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Military Inc. Inside Pakistan's Military Economy

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Military Inc. Inside Pakistan's Military Economy Military Inc. Inside Pakistan’s Military Economy Ayesha Siddiqa Reproduced By: Sani H. Panhwar ii To the hope in my life, Sohail, and the wretched of my land We shall live to see, So it is writ We shall live to see, The day that’s been promised, The day that’s been ordained; The day when mountains of oppression, Will blow away like wisps of cotton; When the earth will dance Beneath the feet of the once enslaved; And heavens’ll shake with thunder Over the heads of tyrants; And the idols in the House of God Will be thrown out; We, the rejects of the earth, Will be raised to a place of honor. All crowns’ll be tossed in the air, All thrones’11 be smashed. And God’s word will prevail, He who is both present and absent He who’s beheld and is the beholder. And truth shall ring in every ear, Truth which is you and I, We, the people will rule the earth Which means you, which means I. Faiz Ahmed Faiz America, January 1979 iii CONTENTS Acknowledgements .. .. .. .. .. .. vi List of acronyms .. .. .. .. .. .. .. vii Introduction .. .. .. .. .. .. .. 1 Defining Milbus .. .. .. .. .. .. 5 Literature survey .. .. .. .. .. .. 10 What drives Milbus? .. .. .. .. .. 11 Consequences of Milbus .. .. .. .. .. 16 Milbus and Pakistan .. .. .. .. .. 21 Outline of the book .. .. .. .. .. 29 Chapter 1. Milbus: a theoretical concept .. .. .. 36 Civil-military relations framework .. .. .. 36 A typology of civil military relations .. .. .. 40 The civil-military partnership type .. .. .. 43 The authoritarian-political-military partnership type .. 48 The ruler military type .. .. .. .. .. 51 The arbitrator military type .. .. .. .. 56 The parent guardian military type .. .. .. 61 The warlord type .. .. .. .. .. .. 66 Chapter 2. The Pakistan military: the development of praetorianism, 1947-77 .. .. .. .. .. .. 70 The military institution .. .. .. .. .. 71 The military’s primary role .. .. .. .. 75 The military’s secondary role .. .. .. .. 78 The military in politics and governance .. .. .. 79 Initiation to power, 1947-58 .. .. .. .. 84 The rise to power, 1958-71 .. .. .. .. 88 Returning to democracy, 1971-7 .. .. .. .. 94 Chapter 3. Evolution of the military class, 1977-2005 .. .. 102 The coercive military, 1977-88 .. .. .. .. 103 A thorny partnership, 1988-99 .. .. .. .. 112 Consolidation of power, 1999-2005 .. .. .. 118 Evolving into a military class .. .. .. .. 131 Chapter 4. The structure of Milbus .. .. .. .. 138 The economic empire .. .. .. .. .. 138 iv Level 1: the organization .. .. .. .. .. 141 Level 2: the subsidiaries .. .. .. .. .. 145 Level 3: the members .. .. .. .. .. 155 Chapter 5. Milbus: the formative years, 1954-77 .. .. 158 Setting up the economic empire, 1954-69 .. .. 158 The era of restraint 1969-77 .. .. .. .. 166 Chapter 6. Expansion of Milbus, 1977-2005 .. .. .. 170 Re-establishing financial autonomy, 1977-88 .. .. 170 Civilian military politico-economic integration, 1988-99 186 Consolidating the economic interests, 1999-2005 .. 206 Chapter 7. The new land barons .. .. .. .. 215 The military and land .. .. .. .. .. 216 Urban land acquisition .. .. .. .. .. 229 The sociology of military land .. .. .. .. 249 Chapter 8. Providing for the men: military welfare .. .. 257 Military welfare .. .. .. .. .. .. 257 The Fauji Foundation model .. .. .. .. 260 The AWT model .. .. .. .. .. .. 262 Welfare for individuals .. .. .. .. .. 264 The political geography of military welfare .. .. 266 Chapter 9. The cost of Milbus .. .. .. .. .. 270 The cost of economic inefficiency .. .. .. .. 270 Army Welfare Trust: a financial assessment .. .. 271 Fauji Foundation .. .. .. .. .. .. 278 Shaheen Foundation .. .. .. .. .. 284 Resource pilferage .. .. .. .. .. .. 286 Frontier Works Organization .. .. .. .. 287 Economic opportunity cost .. .. .. .. 288 Chapter 10. Milbus and the future of Pakistan .. .. 298 Recapping Milbus .. .. .. .. .. .. 298 Milbus in Pakistan .. .. .. .. .. .. 299 Milbus and military professionalism .. .. .. 300 The politics of Pakistan .. .. .. .. .. 304 The impact of Milbus in the future .. .. .. 307 References .. .. .. .. .. .. .. 