MILITARY INC. Ayesha Siddiqa. Military Inc.: Inside Pakistan's Military Economy. London: Pluto Press, 2007. 304 p. Reviewed by Gennady Evstafiev
In 2007 Dr. Ayesha Siddiqa, a Pakistani political analyst and Woodrow Wilson Center scholar, published her fundamental research on a specific phenomenon, observed in a number of third world countries, looking into its history, development, current situation and influence in Pakistan. This phenomenon is an increasing participation of the military forces in the business and economic life of some countries, contracted as Milbus. Even though Dr. Siddiqa scrutinized abundant data related to the situation in her native coun try, nearly all revealed trends and methods of penetrating into the economic life of a state are also characteristic of the military in Indonesia, Thailand, Myanmar, more so in Turkey, and to different degrees in a number of other countries, including those in Latin America, and even countries like China (before 1988). The degree to which the military have penetrated into the economy and the general level of their influence in society directly depends on and is proportional to the degree of their access to political leverage and relations with other key political players of a country. Naturally, meth ods used by military circles depend on the historical circumstances in which specific countries emerged and developed, as well as on the nature of relations between civil society and top mil itary echelons, power and influence of specific political institutions in some countries, espe cially the democratic ones. The conclusion made by Dr. Siddiqa is very much well grounded and can be handy in analyti cal research of the role the military play today in developing countries that for various histori cal, economic, and political reasons are prone to long term instability and imbalance of polit ical systems. The author defines six typologies of relation between civil society and the military. Within each of them, the ability of the military establishment to preserve and promote their strictly corpo rate interests depends on the strength of the country’s civil society. Let us not get into the six typologies (described in detail on pp. 41–57). Let us note, however, that splitting military dic tatorships into three types–totalitarian, partnership, and hegemonistic–looks a little far fetched, and, perhaps, makes the object under analysis cumbersome and even overcompli cated. Book review First of all, it is important to understand, what Milbus implies. It is a particular kind of military capital with no entity to govern it, which is essentially different from what we understand as defense budget. Milbus is usually hidden from public view and is often labeled as the military establishment’s internal economy. And these assets are far from being insignificant. Smysl, a Russian magazine, reports that in Turkey «the Turkish military is a corporate economic entity controlling 17 percent of the country’s economy.»1
SECURITY INDEX No. 1 (83), Volume 14 125 Milbus means military capital used fully for the personal benefit of the military fraternity, espe cially the officer cadre, which is neither part of, nor recorded as part of, the defense budget. Its major component is entrepreneurial and other business activity that is not subject to conven tional accounting commonly applied in the country and is used to reward military personnel and their protégés. However, it is obvious that a lion’s share of the revenue goes to the officer cadre, primarily to top military echelons. Notably, either Milbus is controlled by the military right away or it is under their indirect, or sometimes even direct, patronage. Financial autonomy gives the armed forces a feeling of power as well as confidence that they can be independent from incompetent civilian authorities. Milbus is there in many countries: in such ones as the United States, Great Britain, France, Israel, and some others, it has been in place since a historically distant date, but operates via established partnership mechanisms with the civil corporate sector and the government. In other examples, it is manifested in partnership with the dominating political party. However, its pure form as in Turkey, Indonesia, Pakistan, and Thailand, would mean that the military itself and its conscious efforts mainly account for the power of Milbus. Dr. Siddiqa uses the example of Pakistani military establishment to show that the high brass and the whole officer cadre took decades to build up gradually their efforts aimed at increas ing their role and influence in the country’s political life, as well as direct involvement in state policy decisionmaking, even going to the decisive extreme, which opened a gradually widen ing opportunity for a strong penetration into the economic side of life in Pakistan. The author notes that activities of the military and their economic entities in Pakistan (where they are grouped around two