Tracking ‘Milbus’ The feudal and the general

Contrary to the impression created by the reaction of an obviously unnerved regime in Islamabad, independent military analyst Ayesha Siddiqa's recent book, Military Inc.: Inside Pakistan's military economy, does not contain startling revelations, libellous claims or outrageous assertions. In itself, it is not a sensational book, and does not give the impression of having been written with the intent of grabbing headlines. Rather, it is a painstakingly researched academic project, with a central theme couched in a theoretical framework. Nonetheless, the authorities tried strenuously to stop the volume from reaching the bookshelves – in the process, only succeeding in tripling sales.

Siddiqa's work includes a detailed historical analysis of the role of the military in Pakistan, and presents meticulously referenced data on what are essentially public institutions. Again out of line with the government's reaction, some of this material has already been published elsewhere. Much of the analysis includes arguments that have made regular appearance in the past, when Pakistani writers and journalists have reported on the 'perks and privileges' enjoyed by the country's military personnel. Siddiqa's conclusions are disquieting, but anybody who has had an interest in Pakistan's politics and economic history would have already come across similar hypotheses in the extensive literature on state-society relations in the country.

Military Inc.'s scholastic worth is undeniable. If the work had been published five years ago, it probably would have been launched at a sombre function in a five-star hotel, with guest speakers drawn from the senior echelons of the military and possibly civil bureaucracy and academic circles. It would have been discussed for some weeks in newspaper editorials and academic forums, and perhaps been the target of half-hearted rebuttals by the corporations discussed in its pages. The book would have received the sort of attention that a research work of merit can and should receive.

This book, however, had the misfortune – or, indeed, the fortune – to be published in May 2007, at a time when General Pervez Musharraf was beginning to experience what might be the worst crisis of his regime. The timing has propelled both the book and its author into international headlines, with Islamabad attempting to disrupt the launch ceremony, and allegedly sending intelligence agents to intimidate Siddiqa's family. There were subsequent reports that a chargesheet was being prepared against Siddiqa for the publication of 'malicious' material against the armed forces. In the tradition of other Pakistani intellectuals who have dared to question the status quo, Siddiqa has now left the country, perhaps indefinitely.

The parent-guardian
Aside from the widely publicised figures of the estimated worth of the Pakistan Army's private business empire (around USD 19.7 billion) and the legally acquired assets of top generals (ranging from USD 2.6 million to nearly USD 7 million per individual), what is Military Inc. really about? As detailed in the introduction, the book puts forward three general arguments. All three revolve around the idea of 'Milbus', a term Siddiqa coins to refer to 'military businesses' or capital that is "used for the personal benefit of the military fraternity". As such, her first argument is that Milbus rests on the transfer of resources from the public to the (military-affiliated) private sector. Second, that the growth of Milbus encourages the top echelons of the armed forces to support "policymaking environments" that will "multiply their economic opportunities". And third, that such actions are "both the cause and effect of a feudal, authoritarian, non-democratic political system". This last assertion is particularly interesting, as it implies that the interests of the military and the feudal landlords converge, thereby belying the image of the Pakistan Army as a modern, technology-savvy institution with an interest in supporting technocrats in government.

Siddiqa begins her thesis with an analysis of various forms of civil-military relations. She refers to the pre-1977 role of the Pakistan Army as an "arbitrator military", which acquires political power in certain circumstances (particularly during periods when civilian governments are perceived to be particularly corrupt), but does not seek to prolong or institutionalise its role. Instead, it relies primarily on the civilian bureaucracy to run state affairs, even when the army is in power.

On the other hand, the current dispensation in Pakistan (comparable to the situations in Turkey and Indonesia) is classified as a "parent-guardian" military type. In this form, the military seeks to institutionalise its role in politics through constitutional amendments, with the active help of certain civilian partners. Siddiqa argues that such a transformation in the role of the armed forces is necessitated by their need to "secure their dominant position as part of the ruling elite", and points to the 2004 formation of the National Security Council in Pakistan as an indicator of the institutionalisation of military rule. It is important to understand, though, that this process could not have taken place without some measure of support from powerful elements within the civil bureaucracy, as well as from some political leaders.

