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A special report
How Pakistan’s ISI funds its proxy war
By Syed Nooruzzaman

That the Inter Services Intelligence (ISI) Directorate of Pakistan has been pumping in crores of rupees to sustain the proxy war unleashed on India is a well-known fact. But how is the huge fund generated? How does it reach the militants fighting the undeclared war in the Kashmir valley?

According to information collected by The Tribune from various agencies and individuals, the ISI is working in collaboration with the All-Party Hurriyat Conference and its component Jamaat-e-Islami of Jammu and Kashmir, the United Jehad Council and the Markaz al-Dawah al-Irshad for raising funds to keep up militancy in the valley. Even the money received as “zakat” — a kind of religious tax which Islam enjoins upon a certain category of the believers for the welfare of the needy — is used to fund this nefarious scheme.

If the ISI has its own funds earmarked for the dirty game, the militant outfits operating from both sides of the border have set up their front organisations for collecting money to pay the “mujahideen” engaged in “jehad”. The most dependable — from the ISI’s point of view — network is being run by the Hurriyat. The Jamaat has set up a memorial trust to attract donations mainly from abroad. The Markaz al-Dawah has its headquarters at Lahore and collects huge sums to fight the so-called “holy war” in Kashmir.

Surprisingly, militants are not the only people to benefit from these funds received mainly as donations. Certain politicians too have had their share. However, donations are not enough to lubricate the proxy war. There are certain other ways also to ensure an uninterrupted supply of money. These include: (1) sale of narcotics on a large scale (the United Nations Drug Control Programme has it that the ISI annually makes around $ 2.5 billion through this source and it must be spending anything between Rs 537.5 crore and Rs 1,075 crore on fuelling militancy every year); (2) printing of fake currency notes by the National Jehad Council at its printing press at Muzaffarabad in occupied Kashmir; (3) collections made in West Asia and European countries for the Jehad Fund; and (4) extortions from traders, contractors and other moneyed people.

Money from foreign sources is received through the hawala route. There is also a system of indirect funding — providing arms, ammunition, food and clothing to militants before pushing them on to this side of the India-Pakistan divide. It is ensured that before entering the valley the militants carry with them large amounts of cash (both Indian and Pakistani currency).

In fact, militancy has become a flourishing business. The recruits get either a fixed salary or work on a contract basis. According to The Tribune’s information, a local militant’s monthly salary varies between Rs 2,500 and Rs 5,000 depending on various factors. A foreign mercenary gets between Rs 5,000 and Rs 8,000. The financial support given to the family of a deceased militant ranges from Rs 1500 to Rs 3000 a month. A fresh recruit can secure anything between Rs 5,000 and Rs 20,000 as a one-time payment, depending on his capacity to bargain. A guide gets between Rs 30,000 and Rs 50,000, a porter between Rs 7,500 and Rs 20,000 and a motivator Rs 5,000.

There are other kinds of payments made which show how meticulously the whole operation is carried on. A militant gets Rs 150 for throwing a grenade and Rs 6,000 for winter clothing. For killing an officer of the security forces up to the rank of Major the “reward” is Rs 7,000, for a Lieut-Colonel Rs 50,000 and for a Brigadier and above earns a much bigger amount.

The militants of foreign origin cost the ISI a little more. When they enter into a two-year contract they are paid Rs 2 lakh to move to Kashmir. When they go back home after the contract period they get another Rs 5 lakh as a final payment.

Now the figures about the year-wise expenditure (these do not include all payments made for the execution of the Kashmir plan of the ISI). For carrying out the operation from July to September, 1999, the “Supreme Commander” of the Hizb-ul-Mujahideen received Rs 1,06,50,000. During 1998 the payments made to militants totalled Rs 6,94,31,733, and the payees mainly belonged to the Hizb-ul-Mujahideen and the Lashkar-e-Toiyaba.

In 1997, Rs 70,39,473 was distributed and the money went to certain Shia militant outfits in the valley. In 1996, the total amount received for militant activity was Rs 10,50,738. Of this, Rs 5,00,000 reached the People’s Conference and Hurriyat leaders.

In the post-Kargil period militant organisations are getting special treatment to keep their morale high. The ISI funding is now more liberal. According to one source, the monthly aid to the Hizb-ul-Mujahideen is at least Rs 1 crore, to the Harkat-ul-Ansar Rs 40 lakh, to the Al-Barq Rs 12 lakh, to the All-Party Hurriyat Conference Rs 2 crore and other groups (minor ones) about Rs 35,000 each.