powerful business conglomerates, Fauji Foundation, and Army Welfare Trust) are extremely self centered and rather predacious. Just to mention: the first of the two groups controls at least 17 major enterprises, from mineral fertilizers, including a mining com pany in Morocco, cement, gas production and oil distribution, and even educational and train ing facilities. The leadership of this military conglomerate claims that they offer charity to 8.5 million of former servicemen and members of their families. In its turn, Army Welfare Trust, established in 1971, controls 26 major industrial, agricultural, and commercial enterprises, also representing banking, leasing, and insurance; and is involved in 13 other projects as a shareholder. The conglomerate’s staff alone includes around 5,000 of former military person nel, its assets exceed $862 million, considered significant in Pakistan. All this started with Act 1860 and a pitiful initial endowment of $12,000 to «generate funds for the welfare and rehabil itation of the orphans and widows of martyrs, disabled and retired personnel of Pakistan Army,» baby needs new shoes! In their turn, members of the Pakistani Air Force have established their own foundation called Shahin, which also started modestly, but raised its assets to $35 million with the annual turnover exceeding $10 million. Naturally, the majority of Shahin commercial activities are linked with aviation business. The Pakistani Navy doesn’t fall too far behind creating its own business entity under the name of Bahria Foundation, which, obviously, as in the examples above, is headed by former and active admirals and officers of the Navy. The Navy is involved in 19 major projects and possess even larger assets than the Air Force–$69 million. When explaining activities of the above Milbus units in Pakistan, it should be noted that there are some vital organizational points that lie beyond any legal framework and account for their success. The figures above vividly demonstrate that military groups with strong political influ ence and financial autonomy within the country use both their political power and their finan cial autonomy to establish a business empire, which today uncontrollably uses billions of dol lars to its own strictly corporate ends. Justifying this idea, the analyst mentions nearly com plete lack of transparency in operations of military controlled companies, as well as no finan cial monitoring by the government together with preferential tax treatment of military corpora tions, which have long been backed by their claimed charity status. Amazingly, even today Fauji Foundation and Army Welfare Trust pay only 20 percent of corporate income tax, which is incomparably lower than the figure for civilian corporations. Even more amazing is the fact that Shahin and Bahria Foundation, though with much less influence in the country, pay 30 percent of corporate income tax. A well known rule in Pakistan: the Green machine rules the game.
126 MILITARY INC. Success and commercial advantage of the military is most obvious in appropriation of land. Thanks to its political influence, Milbus managed to decorate the affair good and hard. Land appropriation is in line with best practices of feudal traditions in Britain under the so called Colonization of Government Lands Act of 1912 at a pitiful price ranging from 40 cents per acre in 1960s to $1.2 per acre in mid 1990s. Today, the average price of an acre exceeds $4,000, with the total value of Milbus owned land property approaches $12 billion in Pakistan, as esti mated by Dr. Siddiqa. In some cases, large lots of land still remain untaxed. This way, the mili tary got over 11.5 million acres (5 million hectares) of land. Keep in mind: it translates as 12 percent of all government land (p. 174). A land reform that took place never affected the interests of generals and top officers, who used the time under a number of military administrations in the country (in fact, military dicta torships) to turn into outstanding land owners and managed to stream a significant share of foreign economic aid in the 1950s 1960s into implicit subsidies to gain upper hand in the agri culture. A prominent statesman ended up claiming that «foreign aid was designated for the Army.» Or was it? Interestingly, as Dr. Ayesha Siddiqa argues that even today generals, includ ing Pervez Musharraf himself, Admiral Abdul Aziz Mirza, and others, use military personnel in Pakistan Army active service for security and agricultural works at their lots, in Bahawalpur, to name one. Even more illustrative is the penetration of Milbus in urban land and housing, which started at full swing after 1999, i.e. after the current regime had come to power. The most exposing fact, however, is that out of the 46 housing development projects directly carried out by Milbus none gives an opportunity for the lower ranks to join in. Everything has been ceased by top officers and business circles with