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Sunday, December 30, 2007

[mukto-mona] Soldiers of Good Fortune by Ayesha Siddiqa.

Soldiers of good fortune : How Pakistan's military came to dominate the state
by
Ayesha Siddiqa.
 
The military is the major problem in Pakistan.Businesses and financial ventures in Pakistan, big and small, are run by and for the military. It controls at least 30% of
the economy and much real estate, its dealings are opaque and unaccountable,
and it isn't going to relinquish its privileges any time soon
 
A major newspaper in Pakistan recently claimed, on the basis of a survey, that most big businessmen prefer military to civilian rule. That is not surprising. Big business and the rest of Pakistan's elite have grown comfortable with a powerful military, one of the pillars of power. Pakistan's military considers itself responsible for disciplining rowdy and unpatriotic civilians, and tried to do so again on 2 November 2007, when Pervez Musharraf suspended the constitution and declared martial law, which he calls "emergency plus."
He claimed this was necessary to protect the integrity of the state and save it from religious extremists and terrorists. But it might also have been to protect the extraordinary political and economic power of the armed forces, often referred to as the largest political party. They account for at least 6-7% of gross national product, which makes them among the largest stakeholders in the economy.
Although generals have often suspended civilian governments and imposed martial law, this is the first time a general has done it twice: Musharraf came to power on 12 October 1999, by removing the civilian prime minister, Nawaz Sharif. This time he only had to impose military rule. The government has revised the 1952 act authorising military courts to try civilians: The army will not now have to seek civilian authority to try civilians and such trials will not be open.
Musharraf claims extraordinary power is necessary to help the military fight terrorism and religious extremism. In the past few months suicide bombings and attacks on the military have increased. Musharraf's main problem was with the senior judiciary, whom he accused of cultivating extremists by freeing them from prison. It was claimed that they allowed access to justice to 61 terrorists picked up by the intelligence agencies. The president saw the Supreme Court's decision to summon heads of intelligence agencies and senior police officials as demoralising.
But did Musharraf and his army impose its rule to fight terrorism? Musharraf has not told the truth to anyone: that fighting terrorism is just an excuse to repress the judiciary and civilian freedoms. The militants fighting the security forces in the tribal areas in North and South Waziristan or in Swat were created by the military's intelligence agencies. These violent extremists thrive because of their strategic significance to the army, not because of the judiciary. What Musharraf did not say in his 3 November speech is that the military's tactical approach to militancy has increased the threat of extremism to the armed forces.
The state of emergency is all about enhancing the military's power. After years of subordination the Supreme Court had started to reassert itself and was struggling to become independent of the military. This started after Musharraf sacked the chief justice of the Supreme Court on 8 March 2007. The lawyers' movement, secular and middle class, started in an attempt to rescue the chief justice; civil society began to be a little more free politically.
 
Who can challenge Musharraf?
 
Since the emergency and the resultant crisis, civil society and the political parties are struggling for their independence. Many hope Benazir Bhutto's Pakistan People's Party (PPP) or the army will rescue them from Musharraf. Bhutto, who returned to Pakistan after striking a deal with Musharraf, now seems to be challenging his decisions. Her party has enough support to allow her to start a popular movement. But many people feel uncomfortable that she has been tainted by corruption and fear that she may sell out; it has been claimed that she negotiated with Musharraf to protect her from legal suits.
And it is hard to believe that anyone can challenge Musharraf, other than the military. The general-president has already checkmated Bhutto by putting her under house arrest to stop her from leading a procession against martial law. The regime is using repressive methods to pressure civil society and political parties. On 12 November, police were ordered to arrest 40 Islamabad students marching peacefully in silence.
The army would have a key role in deposing Musharraf. It has removed three unpopular generals including two army chiefs. General Ayub Khan, Pakistan's first military dictator, was removed in 1969 after he elevated himself to field marshal, and left the position of army chief because he became unpopular with the people. In 1971 the army's most senior officers told army chief General Yahya Khan to surrender power to a civilian politician, Zulfiqar Ali Bhutto (father of Benazir). General Zia-ul-Haq died in a mysterious air crash in August 1988. It is hoped that the army will respond to public opinion and find a way to remove Musharraf. But it may just suppress public opinion, due to a fundamental change in its character: It has now become a substantial financial player, and leading generals have huge stakes in the economy. Musharraf has bolstered the ability of the officer cadres to exploit national resources beyond the defence budget.
The current battle in the streets of Pakistan is not just about Musharraf. It is also about strengthening civilian institutions such as the judiciary and building the capacity to challenge the power of the military. But the officer cadre does not want to compromise its power, which it has held since 1958. After a humiliating defeat at the hands of India, which diminished the military's moral authority and ability to rule, army rule was briefly replaced in 1971 by civilian government under Zulfiqar Ali Bhutto. The army chose to back him because he shared its rightwing nationalist agenda even though he talked about Islamic socialism. But his questionable policies brought back the military in July 1977. General Zia-ul-Haq then ruled until his death in 1988.
This civilian interlude under Bhutto did not strengthen democracy because of the military's interventions and the willingness of the civilian leadership, part of the ruling elite, to stay engaged with the army. The political instability that resulted, partly encouraged by the army, led to Musharraf's military takeover in October 1999.
The generals claim they had to intervene to save Pakistan from disaster at the hands of inept politicians. But their first intervention (martial law in 1958) was driven by greed for personal power and later for political and economic power. The powerful military junta has become a primary arbiter of national resources. Its power is critical in distributing resources to the officer cadre, especially senior officers, and civilian cronies.
 
