a big part of the problem, and cannot therefore provide a solution. Musharraf's recent secret meeting with Benazir Bhutto is an indication of his growing weakness, as well as the army's realization that it might be time to step out of the spotlight.

The cancer of military rule

Ayesha Siddiqa has articulated, in scholarly term, the damage the cancer of military rule is doing to Pakistan. But by spelling out the extent of the army's involvement, she has also revealed why the officer corps will resist letting go of real power.

The real issue here is about the diversion of resources for the enrichment of the officer corps. By establishing businesses subsidised by the state, the military stifles competition. And simultaneously, billions are being spent on defence, while education and health are neglected. For instance, in the fiscal year 2004-2005, 3.2% of GDP was spent on defence, while health received a mere 0.6%, and education only 2.1%.

Obviously, such distortions have only made matters worse, with widespread unemployment and illiteracy strengthening militancy and extremism. Until the army stops interfering at every level, Pakistan will continue to be an unstable and dangerous country.

Irfan Hussein

© 2007

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