ties to them. All this happens in a country that has a shortage of 6.3 million houses, that is why even the military has its layer that is against this collusive cor ruption (p. 198). It becomes evident that Milbus in Pakistan acts as a state within a state, pursuing its strictly corporate and highly self centered interests on the account of the rest of the country’s popu lation. It also becomes obvious that military regimes, which four times came to power in this country during its 60 years of independence, have significantly mutilated people’s idea of democracy, justice, and opportunity for a change. No wonder that Milbus, having become an integral part of Pakistan’s current state, economic, and political systems, will fight gloves off to keep its privileged position of the country’s de facto master and hinder democratic change. Here comes another question. For decades, Pakistan has been one of the major strategic part ners of the United States in Asia, while in its presence, and, dare say, with its direct involve ment, democracy in Pakistan has been sterilized systematically, whereas the Washington raised issue of democratization of a kind in the Greater Middle East was never applied to Pakistan. Simple: political circumstances are such that this country remains a key strategic partner for the United States. Analysts focused on South Asia would probably find most interesting information on those 50 pages (pp. 129–179) of Dr. Ayesha Siddiqa’s book that describes how Milbus in Pakistan emerged. The first practical step was made in 1954, when the Army’s leadership showed its intent to have a larger niche in Pakistani society that would go far beyond security and border control. Unlike its neighbor India, which allocated funds received from Great Britain under Post war Reconstruction Fund to those having participated in military operations during World War II, Pakistani generals chose to invest the money in large industrial projects. Ayub Khan, the commander in chief of the Pakistan Army at that time and a future military governor (dictator) of the country, made a lot to develop Milbus promptly. However, back then (1954–1969) this military dictator boosted not only the military: he rendered significant assistance to 22 families, Book review who are well known in the country today and own 68 percent of industrial infrastructure and 87 percent of the government’s bank assets. A shrewd political move was construed to respond to the disaffected as well as the opposi tion–the so called EBDO (Elective Bodies Disqualification Ordinance, 1959), which appears to have eliminated from the political life a group of once famous politicians accused of corruption
SECURITY INDEX No. 1 (83), Volume 14 127 and plotting against state security. A verb appeared–to ebdo–a few hundreds had to go through this ordeal. This alone had a lasting intimidating effect upon the ruling elite of Pakistan, which opted for a keep low profile strategy. Pakistan since then has been referred to as a con trolled democracy. As in Turkey under Ataturk, actions of the military regime in Pakistan were regarded as a meas ure necessary to ensure defense and economic security under constant threat from India. But it is at that time, during the so called great revolution of Ayub Khan, top generals came to understand that if compared with officialdom military officers «have better analytical skills; are also intellectually and morally superior.» Thus, within the mentioned 15 years, when the military in power was at peak influence, Milbus received a strong development impetus. However, dur ing a strong political crisis (1969–1972) followed by a relatively short period of civil administra tion under Zulfikar Ali Bhutto stagnation of Milbus was evident, which determined a tragic out come for the prominent, though terribly inconsistent, civilian prime minister. A period of mod erate growth began, when internal military economy was growing at a slower pace, and during the dictatorship of General Yahya Khan, there were no major breakthroughs, probably except for the mentioned Army Welfare Trust established in late 1971 by a group of army generals in rivalry with Fauji Foundation. End of Bhutto era in 1977 and top military echelons back in power meant an end of the mod erate growth period for the political and financial autonomy of the military. A new era began, when the military, now convinced of their role as savors of the nation, were finally confident that they have an unwritten right to appropriate part of national resources nearly without limits in order to strengthen their professional corporation. As Dr. Ayesha Siddiqa puts it, a period of economic predation was set off. In 1977–2005 Milbus continuously expanded into political and economic life in Pakistan. These years mark success of the army’s policy to gain a permanent role in state decisionmaking. During the decade of Zia ul Haq’s dictatorship (1977–1988) as well as that of Pervez