Visible in every place and sector
 
A stroll through towns and cities shows the visibility of the army. Besides the huge monuments of ballistic missiles in the urban centres, there are local markets full of products made by factories controlled by the military; as well as tanks, aircraft and guns, they manufacture cereals, bleach, mineral water, cement, fertiliser and knitwear. There is even a bank. The military operates in agriculture, service and manufacturing industries. Military capital engages in the formal, informal and illegal economies, directly and indirectly. The army attracts a far larger share of national resources than any other state institution.
The military's economic power is an extension of its political power. Its ability to claim more national resources increases its net power against other domestic players. This huge share of resources dates back to just after independence in 1947, which led to the first war with India and resulted in the allocation of 75% of the budget to defence. Since then, the military has acquired an average of 30% of GNP, including pensions.
The military has built up a significant and mostly undocumented presence in the private corporate sector and uses many methods to exploit national resources with the help of retired and serving personnel. Corporate ventures are conducted with the involvement of the armed forces. Although most of the military is professional, these operations are like the Chinese-Indonesian model, in which serving personnel may engage in business ventures. This economy operates at three levels. In Pakistan there are hundreds of small cooperative-type businesses and three main organisations: the Frontier Works Organisation (the largest contractor for highways, dams and other construction), the National Logistics Cell (highway toll collection, largest cargo transporter, major construction projects), and the Special Communication Organisation (telecommunications in the northern areas and Kashmir).
These use their association with the military to get government resources and contracts. Most major road contracts are given to the FWO and NLC because they are reputed to be less corrupt and more efficient than civilian organisations. On the highways there are signs praising the FWO and the army, and urging people to feel grateful towards the company for doing a great job of constructing a good road. Such advertising is meant to hide the corruption and lack of professionalism in these companies, which are beyond accountability. A bridge constructed by the NLC in Karachi collapsed a week after it was inaugurated, killing seven people. The FWO, established in 1966 to construct the Karakoram Highway connecting Pakistan and China, will construct the Laih expressway: The contract, worth 18.8bn rupees, was awarded without open bidding. While the FWO takes 1.8bn rupees per km to construct this road, its main work of maintaining the Karakoram Highway is neglected.
The military also runs hundreds of garages, bakeries, commercial markets, restaurants, and even beauty parlours. These use state assets and are not even documented.
 
