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Pakistan’s business giant: The Pakistan Military

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Pakistan Army

Around late 2004, the leadership of Pakistan’s biggest conglomerate shifted their interests to a far more profitable venture: golf courses. Not something unusual. Since Pakistan’s inception, this leadership had come to realize that the true power lay not in politics, but in economics. From independence to date, this business giant has closely knit itself to the economics of the country, and has dissolved itself into the free market, to the extent where they now seem a part of it.

The giant in question: The Pakistan Military.

From the mountains to the coasts, the streets of Pakistan bear testament to the economic might of the military. There are banks, bakeries, insurance companies, schools, colleges, universities in every town of Pakistan, although headed by civilians, these are under the direct control of the army. Not only do these establish the military as an economic giant, but also estimates their private net worth to be exceeding USD 20 billion, split equally into land and private military assets.

Dr. Ayesha Siddiqa, a Pakistani political commentator said, many of the country’s important industries are controlled by the military, and thanks to the existence of “foundations” they are well able to cover their direct involvement. Initially setup to oversee the pensions of retired army personnel, these foundations have grown to become a major player in the military’s economic command. The largest of these namely the Bahria, Fauji, and Shaheen foundations belonging to the Navy, Army, and Air Force respectively, have more than 50 commercial projects under their belt.

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The largest of these, the Fauji Foundation, is known to be worth several billion US Dollars. From making cereals to managing oil terminals and from oil terminals to phosphate projects with the Moroccan government, the Fauji Foundation is one of the jewels of the military’s economic crown.

Moreover, organizations such as the FWO and NLC take care of most of Pakistan’s major construction and logistical requirements, respectively. And not to forget, the Army Welfare Trust. Not only does it run the Askari Bank but also operates an entire airline, Askari Aviation Services.  More than 7% of all private assets in Pakistan are under the direct control of the military. In addition to that, more than one thirds of all heavy equipment is manufactured by army owned industries, even the bread in various cities of Pakistan is supplied by the military owned bakeries. The following table shows assets owned by military companies in 2002:

Source: Military Inc. page#236

Shuja Nawaz in his book “Crossed Swords,” identifies eight housing authorities as the crowned jewels of the military’s economic control. Starting from the era of General Ayub Khan, military personnel upon retirement were given land as a token of their services. General Zia later on, found ways to involve army officers in business ventures by putting lavish cantonments under regional corps commanders. Thus, many senior army officials rose to the occasion and acquired multiple acres of land, which they were later able to sell at exorbitant prices to well-heeled civilians. Today, a major-general on retirement, can expect acres of farm and urban land worth more than half a million USD. Here is a quick look at the land awarded to army officials after retirement from 1965 to 2003:

Source: Military Inc. page# 182

Every year, the military continues to gobbles up more land, expands into new markets and continues to consolidate power in the key areas of agriculture, energy, natural resources, logistics and construction.

The military, however, tends to avoid any direct link to any of these companies or organizations. Army owned organizations are usually headed by the retired officers. Dr. Siddiqa in an interview to media outlet Al-Jazeera said;

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“Pakistan, however, displays more of an indirect exploitation through the retired personnel. They act as primary conduits for the covert use of the country’s resources,”.

They have also found a friend in the form of Pakistan’s Ministry of Defence (MoD). The ministry helps them control four key areas – the services headquarters, military land and cantonments (MLC) and the Fauji Foundation. All of these economic organisations are not directly controlled by the Ministry of Defence, the department is just a means of mobilizing resources, according legitimacy to not only these, but other subsidiary commercial ventures running independently. The MoD helps the military secure a piece in the pie of private business contracts and industrial inputs at highly subsidised rates. Recently, profit-making by retired officers has taken a totally different road when they started providing privatised security services to rich locals and foreigners in security sensitive areas.

The friendship of the Ministry of Defence has also bought them a body that can answer on their behalf to the parliament. In 2005, when the parliament rose a question mark to why the Fauji Foundation sold a sugar mill to a senior retired army officer at a ridiculously low price, it was the MoD that was there to answer. Even in 2016, it wasn’t a military official who presented the ventures of the army in front of the parliament, but it was the Defence Minister, Khawaja Asif. Even after the Auditor General in 2004 questioned why the army was building golf courses, the question was ignored. And at the same time the Punjab government awarded the military with 30 acres of land worth millions to the Pakistan army for the purpose building a driving range and an 18-hole golf course.

It should be noted that all entities under the military pay taxes.

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