Musharraf, the current Head of State, dozens of various legal and constitutional provisions were adopted, including establishment of the powerful National Security Council (NSC), which is the core decisionmaking body (ten NSC members include four heads of army branches beside President Musharraf himself). These provisions have made the military into equal part ners of all layers in the political elite when developing the country’s foreign and home policies. In the economic life, it was manifested in special decisions that enabled an increase of the mil itary in business. When talking in private, people from the military consistently deny any con nection between their political control of the country and their increased role in its economic exploitation, while facts and arguments given by Dr. Siddiqa effectively invalidate these attempts. Mere existence of secret regimental funds sanctioned by dictator Zia himself, which are not subject to accounting or audit, is self explanatory and supports claims of abundant financial corrupt practices within top officer circles. Let us not list all of the numerous examples of malversation by military personnel of all stripes, detailed descriptions of many can be found on pp. 142–151. Just one thing to add: only this secrecy and covertness even before government monitoring agencies and under no control on the part of Milbus itself could lead to a secret international black market network for nuclear and other strategic technologies with Dr. Abdul Qadeer Khan, the father of Pakistan’s nuclear bomb, who kept close connections with top military leadership of the country for many years. It is the same method of applying Milbus Pakistani style, but in a very tricky and dangerous sphere. This review will not contain any further information on this topic, but only note that Abdul Qadeer Khan is not the only example of control lack. Those looking for additional evi dence to prove that activities of Milbus in Pakistan are dangerous can be referred to the new book by a former CIA Director George Tenet describing some Pakistani NGO called Umma Tameer e Nau (UTN) comprised of retired military personnel and nuclear scientists that ren dered consultancy to Al Qaeda on creating weapons of mass destruction (WMD).2
128 MILITARY INC. It seems that the habit to appropriate financial resources, including and primarily those com ing from abroad, has been ultimately detrimental to the morals of Pakistani military back dur ing the notorious Soviet war in Afghanistan. Even now, during the U.S. global war on terrorism under the leadership of our U.S. partners, some important military ranks and civilian bureau crats occasionally reveal unexplainably large private money. Strengthening of the military and their role in governance was translated as submitting to power. E.g. under dictator Zia 18 out of 42 ambassadors were generals. Even more true for the officialdom. After elimination of dictator Zia, a period of consecutive civil administrations followed but did not introduce any significant change, while the leaders tried to offer additional perks to the mil itary to keep them on their side in a tight political struggle. But their hopes were in vain: Milbus had gained enough momentum and only waited for the right moment to get back to the top and seize an even larger share of the economic pie, which finally happened when Prime Minister Nawaz Sharif was removed from power, which fell in the hands of another general, Pervez Musharraf, and the cycle began anew. As demonstrated by Dr. Siddiqa, Milbus activities are usually hidden from public view. Besides, it serves to the benefit of a very limited group. Efficiency of business run by the military is doubtful, often it results in a heavy burden for the military and national budgets, used by Milbus to cover the deficit. All this hinders the development of a free market economy. This is made obvious on pp. 219–225. Dr. Siddiqa’s another argument that should be looked at very carefully: the military regime claims that it aims at limiting religious extremism and militancy. However, even Pakistani press sees double standards here. Dr. Ayesha Siddiqa raises a number of reasonable questions. How does Milbus contribute to restructuring social relations? Should an increase of extremism and xenophobia be regarded as inevitable downsides of this very Milbus? She does not answer these key questions, leaving that to the reader. However, Pakistani readers are unlikely to read Dr. Siddiqa’s book and find answers. There is no doubt that the military regime will not tolerate this book in Pakistan. Nevertheless, I would like to conclude this review with a verse by Faiz Ahmed Faiz, a modern democratic poet from Pakistan: The outcast lands, us Will get the deserved place; And all will hear the truth: It’s in your face and my face… We will live till the day Heaven promised to us: Heaps of violence go away As cotton by wind cast. And then the land will rejoice...