How did the military manage to effect this transformation in a country such as Pakistan, which enjoys a powerful civil bureaucracy and political parties that have solid grassroots support? Pakistan's vulnerability to external threats from the time of its creation has, of course, been a key contributing factor to the military's prominence among the organs of the state. In addition, Siddiqa contends that civilians do not understand the linkages between the military's growing financial and political power. Civilian governments tend to allow the military to accumulate assets and build financial empires free of oversight, she notes, in exchange for the military's support during periods of civilian rule.

Such a contention implies that political leaders and the civil bureaucracy have consistently underestimated the military's need to consolidate its power, and that they did not revise their expectations, even as the military continued to infiltrate civilian government structures. Immediately thereafter, however, the author discusses the evolving role and growing power of the Pakistan Army from 1947 onwards. While acknowledging Hamza Alavi's classification of Pakistan as an "overdeveloped" state, she notes that "the civil bureaucracy and the political elite have always viewed the armed forces as an essential tool for furthering their political objectives." Siddiqa thus does not appear to subscribe to the view that politicians are altogether naïve; instead, she points to a symbiotic relationship between feudal political leaders and the army.

Ban backfire

The key sections of Military, Inc. relate to the military's financial empire. Here, Siddiqa covers the four, relatively more transparent, subsidiaries – the Fauji, Shaheen and Bahria foundations, and the Army Welfare Trust. But she also pays generous heed to the commercial ventures, such as the National Logistics Corporation (officially a part of the Ministry of Planning and Development, but the ground operations of which are run by the army), the Frontier Works Organisation (initially under the control of the Ministry of Communications, and now under the Ministry of Defence), and the housing projects administered by all three branches of the military. In a more daring move, Siddiqa also attempts to quantify the economic benefits utilised by armed-forces personnel. These fall into two categories: the visible, in the form of land grants, a rough calculation of which places the value of military land at about USD 11.6 billion; and the invisible, or the business opportunities availed by military personnel using the influence of their parent organisations, with the government, for instance, providing natural-gas subsidies worth USD 18.97 million to Fauji Fertilizer alone in 2006.

Perhaps the most revealing section of Military, Inc. deals with the cost of Milbus, which directly challenges the view that financial institutions managed by the armed forces are efficient and competitive. Siddiqa documents, for example, the financial travails of the Army Welfare Trust, which in 2001 was forced to ask the government for a bailout of USD 93.1 million – not the first time the Trust had run into difficulties. Siddiqa's analysis of the other three foundations is less detailed due to a paucity of data; but she is able to note annual losses of USD 17.2 million in the three sugar mills run by the Fauji Foundation, as well as negative operating profit margins of 10-15 percent in the Fauji Jordan Fertilizer Company at the beginning of this decade.

Siddiqa should be gratified by the official reaction to her treatise, which has tellingly exposed the insecurity of the establishment with regards to these issues. The official statement from the Ministry of Defence, which was supposed to be a refutation of her "allegations", simply reiterated the importance of the armed forces as a pillar of the Pakistani state, as well as the military's right to provide for the welfare of its employees – neither of which contentions had been challenged by the author.

More than three weeks after Military, Inc. was launched in Pakistan, and more than a month after its initial publication in London, no public institution had challenged the information or analysis presented. Instead, a considerable amount of energy was expended in vilifying the credentials of the author, including the time-honoured method of invoking her meetings with Indian researchers at international conferences. The bungled attempt to ban the book launch, and even the book itself (the government denies banning sales, but the book was not available in most key bookstores on the day of its launch) has in fact succeeded in trebling its sales, with the publisher already into a third edition. Overseas sales are likewise recording significant highs, and the book is receiving exceptional coverage in the international press. A government that insists on taking credit for launching the information age in Pakistan with the liberalisation of the country's media really should have known better.