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Pakistan’s Biggest Entrepreneurs: The Military

by Mueez Hasan

The News International

“Other countries have armies, but Pakistan’s army has a country.”

For approximately half of its 72-year existence, Pakistan’s armed forces have enjoyed power and authority outside the military sphere. Since the military has not been particularly discrete about it, its frequent indulgence in commercial activities is common knowledge. In a report given to the Pakistani Senate, then Defense Minister Khawaja Asif noted that there were nearly “[fifty] projects, units and housing colonies” in 2016 functioning under the military banner. These business entities were said to be valued at over $20 billion and controlled through the Fauji, Shaheen and Bharia foundations, as well as the Army Welfare Trust, that had been established to provide post-retirement employment opportunities and welfare for ex-servicemen and their families.

The three foundations control a number of business ventures in a myriad of industries, which goes in line with their aim to strategically diversify their investment portfolio. These ventures include but are not limited to: bakeries, petrol stations, banks, fertilizer companies, and industrial plants. A number of these ventures have been successful in acquiring large portions of the market share and benefitting from their affiliation with the army, given its unchecked authority and influence in the country that could assist it in squeezing out competition.

Unsurprisingly, the largest benefactors of these businesses are current and ex-servicemen; it is common practice to endow retiring military officials with high positions at these businesses, regardless of their lack of experience within the industry. While, in essence, this practice should not be problematic, since militaries of other countries partake in such ventures without much controversy, the dire state of Pakistan’s economy makes one think otherwise. The unemployment rate in Pakistan was 5.9% in 2017. Therefore, the idea of allocating seats to army officials who are already at the end of their careers in some of the largest companies of the country disregards properly qualified and experienced job seekers.

Due to the fact that these firms are often being run by people with minimal business knowledge, questions of efficiency and business capabilities also arise, but are shot down by the vast amounts of profits shown in annual reports. Fauji Foundation, for instance, churned out $315 million in profits in 2017. However, out of all of the military-run enterprises, only 9 file public accounts, fanning speculations over their real impacts on the economy.

The profits go into the pockets of military personnel who are already bestowed with innumerable benefits, including both agricultural and commercial lands upon retirement; in short, the practice simply makes the rich richer.

At the same time, it is impossible to discount whether the military’s absolute and unchecked authority allows for it to maximize annual profits. Ayesha Siddiqa’s book, Military Inc., illustrates the extent of the army’s control over Pakistan’s economy. According to the book, the aforementioned businesses control 7 percent of the country’s Gross Domestic Product (GDP). Additionally, the military owns about 12 percent of the country’s land. This level of influence in economic affairs, particularly by trained military men, is highly unlikely to be attained without illicit assistance or by practices such as intimidation and bribery.

Consequently, the military’s involvement in business ventures have been questioned by the court; however, inquiries did not lead to prosecution. In 2018, Justice Shaukat Aziz Siddiqui of the Islamabad High Court questioned the army’s commercial activities in a court hearing, saying that the “Pakistan Army wants to earn as per a commercial model but wishes to be dealt with like an armed force when it commits a crime.” He further commented that the people of the country had been made mental, economic and moral “slaves” by the army through their power-seeking tactics.

Criticism of this sort against the army’s ventures often come up in cases pertaining to the housing schemes it runs. In 2019, the Chief Justice of Pakistan commented on how 60,000 people had been looted in a housing scheme project in which the army was involved. He asked those in court: “which country’s army operates army schemes?” and also highlighted how it was the army’s job to protect the country’s borders, not to participate in commercial activities.

Due to this, public dissent of the army’s commercial endeavors have been growing recently, as illustrated by the recent court hearings. The alleged involvement of the armed forces in the elections also fueled resentment towards the implicit role the army has played in the country’s political and legal systems. While the nation currently celebrates the valor and resilience demonstrated by the army in the face of India-Pakistan tensions, it is high time that the civilian population addresses the military’s iron grip with which it holds the country.

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