There is widespread unemployment and poverty in certain areas of Pakistan, Afghanistan and some Muslim-dominated West Asian countries. This helps in recruiting youngsters for the destructive scheme, specially when the “salary” is so tempting. Religion comes handy in brainwashing the poverty-stricken people to risk their lives for a “cause”. This is sheer exploitation of simple souls.back


The details - not exhaustive - of the ISI's cash transactions
(these do not include the undetected ones, specially hawala deals and donations).

Year Amount paid Major recipients
1996 Rs. 5,00,000 Sent through bank draft for leaders of the People's Conference and the APHC.
  Rs. 5,50,738 Through a draft drawn on a foreign bank in London.
1997 Rs. 70,39,473 Amount sent for Shia military outfits in the valley.
1998 Rs. 3,91,733 Channelling of funds from abroad to militants through a Srinagar-based trust.
January Rs. 75,00,000 Paid by the ISI to militant organisations for continuing their operations.
January Rs. 20,00,000 Received by unidentified outfits to intensify militant activity.
February Rs. 85,00,000 Amount paid by the ISI to the Commander of the Hizb-ul- Mujahideen for distribution among militants.
March Rs. 25,00,000 Amount paid by the Hizb-ul- Mujahideen Supreme Commander to its functionaries in Baramula for militant activity.
May Rs. 60,00,000 Paid by the chief of the Hizb-ul- Mujahideen, Syed Salahuddin, to the organisation's functionaries through a Delhi-based courier for militant activity.
June Rs. 1,00,00,000 Paid to Hizb-ul-Mujahideen functionaries by the ISI for the families of killed militants.
June Rs. 50,00,000 Paid to Hizb-ul-Mujahideen functionaries by the ISI for being distributed among the families of killed militants.
August Rs. 40,00,000 Paid by the ISI to the Lashkar-e- Toiyaba to intensify militant activity.
October Rs. 1,70,00,000 Paid by the ISI to Hizb-ul-Mujahideen leaders as arrears and for the purchase of winter clothing.
November Rs. 15,40,000 Paid by the ISI to the Divisional Commanders of Doda, Banihal, Udhampur and Pir Panjal of the Hizb- ul-Mujahideen for valley-based militants.
December Rs. 50,00,000 Paid by the Hizb-ul-Mujahideen Supreme Commander to valley-based militants.
July Rs. 3,50,000 Paid by Hizb-ul-Mujahideen supremo Syed Salahuddin to the outfit's Deputy Supreme Commander as oper- ation money for August and September.
September Rs. 1,03,00,000 -do-


Payments made to militants and their sympathisers.

Local militant Rs. 2,500-5,000 ($ 58-$ 116) per month
Foreign militant Rs. 5,000-8,000 ($ 116-$ 186) per month
Each deceased militant's family Rs. 1,500-3,000 ($ 35-$ 70) per month
Guide Rs. 30,000-Rs. 50,000 ($ 698-$ 1,163)
Porter Rs. 7,500 ($ 175) for ammunition box
  Rs. 20,000 ($ 465) 12-14 kg/trip
Motivator Rs. 5,000 ($ 116) per rect.
Recruit Rs. 5,000 to Rs. 20,000 ($ 116 to $ 465) as one-time payment

Other payments

Rs. 50,000 to Rs. 2,00,000 ($ 1,163 to $ 4,651) to deceased militants’ families or militancy-affected families.

Rs. 6,000 ($ 140) for winter clothing.

Rs. 150 ($ 3) for grenade throwing.

Amount payable as a reward for killing Army/security forces’ personnel

Rs. 7,000 ($ 163) Upto Major rank or equivalent
Rs. 50,000 ($ 1,163) Lieut-Colonel
Larger amount Brigadier and above

Foreign militants get Rs. 2,00,000 ($ 4,651) while coming in and another Rs. 5,00,000 ($ 11,628) on going back after a two-year contract.


The ISI's fund allocations

Names of organisations Amount paid per month
Hizbul Mujahideen Rs. 1,00,00,000 ($ 232,558)
Harkat-ul-Ansar Rs. 40,00,000 ($ 93,023)
Al-Barq Rs. 12,00,000 ($ 27,907)
All-Party Hurriyat Conference Rs. 20,00,00,000 ($ 4,651,160)
Minor groups Rs. 35,00,000 ($ 81,395)


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