309 v ACKNOWLEDGEMENTS I am grateful to the Woodrow Wilson International Center for Scholars for providing me with funding and the opportunity to spend one year in the United States and research that material that was important for writing this book. I am indebted to Robert Hathaway, Saeed Shafqat and my friend Navnita Chadha’Bahera who took time out of their busy schedule to read some of the chapters and give their valuable comments. Also, a special thanks to Vali Nasr, Ayesha Jalal and Michael Brzoska who gave me new ideas to approach the subject and to look in directions that I had not considered earlier. The list of people I must thank is long. However, I would especially like to acknowledge the help given by Lt Generals (retd) Syed Mohammad Amjad and Talat Masood, Admiral Fasih Bokhari, Hameed Haroon, Ikram Sehgal, Nazim Haji and Riaz Hashmi, who took the time to give me an insight into the military and Milbus in Pakistan. I would also like to acknowledge the help rendered by some of my friends in searching for the material. I am indebted to Rabia Saleem, Junaid Ahmed, Rauf and Shehzad for providing valuable support in search of the necessary materials. I must also offer special thanks to my research assistants, Adeel Piracha, Ajaita Shah, Mahrukh Mehmood and James Murath for assisting with the hard work of finding the appropriate material. Also, a special thanks to Murtaza Solangi, whose moral support was essential during my stay in the United States. Finally, an acknowledgement would be incomplete without mentioning the help and emotional support given by my husband, Sohail Mustafa. He was always there to encourage me to complete my work. I am also grateful to Aziz, Omar and Jamal for making it easy for me to work at home and complete this book. I must also acknowledge the emotional support of my dear friend Saadia Imad who was always there for me. Last, but not the least, I thank the commissioning editor of Pluto Press, Roger van Zwanenberg. His comments on my initial book outline made me think about what I wanted to write. Ayesha Siddiqa vi ACRONYMS ABL Allied Bank Ltd ABRI Angkatan Bersenjata Republic Indonesia (armed forces of the Republic of Indonesia) ACL Askari Cement Ltd ADB Asian Development Bank AEB Askari Education Board AG Adjutant-general AMAA Army Mutual Assistance Association (Turkey) AWACS Airborne early-warning aircraft system AWNCP Army Welfare Nizampur Cement Project (Pakistan) AWT Army Welfare Trust (Pakistan) BICC Bonn International Center for Conversion BCCI Bank of Credit and Commerce International BF Bahria Foundation (Pakistan) CDA Capital Development Authority/Cholistan Development Authority (Pakistan) CENTO Central Treaty Organization CGS Chief of general staff CLS Chief of logistics staff - Pakistan Army CNS Chief of naval staff CoD Charter of Democracy (Pakistan) CPJ Committee to Protect Journalists (Pakistan) DCC Cabinet Committee for Defence (Pakistan) DHA Defence Housing Authority (Pakistan) EBDO Elective Bodies Disqualification Ordinance (Pakistan) FF Fauji Foundation FFC Fauji Fertilizer Company Ltd FJFC Fauji-Jordan Fertilizer Company FOTCO Fauji Oil Terminal and Distribution Company Ltd FSF Federal Security Force (Pakistan) FWO Frontier Works Organization (Pakistan) GHQ General Headquarters IJI Islami Jamhoori Ittihad party (Pakistan) IMF International Monetary Fund ISI Inter-Services Intelligence (Pakistan) ISPR Inter-Services Public Relations (Pakistan) JS HQ Joint Staffs Headquarters (Pakistan) vii JCO junior commissioned officer JCSC Joint Chief of Staffs Committee (Pakistan) KPT Karachi Port Trust MCO Miscellaneous charge order MGCL Mari Gas Company Ltd MI Military Intelligence MLC Department of Military Land and Cantonment (Pakistan) MMA Mutahida Majlis-e-Amaal (Pakistan religious party) MoD Ministry of Defence MQM Muhajir Qaumi Movement (Pakistan) MRD Movement for Restoration of Democracy (Pakistan) MSA Maritime Security Agency (Pakistan) NAB National Accountability Bureau (Pakistan) NBP National Bank of Pakistan NDC National Defence College (Pakistan) NGO Non-government organization NHA National Highway Authority NLC National Logistic Cell (Pakistan) NoC No-objection certificate NPL Non-performing loans NRB National Reconstruction Bureau (Pakistan) NSC National Security Council (Pakistan) NWFP North West Frontier Province (Pakistan) OYAK Turkish Armed Forces Mutual Assistance Fund PAF Pakistan Air Force PCCB Pakistan Cricket Control Board PIA Pakistan International Airlines PIDC Pakistan Industrial Development Corporation PIDE Pakistan Institute of Development Economics PIU produce index units (unit of land ownership) PKI Partai Komunis Indonesia (Communist Party of Indonesia) PLA People’s Liberation Army (China) PMEs Private military enterprises PML-N Pakistan Muslim League (Nawaz) PML-Q Quaid-e-Azam (Pakistan) PN Pakistan Navy PNA Pakistan National Alliance PPP Pakistan People’s Party PPPP Pakistan People’s Party Parliamentarian Patriot PR Pakistan Railways PSO Pakistan State Oil PSO Principal staff officer QMG Quartermaster-general viii RCO Revival of the Constitution Order (Pakistan) RMA Revolution in Military Affairs SAI Shaheen Air International Airlines SCO Special Communications Organization (Pakistan) SECP Securities and Exchange Commission of Pakistan SF Shaheen Foundation (Pakistan) SMS Securities and Management Services TFC Term finance certificate WAPDA Water and Power Development Authority (Pakistan) ix INTRODUCTION The military is one of
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