Notes:
1 Smysl, May16 31, 2007, p. 52 2 George Tenet, At the Center of the Storm: My Years at the CIA (New York: HarperCollins Publishers, 2007), pp. 262–263. Book review
SECURITY INDEX No. 1 (83), Volume 14 129 DISGRACE, COURAGE AND EPIPHANY: 444 DAYS THAT CHANGED AMERICA Mark Bowden. Guests of the Ayatollah: The Iran Hostage Crisis, the First Battle in America's War with Militant Islam. Atlantic Monthly Press: 2006, 704 p. Reviewed by Konstantin Eggert
In my opinion, Mark Bowden is an unsurpassable investigative reporter in the present day United States and, perhaps, even in the world. Even recent works of such master of investiga tions as Bob Woodward wan in comparison to the latest book by Bowden, who is the author of such classics as Black Hawk Down and The True Story of Killing Pablo. The tragedy of the failed U.S. Marine Corps operation in Mogadishu in 1993 and the story of elimination of Colombian drug dealer Pablo Escobar and his empire brought fame and fortune to the Philadelphia born writer. Ridley Scott bought the rights to Black Hawk Down and made a movie marked with two Oscars. Mark Bowden’s new book – Guests of the Ayatollah – is a qualitatively new story in plot, action, characters and even the scope of the problem. It tells about the start of epic confrontation between the United States and radical Islam. And Bowden, unlike many of his colleagues, demonstrates here his unprecedented instinct of a historian. His readers travel in time – together with hostages, rangers, who were sent to save them, politicians and, notably, Islamic radicals themselves, who seized the U.S. embassy in Tehran on November 4, 1979. This may sound paradoxical, but the 1979–1981 crisis is ill depicted in literature. The U.S. Iranian relations per se made a topic for dozens and even hundreds of volumes. But the seizure of the embassy and the following drama are regarded in these books as a part of a large mosa ic. There are a few memoirs written by ex hostages. Some of them, e.g. ex CIA agent Bill Daugherty’s reminiscences1, are quite exciting. However, all these stories suffer from the same flaw – hostages were in isolation, sometimes in solitary confinement. And their individual expe riences, though quite interesting, can give only a limited impression of the general turn of events. Guests of the Ayatollah is a unique book to a certain extent. Bowden interviewed dozens, if not hundreds of people – in America, Iran, and Europe. Most of the participants are alive and, hence, the book is read as an investigation, political essay, thriller and a collection of human stories, sometimes of ordinary people, who found themselves in extraordinary circumstances against their own will. The way they accept this challenge, try to survive and keep human dig nity is a major line in Mark Bowden’s book. Guests of the Ayatollah are rich in details – all 444 days of the crisis are described hour by hour. Chronicles of November 4, 1979 – the day of the embassy seizure – take nearly 100 pages. The ability of the author to create the atmos phere of improvised hostage cells, Iranian Foreign Ministry, or the White House make the story easy to read and serious book at the same time. It sounds like a novel, but remains a strictly documented political investigation. Bowden’s impartiality adds credibility to the book. On the one hand, he does not feel sympa thy to the Iranian regime. On the other hand, he does not have warm feelings to the shah’s era. In fact, quick review of the U.S. Iranian relations from World War II till the collapse of the Pahlavi
130 DISGRACE, COURAGE AND EPIPHANY: 444 DAYS THAT CHANGED AMERICA dynasty is, perhaps, the most vulnerable part of the book. Trying to avoid accusations of bias, the author describes Shah Mohammad Reza Pahlavi as a politician totally dependent from Washington. In reality, the situation was much more complicated. The shah was a principal ally of the United States in the Middle East, but he was playing his own game and balanced between the U.S.A and the U.S.S.R. Mohammad Reza Pahlavi tried to transform Iran into a regional superpower with global ambitions. To a certain extent the current regime in Tehran does the same now. Mistakes of the monarch, as well as his achievements, were analyzed in detail a long while ago. After thirty years of Islamic regime broad public in modern Iran feels nostalgia for the shah’s epoch – it is enough to have a short conversation with intellectuals in Tehran, taxi drivers, or shopkeepers, in order to understand this. The stories of the hostages make the core of the book. Among key characters is a young diplo mat Michael Metrinko, who spent the entire period of imprisonment tete `^ a tete^ with Islamic radicals. A fluent Farsi speaker and aficionado of Iran, Metrinko refused to