Awakened to the power of the military economy

August 26, 2007 at 10:44 am 12 comments

ayeshaI am one of those people who had never really thought about the economic involvement or economic might of the military in Pakistan until yesterday. I was awoken from my ignorance at an event sponsored by Oxford University Press at The Second Floor yesterday evening.

Dr. Ayesha Siddiqa, author of Military Inc. – Inside Pakistan’s Military Economy, was the chief guest. She was there to talk about her book – the background, the research, the possible solutions to the problems she had highlighted in Military Inc., and the reaction from various quarters. As expected, the event was packed to capacity – and included people like Wajid Jawwad (former Chairman of EPB), Asad Umar (head of Engro), Tammy Ayesha Haq (of Business Plus), loads of media people – prominent among them Ardeshir Cowasjee, Ghazi Salahuddin and Asif Noorani and the Dawn News team. The surprise visitor in my view ardeshirwas Zafar Khan, the new Chairman of PIA. Apparently he is also a key member of the Pakistan Fellowship Foundation that sponsored Ayesha Siddiqa’s visit to the United States to carry out research on the subject. Also present were young media practitioners, teachers, researchers, writers, doctors and other people from civil society. Very good turnout.

Military Inc. digs into the vast and expansive empire that the Pakistani Military has set up in Pakistan over the past 6 decades.

The central argument of the book is that `Milbus’ (combining the words military and business) perpetuates the military’s political predatory style, resulting in the military’s influence in all aspects of Pakistani society. Profit, says Dr. Siddiqa, is directly proportionate to power and that this is both a cause and effect of a non-democratic political system.

ayesha siddiqa with her book`Milbus’ is defined by Ayesha Siddiqa as military capital used for the personal benefit of the military fraternity and their cronies. It refers to all activities that transfer resources from the state to an individual, a group or a company within the military or set up by the military. She says that these activities do not figure in the defence budget nor are they subject to the normal accountability procedures of the state. They are either directly controlled by the military or enjoy its patronage.

Although the beneficiaries are primarily senior military officers, both serving and retired, Ayesha Siddiqa says that the `Milbus’ benefits a wider circle of civilian businessmen and politicians who have supported it for their own personal gain.

She says that industries run by military or ex-military officials include steel mills, sugar factories, cement factories, gas stations, boot manufacturing companies, fertilizer factories, cereal factories, banks, logistics companies, construction companies and utility companies.

Some of those present at the event shared stories about how military enterprises had impacted adversely on different types of businesses. There were questions on possible ways to send the military back to the barracks and to expunge them from the economy of the country so as to reduce the excessive influence that they exert on all aspects of Pakistani society.

the panelMost people at the event were not anti-army. However, they were all in agreement that the army should focus on what they were set up to do rather than involve themselves in other activities of the state. According to the author/researcher, politicians, businessmen and civil society needed to take responsibility for the state of affairs that existed and needed to start a movement that would change the status quo if Pakistan is to take the first steps towards becoming a democratic state.

For me the evening was educational as well as scary. I guess there are many like me who are a-political and subconsciously close their eyes to the realities that exist around them. Maybe we should be more involved if we would like to see things change.

Kudos to the courage of the author Ayesha Siddiqa for taking on this task, to the Pakistan Fellowship Foundation for supporting it, to OUP for publishing the book against all odds and to The Second Floor for organizing yesterday’s event (and providing free food and drink – the lemon tarts were superb). Apparently, when the author and OUP tried to launch the book in Islamabad, there were all sorts of hurdles that kept her from doing so. The Islamabad Club cancelled their booking and hotels were advised not to provide space for the event.

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Caught in the act! Great show! Well done Dawn News!

12 Comments Add your own

  • 1. owaisz  |  August 26, 2007 at 12:01 pm

    Hi Jehan…This is a two edged sword. Regardless of what is being said – this kind of economic activity has helped the country. There is a tricke down effect into the economy. Our P@SHA member companies provide IT Solutions, other nonmilitary companies provide other kind of solutions to them. There is employment generation for a lot of civialians. The businesses are part of the documented economy – they contribute to the GDP and pay taxes.

    I wish, I had known about it and would love to share this perspective with the people going crazy with concern.

    Let me give you a scarier perspective – The Fundo-religious economy. You will be amazed at the size of it and worse still it is not even part of the documented economy.

    Reply
  • 2. Teeth Maestro  |  August 26, 2007 at 2:44 pm

    I too was at the event – but by the looks of the pictures the pillar blocked our line of sight (I was at near the counter area)

    I think Ayesha shared some interesting perspectives and for a short statured lady she has indeed had the courage to take on a giant.

