M A I N   N E W S

Pak army is nation’s largest business conglomerate
Rahul Bedi

New Delhi, October 12
The US may be talking of the gradual democratisation of Pakistan, but the country’s army may be in no mood to relinquish power given its proliferating commercial interests. Other than ruling Pakistan directly and indirectly since independence and controlling its nuclear, defence and foreign policies, the military remains the country’s largest and most profitable business conglomerate.

“We now have a corporate military more into things commercial, especially real estate, than anything as dull and prosaic as mere soldiering and fighting,” Pakistani columnist Ayaz Amir caustically declared in the newspaper Dawn recently.

It is often said of Pakistan that whilst all countries have armies, Pakistan’s military has a country.

Nearly 1,200 serving and retired military officers - mostly from the army - run a web of banks, transport, road building, communication and construction businesses worth billions of dollars.

The “Fauji” or soldier foundations also operate a private airline, hundreds of educational institutions, power plants, steel and cement factories, and even produce consumer goods like sugar, electronic items and breakfast cereals.

Security sources said personnel drawn from these foundations worked with the Inter-Services Intelligence (ISI) directorate and the extremist Islamist organisations to train, arm and motivate mujahideen cadres to fight the Soviet occupation of Afghanistan through the 1980s.

A few years later, they raised and installed the Taliban in Kabul, providing the Islamic militia financial and logistic support till it was removed by the US in 2001.

According to analyst Satish Kumar, who edits India’s National Security Annual Review, the Pakistan Army is not only the largest real estate owner but also the country’s “biggest” commercial player.

“It is not just a defence force but a ruling class oligarchy with substantial economic interests to safeguard,” Kumar says. It is unlikely that the military will relinquish this role in the foreseeable future, he added.

Military juntas have appropriated large tracts of hugely expensive urban land at throwaway prices to establish grandiose housing colonies.

During Pakistan’s erratic experiments with democracy, the army headquartered at Rawalpindi, the garrison town adjoining the capital Islamabad, has exercised thinly veiled control over the civilian administrations, significantly strengthening its financial empire.

Pakistanis joke that if every serving and retired military officer protects his own property, then their country would be one of the best defended in the region.

The business interests broadly fall into three categories - the ones controlled directly by the chief of the army staff, the formalised military ordnance factories, and the state-owned armament factories managed by the defence ministry.

In addition, there are four charitable trusts that operate autonomously like private corporations in which serving and former servicemen run factories and manufacturing units producing a range of goods and services.

The first group includes the National Highway Authority (NHA) and the Frontier Works Organisation (FWO), each headed by a two-star officer, the Special Communications Organisation amply supported by the Signal Corps and the National Logistics Cell that operates a significant, if seldom discussed, country-wide trucking operation.

Aided by the Army Engineering Corps, the army’s road building conglomerate constructed the precipitous Karakoram Highway in the 1980s connecting Pakistan to military and nuclear ally China, besides laying roads across the country.

And while the Special Communications Organisation working with the Signals Corps wires up the country, especially Pakistan-occupied Kashmir to the mainland, the Logistics Cell is possibly the army’s most profitable operation.

Established by Pakistan’s former dictator, Gen Mohammad Zia-ul Haq in the late 1970s, the cell’s trailer trucks would pick up armaments and ordnance, including assault rifles and Stinger missiles, the Soviet Union’s eventual bete noire in Afghanistan, from the southern port city of Karachi from ships chartered by America’s Central Intelligence Agency (CIA) that backed Kabul’s “unholy war” against Moscow.

These convoys then ferried their lethal cargo to the North West Frontier Province and neighbouring Baluchistan bordering Afghanistan to mujahideen groups fighting the Soviet Army.

After 1996, this massive fleet of trucks, controlled mostly by Pashtun tribesmen, was effectively used by the ISI to supply the Taliban with weapons, fuel and food. The trucks and their plucky drivers played a major role in establishing Taliban control, an account that has been only sparsely documented.

Intelligence sources said these trailers also transported heroin from numerous laboratories in several of the tribal agencies along the Pakistan-Afghan border to Karachi, from where the drug made its way to the West.

Pakistani sources said the heroin-loaded convoys were provided unprecedented security and were rarely, if at all, checked en route.

But the “Fauji (Soldier) Foundation”, the largest industrial conglomerate with an annual turnover of $500 million and profits of over $41 million, is the “jewel” in the army’s crown.

Headed by a three-star officer, it provides “womb to tomb” facilities for nearly nine million retired servicemen that include re-settlement and re-employment schemes in military-run cement, power and sugar factories.

It also grants retired soldiers land in villages along the Line of Control (LoC) that divides Jammu and Kashmir between India and Pakistan, providing the disturbed region with a trained reservoir of manpower in the event of hostilities.

Having retired soldiers in the border regions also makes it easier for the Pakistani Army to infiltrate armed militants across the LoC into Jammu and Kashmir on the Indian side to fuel the ongoing insurgency, an accusation Islamabad denies.

The Army Welfare Trust, managed by General Headquarters (GHQ), employs around 6,000 former soldiers and runs the Askari Commercial Bank, one of Pakistan’s most profitable.

Like his predecessors, Chief of Army Staff General Pervez Musharraf, who also doubles as President, heads the bank’s governing board that comprises senior officers. The trust runs around 25 other projects worth around Rs.17 billion ($354 million).

Former Pakistan Air Force officers run the 26-year old Shaheen Foundation with an annual turnover of Rs 600 million that operates Shaheen Airways, the country’s profitable and only private airline.

Naval officers are in charge of the Bahria Foundation that manages around 20, mostly civilian, projects also at great profit. — IANS



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