collaborate with Khomeini’s followers. Beatings, dungeons, tiresome interrogations and verbal duels with jail keepers – nothing managed to force Metrinko to weaken or soften his attitude to the Islamic students. Most of the hostages behaved in the same manner, albeit there were some exceptions. Iranians called Army Sergeant Joe Subic Brother Subic for his desire to execute any demands of his jailors. He was one of those who willingly posed on TV speaking about good treatment of hostages by Khomeini’s followers. Another figure – and we see the story through his eyes – is Bruce Laingen, one of three Americans who were in the Iranian MFA at the time of hostage taking. They stayed there – first, as apparently under protection and then as de facto hostages. Laingen kept a diary and he managed to save it and take away from Iran. This is the only written source directly fixing every detail of the crisis from inside. It has lots of details, which seem surrealistic today. For instance, the following anecdote – diplomats searched the MFA building during the nights, sometimes hiding from the guard under tables, and accidentally found a phone that allowed them to speak freely to other western embassies. However, Laingen’s diary is an exciting reading for other reasons as well. It gives a full impression of confusion, and not only inside the U.S. embassy. At the moment of fierce struggle between moderate Iranian leaders (such as Ibrahim Yazdi and Abolhassan Banisadr) and radicals surrounding Khomeini, U.S. diplomats believed in prompt normalization and transformation of Iran into a secular republic with Islamic specifics. Though Guests of the Ayatollah does not bring any sensations, there are a few episodes worth mentioning. First of all, such detailed review of the behind the scene talks on liberation of hostages has never been given before. Secondly, Mark Bowden analyzes the preparation, implementation and failure of the U.S. raid to Iran in April 1980 – so called Operation Eagle Claw. This was a failed attempt of the famous Delta to assault the embassy and free the hostages. The operation was ceased when helicopters began to break one after another. And when one of the heli copters crashed into a refueling aircraft at the assault ground in the Iranian dessert, the raid turned into a catastrophe – eight servicemen were killed and four injured. Iranians were happy and celebrated the victory, while President Jimmy Carter actually lost the last chance for re election. By the way Carter is not described in Bowden’s book as a weak willed politician, as many see him today, but as a person who faced insurmountable impediments. So whatever diplomatic or military decisions he was taking, circumstances were always against him. But this did not hap pen by chance. Carter’s hesitation and tough thoughts of Charge d’Affaires Laingen reflected the Vietnam syndrome of the U.S. diplomacy as such. Demoralized by the defeat in Southeast Book review Asia, Watergate and revelations in the U.S. Congress about CIA secret operations, American foreign policy elite lost any reference points in the late 1970s and lost the very ability to analyze the reality and formulate national interests. In this context, lack of understanding of processes going on in Iran after the Islamic revolution is similar to the panic of U.S. politicians after the Al Qaeda attacks on September 11, 2001. In
SECURITY INDEX No. 1 (83), Volume 14 131 both cases the shortage of information and even elementary knowledge of the region (e.g. only a few members of the embassy staff in Iran spoke Farsi) has resulted in incorrect analysis and erroneous decisions. The hostage taking demonstrated to the world the then weakness of the United States and gave impetus to Ronald Reagan’s conservative revolution. On the first days of his presidency captured diplomats returned home. Tehran hated Carter so much that did not want to give him even the slimmest chance to declare the end of the crisis. Most probably, Khomeini could not guess that under President Reagan tough resentment of the Islamic revolution and theocratic regime would become major principles of the U.S. foreign policy in the Middle East. This principle will hardly change even if Democrats win the coming elections. Too much is on stake, the confrontation is too lengthy, and nothing can bridge the gap in mentality of decisionmakers in Tehran and Washington. This cold war of the new era will not be over in the near future, or it may end up with a tough regional conflict. Guests of the Ayatollah is a book explaining why one of these approaches is inevitable. Notes:
1 William J. Daugherty, In the Shadow of the Ayatollah: A CIA Hostage in Iran (Annapolis: U.S. Naval Institute Press, 2001), 258 p.
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