    Owaisz – I think the book actually discusses the impact of MilBus, its cronyism, unaccountability and the ‘very’ minimal trickle down effect considering the amount of budget they suck out of our national exchequer that is a point of concern. When you see the Army extract over 60% of your budget compared to a depleting economy with very minimal job openings that is what Ayesha Siddiqa tends to highlight.

    PS – I think it was Pakistan Democratic Foundation
    PPS – will update Bloggers.pk with your request hopefully today

    Reply
  • 3. Jehan  |  August 26, 2007 at 3:21 pm

    Owais, I think it is important for you to read the book. I am not saying that the army is irrelevant. I don’t think Ayesha Siddiqa is either. The problem is of a different sort. For instance one gentleman pointed out that there were 5 or 6 companies providing boots for the military until a retired miliary officer opened up a company. Now the army uses only one vendor for all its boots. Would you like to guess which one?

    Asad Umar of Engro is a third generation army brat and yet he said that his company suffers because the army is in the same business and Fauji Fertilizer has a better bet getting public sector projects because of their ‘connections’.

    Look at our own industry Owais. At first NADRA opened up and worked on the ID cards and the passport and now they bid for a number of the large projects – and because of their connections, and being part of government, they win.

    Certainly some of the retired military officers may run legitimate businesses and win projects on merit but apparently very few.

    I agree with you regarding the fundo-religious economy. That scares me too.

    TM, the Pakistan Democratic Foundation was represented by Tammy, the two Asads and various others but the ones who funded Dr. Siddiqa’s trip to the US was the Pakistan Fellowship Fund which was represened by Zaffar Khan and Munnawwar.

    Sorry I didn’t know you were there. Next time we must meet up.

    Reply
  • 4. temporal  |  August 26, 2007 at 7:04 pm

    jehan:

    some thoughts:

    following the question answer it is hard to visualize how she could have “defended” her thesis

    she was visibly upset at some questioners whom she perhaps unfairly and un-substantively deemed unfair and critical of either herself or her book

    also in answer to a question she called this book…(already a best-seller acc. to amina saiyid) a “book in progress”…

    am willing to give her the benefit of doubt…perhaps she meant a series in progress…but if i am wrong then she has contempt for the readers…

    i wanted to ask her a loaded question, “who’d ring the bell?”…but thought better and refrained:)

    despite what we hear about the proactive and emboldened SC…it appears choosy and selective and would not be able to control the army behemoth…

    notice their reluctance to entertain asghar khan’s petition that ardeshir cowasjee tires not of repeating AUG 05 and AUG 26!

    and this despite the fatc that the former SC chief had already delivered a verdict!

    (pursuing that one can guess how it would be a disaster NOT ONLY for the army (ISI) but also the political parties which may be taking part in the forhtcoming elections

    khair

    good write up and nice blog:)

    Reply
  • 5. mansoor  |  August 26, 2007 at 7:10 pm

    To me, most of the hue and cry about the book seems to be blown way out of proportion. Mr. Umar Asad was right on the mark when he said that such an institution could not be around for so long if there were no outside interests which wanted to see it continue for their own gain.

    One thing i must mention here is that before the creation of the Shaheen, Askari and Bahria foundations, have you known what happens to military officers after they retired? Did you know that they were almost unemployable since the military style of working did not fare well in the private sector and hence no one wanted to employ them in the first place?

    I’ve seen many ex-officers whither away after retirement, either living off the pensions or working menial jobs to make ends meet. Can u imagine a family going from a large 3 bedroom apartment in a naval colony to a two bedroom house which would have fit in their previous drawing rooms?

    From what i’ve seen, these institutions came around to provide a means of sustenance to the men who had dedicated their lives to serving their country and the country which had abandoned them afterwards. Now they are suddenly successful and everybody is blaming them for doing that?

    Its only recently that ex-military officers are preferred for jobs in the private sector and that too since after retirement they still have clout within the service for 2 to 5 years and private companies wish to utilize that clout.

    P.S
    these facts are for the three organizations i mentioned previously, namely Bahria, Shaheen and Askari. As for NLC, SCO and others.. i reserve my comments for want of verifiable information.

    Reply
  • 6. mansoor  |  August 26, 2007 at 7:11 pm

    P.P.S
    sorry for the long comment, but after the near brawl at the t2f event, i decided not to voice my concerns on that forum :p and your’s is the first review on it

    Reply
  • 7. Vic  |  August 26, 2007 at 7:34 pm

    It is a harsh reality that our methods of running armies is very different from other kinds of organisations. When people in the military retire, it is indeed hard to find meaningful employment in the civilian sector. Obviously some kind of worthwhile work needs to be found for a huge range of men and women, some highly educated and motivated over years and decades to run a tight ship.

