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How corrupt is Pakistan's military?

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In a Nutshell:
In 2007, Dr Ayesha Siddiqa, a former researcher with the country's naval forces, published her research in "Military Inc: Inside Pakistan's Military Economy". The book for the first time exposed the rampant commercialism pervading every aspect of the country's military forces. It estimates the military's net worth at more than £10 billion.

In a Press Conference in 2009 the Labour Party Pakistan claimed the value of the national wealth plundered during eight years of General Musharraf regime is far higher than the 11 years of civilian rule of Benazir Bhutto and Nawaz Sharif, estimated at over 2,576 billion rupees (US $31 Billion).

How corrupt is Pakistans military?
Dr Siddiqa's book is currently banned in Pakistan and she has had to flee the country as a consequence.

Land Holdings

Dr Siddiqa found the army owns 12% of the country's land, its holdings being mostly fertile soil in the eastern Punjab.

Two thirds of that land are in the hands of senior current and former officials, mostly brigadiers, major-generals and generals.

The most senior 100 military officials are estimated to be worth, at the very least, £3.5 billion.

Corporate Holdings

Many of Pakistan's largest corporations are controlled by the military, thanks largely to an opaque network of powerful 'foundations' originally set up to look after the pension needs of army personnel.

The largest three comprise:

  • Fauji Foundation,
  • Shaheen Foundation, and
  • Bahria Foundation

All three are controlled by the army, air force and navy respectively. Between themselves they control over 100 separate commercial entities involved in activities ranging from cement to cereal production.

Only nine of these companies have ever published partial financial accounts. All are ultimately controlled by the Ministry of Defence, which oversees all of the military's commercial ventures.

The Fauji foundation, the largest of the lot, is estimated to be worth several billion pounds. It operates:
a security force (allowing serving army personnel to double in their spare time as private security agents),
an oil terminal, and
a phosphate joint venture with the Moroccan government.

Elsewhere, the Army Welfare Trust, a foundation set up in 1971 to identify potentially profitable ventures for the military, runs:

  • one of the country's largest lenders, Askari Commercial Bank,
  • an airline,
  • a travel agency and
  • a stud farm.

Then there is the National Logistic Cell, Pakistan's largest shipper and freight transporter (and the country's largest corporation), which builds roads, constructs bridges and stores vast quantities of the country's wheat reserves.

In short, the military's presence is all-pervasive. Bread is supplied by military-owned bakeries, fronted by civilians. Army-controlled banks take deposits and disburse loans. Up to one third of all heavy manufacturing and 7% of private assets are estimated to be run by the army.

As for prime real estate, a major-general expects on retirement receives 240 acres of prime farmland, worth on average £550,000, as well an urban real estate plot valued at £700,000.

Accountability

Rarely when any constitutional body has stood its ground, the army has given it short shrift.

  • In 2005 the Fauji Foundation was asked by parliament why it sold a sugar mill at an absurdly low price to senior army personnel. The Ministry of Defence refused to reveal any details of the deal.
  • When the Auditor-General's department questioned why the army was building golf courses its question was ignored.

Yet the Punjab government had that year willingly handed over, for free, 30 acres of prime rural land worth more than £600,000 to the army, which promptly built a driving-range and an 18-hole golf course. Such 'presents' to the military are usually returned with interest, with senior civilian officials often being guaranteed a secure retirement on the board of one or more army-controlled ventures.

Craven and submissive attitudes have thoroughly pervaded the political system, which defers to the military at every turn: little wonder that senior officers have so little respect for their civilian peers. Other countries have armies, but Pakistan's army has a country.

Land is being requisitioned left, right and centre across the country.

  • In the financial centre of Karachi, the army has built eight petrol stations on land appropriated from the state.
  • In 2004, the Karachi government again willingly gave land worth £35 million to the military, just because they wanted it.

These are just two examples among many.

A Culture of Opacity

The military has begun to act in the manner of a feudal landlord. When landless peasants in central Punjab complained in 2001 the army had changed the status of the land on which they depended for their subsistence (forcing them to pay rent in cash, rather than working the land on a sharecropping basis) the army cracked down, beating many and leaving eight dead.

Unsurprisingly, the military is loath to release details of its commercial operations.

Musharraf's Era

At a Press Conference in Nov 2009, Farooq Tariq, spokesperson of the Labour Party Pakistan stated the party was of the view that 2,576 billion rupees (US $31 Billion) of the national wealth was plundered during eight years of General Musharraf's rule. This is far higher than estimates for the 11 years of civilian rule of Benazir Bhutto and Nawaz Sharif.

The total national wealth plundered included:

Privatization: 1,550 billion rupees
Bank of Punjab: 7 billion rupees
Petroleum: 83 billion rupees
Stock Exchange 780 billion rupees
Fiddling in aid for earthquake victims: 120 billion rupees
Sugar scandal (2005): 36 billion rupees
Total: 2,576 billion rupees

Conclusion

The average Pakistani citizen earns just £1,500 a year, making his country poorer than all but 50 of the world's nations. Most of the military's junior officers and other ranks live in squalid tents pitched by the side of main roads, even in the capital Islamabad. Revealing to them that the top brass in their air-conditioned, top-of-the-range Mercedes are worth £35 million each (a few are believed to be dollar billionaires including Musharraf) would probably create widespread unrest.

Reform in the country is likely to come from junior commanding officers who are not from this class of officers who seek to maintain the status quo and resist any change.

References

Dr Ayesha Siddiqa, (2007) "Military Inc: Inside Pakistan's Military Economy", Pluto Press

Staggering 31 Billion Dollar corruption under Musharaf, http://www.europe-solidaire.org/spip.php?article16377&fbclid=IwAR10ZBK9EI8jP0FzMuPu64Jx4qaeH5ea-Ytwd12oDBx85GLtPFSMh3M-Kas


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