The five subsidiaries
 
Then there is a second level, the five subsidiaries of the military: the Fauji Foundation -- a tri-service welfare foundation controlled through the defence ministry; the Army Welfare Trust (AWT) -- controlled by the army; the Shaheen Foundation -- controlled by the air force; the Bahria Foundation -- controlled by the navy; and the Pakistan Ordnance Factories Foundation. These run over 100 major business ventures -- cement, fertiliser, cereal and pharmaceutical production, airlines, banks, finance, insurance, real estate, information technology and education. The production ventures bolster the military's share in heavy manufacturing to one-third of the total.
Most senior officers do not admit the military's association with these companies and claim they are civilian and only employ retired officers. These subsidiaries resemble the Turkish military foundation Oyak, which runs hundreds of businesses through investments from pension funds. However, these ventures are more than just the reintegration of ex-combatants; the military's political influence is being used to build a commercial empire, which is not transparent. Public sector accountability procedures do not apply to these businesses, even though they secretly draw funds from the government. Several audits published by the Department of the Auditor-General indicate the cost of resource misuse by military companies. For example, Askari Aviation, an AWT company that provides helicopters for hire, uses army craft without paying any money to the government.
These foundations are worth about 250bn rupees. The nature of the companies makes them relatively transparent; nine companies related to the foundations are listed on the stock exchange and so, inadvertently, are more visible than other areas of the military economy.
There is another level of the military economy that is very opaque: benefits for individual members of the military. The state provides billions of rupees worth of land and other resources to officers as welfare and post-retirement benefits. Personnel get rural and urban land and post-retirement job opportunities. Top-ranking officers are the greatest beneficiaries. Retired generals have house staff, such as butlers and drivers.
But the more important benefits have to do with land. Most senior officers own six or seven properties in different locations. Musharraf owns some eight properties, all expensive and obtained through his association with the army. More morally astute officers settle for one or two properties.
Then there are hundreds of jobs for officers in government departments, military-controlled companies and the private sector. Since Musharraf took over, some 1,200 senior officers have been employed by the public sector in key management positions. Nine of the 12 electricity supply companies have officers in senior management positions, so they are run by the military. Senior officers are appointed as ambassadors and even vice-chancellors of public universities. These jobs are in addition to opportunities in the companies mentioned earlier.
The private sector is keen to employ military officers who are seen as a way to get contracts using influence and contacts with comrades and government friends. This is an extension of the illegal economy, in which officers receive financial kickbacks. Many senior retired officers become defence contractors. Others use their influence to benefit their personal commercial ventures, a practice that dates back to the 1960s when General Ayub Khan made his son a business tycoon. General Zia-ul-Haq and General Akhtar Abdul Rehman (chief of the ISI during the Afghan operation) both had sons worth millions of dollars. The problem with military capital, which is justified as welfare, is that it tends to become predatory. It is natural for a powerful organisation known for its lack of transparency to use its influence to divert resources for the benefit of individuals.
Perks and privileges are part of the social contract between military personnel and the organisation. They are meant to make the military into a closely-knit community which defends its interests. We should not be surprised to see the military defending its political power and capacity to dominate the state. The military got into economic ventures because of its political power; now that it has so much to lose, it is not keen to transfer power to civilians. This balance has to be corrected.
 
A New Feudalism
 
In the desert town of Bahawalpur, 20 landless peasants told me how the local government was trying to force them off state land that they have occupied for a decade. The land had just been transferred to military personnel who wanted control of it, and the government did not care where the peasants went after eviction. "If they don't have room for us then why don't they push us across the Indian border," a woman complained.
Pakistan has more than 20 million landless peasants but no policy to distribute 93m acres of state lands among them. Instead, the land is given to powerful individuals and groups such as the military, which currently controls about 12% of total state land. Out of the 11.58m acres controlled by the military, approximately 6.9m go to military personnel. Distributing state land is a colonial practice started by the British to create friendly communities and reward the military. Unlike India, Pakistan has continued giving state land to officers and soldiers. The officers get more land than soldiers, as well as extra subsidies such as access to water and farm-to-market roads. These constitute indirect subsidies whose value is not even calculated.
The officers also get urban land, which soldiers don't. The military has converted state land into housing schemes in towns and cities; there are some two dozen housing schemes for officers. This state land includes military parade and exercise grounds and firing ranges. The military also use their influence to acquire private land at subsidised or low rates, and develop it with military resources. This brings huge financial dividends, and profits from real estate have made most generals multi-millionaires.
A conservative estimate is that the total worth of rural land given to military personnel is about 1,400bn rupees; the value of urban land is harder to calculate because of the lack of complete data. But the Defence Housing Scheme built on 720 acres in Rawalpindi, which earned its stakeholders a profit of 24bn rupees, gives some idea. In Lahore, the military authorities paid 11bn rupees for 3,375 acres, which they later sold for 135bn rupees.
Ayesha Siddiqa is a military analyst with a PhD in war studies from King's College, London, and author of Military Inc: Inside Pakistan's Military Economy, Pluto, London, 2007.
 
Victims of ISI
 

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