    Equally obviously, this comes at a further ongoing cost to society. Someone (TM) has pointed out here that the upfront cost is 60 per cent of the budget. If the additional cost is factored in, and then the cost of the fundoo-religious bodies (an their retiring old personnel) is slipped into the mix, one may find the numbers exceeding 100 per cent! and rightly so, because our most diligent and honest economists (I am thinking of Mahbub-ul-Haq in particular) died without finding an answer to the problem of correctly accounting the economy.

    Well, that takes care of the two largest institutions mentioned in the blog and the comments. And who, pray, looks after ordinary citizens, who do not spend their entire lives working out better ways to kill people, yet one day, too, must ‘retire’ and be farmed out to smell the daisies?

    Are they suddenly unfit to participate in society, these people who run the banks and the administration, who make the music and the films, who teach our children, who fix the bicycles and change the bulbs and keep the buildings clean? These people who look, act and talk suspiciously like you and me?

    Have they spent their lives doing anything less important than the military officers and servicemen, in whose name Milbus is justified, as owaisz points out?

    Is this the kind of society human beings need, that always finds ways to divide the pie unequally, by arguing that there wasn’t enough to go around anyway?

    Reply
  • 8. Jehan  |  August 26, 2007 at 7:41 pm

    Temporal, I think she called it a “work in progress” because she felt that more information had not been available out there for her to create a more complete work, and also that she had not offered any specific solutions for “belling the cat”. In fact in the Q&A she said she considered the book as a first step and hoped that someone else would take this issue forward.

    I agree with you though about her impatience with some of the questions because apparently it seemed as if she felt the questions were being asked without her book having been read. Some of the questions should have been answered in more detail and perhaps would have been. I feel there wasn’t enough time to actually hold an interactive discussion. People wanted to ask so many questions. There were some who wanted to comment. Perhaps we need another longer session.

    Mansoor, please don’t apologize for the long comment. I think what Asad Umar said was that the Army could not have ruled this country for so long unless they had the support of external forces which all of us know they have had.

    Whereas I agree with you that retired army officers have continued to be productive due to the setting up of these institutions, how are they different from other retired people like for instance my father and some of his friends who have also retired but still have much to contribute? Who will set up foundations for them? I think Vic has said it beautifully. Has the contribution of teachers, doctors, administrators, bankers, etc been any less to society? Don’t they deserve to be given a chance to go on working if they so wish? Perhaps opportunities should be created for them too. The economy needs a re-think.

    Reply
  • 9. temporal  |  August 27, 2007 at 2:22 am

    mansoor:,

    …have you known what happens to military officers after they retired? Did you know that they were almost unemployable since the military style of working did not fare well in the private sector and hence no one wanted to employ them in the first place?

    i hate to disagree with you , sir!

    let us turn this argument on its head…’what happens to any retired person?’

    almost every single one of them loses the perks of whatever organization they were working for – govt. or private

    why should military officers be the only one getting sinecures?…they still retire with a decent pensions and plots of lands…

    you have already alluded to them being … almost unemployable since the military style of working did not fare well in the private sector and hence no one wanted to employ them in the first place?

    and look at the irony… they are parachuted into govt. and semi govt. bodies about which they are totally un-equipped…

    the argument that they serve the country is a flimsy one….if i join pia as a pilot..i expect to fly…and willingly accept the hazards of the job…(the plane might crash an di might lose my life)….similarly if i join the army ….and our army is a volunteer army not a conscripted one…then i might lose my life in the course of duty…i will call it occupational hazard….

    we should worry more about people who retire without pensions…like our drivers or servants and chowkidars…rather than worry about the military officers

    no offence intended:)

    Reply
  • 10. owaisz  |  August 30, 2007 at 5:24 pm

    cronyism, nepotism and taking away business from private sector are all fine allegations and quite true.

    I am not in favor of military running so many businesses. But friends please correct me if i am wrong, but in a global economy you dont have to afraid of them taking away any business from you. All customers will evaluate you on your relative merrits. The bigger concern is corruption in the private sector. Please ask someone trying to do busness about 500 kms north of karachi. The amount of corruption is so bad that if you are unfortunate enough to get some business and are not prepared to handle it right you are screwed.

    In development economics we read the corruption theory. It flows downwards from the upper echelons of the society to the lower ones and then there is a tipping point where the definition of corruption reverses. Since corruption is defined as the deviation from establised norms, the honest one is the corrupt since he/she is deviating from the norms. I believe we have reached that point in this country.

    On the positive note – there is enough business out there for people/firms with delivery capability.

    As I said in my earlier posts – there are much more scarier and dangerous creatures out there.

    Reply
  • 11. owaisz  |  November 6, 2007 at 11:03 am

    Interesting news…now confirmed….she was funded by India

    Reply
  • 12. The Second Floor (T2F) - Media  |  July 5, 2008 at 1:08 am

    […] Ayesha Siddiqa, Author of Military Inc. at T2F In The Line of Wire […]

    Reply

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