June '07: The Pakistan Military Economy
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The Pakistan Military Economy
What is the scale of the corporate interests of the
Pakistan Military? Is the Pakistan military the only
one in the world that indulges in what author Dr.
Ayesha Siddiqa calls ``Milbus?” What are the
implications of the military economy for Pakistan as
a whole including its political and social costs?
The June 2007 individu-spotlight attempts to focus
on these very questions which have been articulated
by defense analyst Dr. Ayesha Siddiqa.
Individualland is grateful for this contribution of
hers. As always, feedback from our readers will be
Should a military be engaged in the economy as a
primary or a secondary actor is a question worth
debating for states all over the world. This is an
issue which I tried to address through my book,
Military Inc: Inside Pakistan’s Military Economy.
Leaving aside the interesting accusations of those
whose power and influence is threatened by my
argument; I would like the readers to understand
that the book does not target the Pakistani armed
forces. My study, in fact, focuses on a much larger
problem of what happens when any military is allowed
to establish an independent financial empire or to
acquire independent sources of income which are more
hidden than the defense budget which is primarily
for operational purposes.
Milbus or military business is the internal economy
of the armed forces which is established primarily
to bring personal advantages to military personnel,
especially the senior echelons of the officer cadre.
Such a military capital is not just found in
Pakistan but in other countries as well ranging from
the US, France, UK, Israel and others to China,
Thailand, Pakistan, Myanmar, Ethiopia, Sudan and
others. The difference, however, relates to the
extent of domestic penetration and the military’s
status in the country’s power politics.
In this respect, I have discussed six models of
Milbus. The first model pertains to countries such
as the US, Israel, India, France, UK, South Africa,
Brazil and others. These are primarily politically
developed states which have embarked on a
civil-military partnership. In this framework, the
military exploit resources but in partnership with
other civilian actors. What is more important to
understand is that the civilian stakeholders are the
principal players which use the military as a tool
of exploitation inside and outside the country. Lets
look at the example of the US where billions of
dollars were given to private contractors such as
Helliburton, Dynacorps, MPRI and certain others.
These firms mainly consist of retired military
personnel most of whom take early retirement to seek
more lucrative jobs in the private sector. The
government is comfortable in using these companies
in conflict zones because it saves Washington from
political embarrassment both at home and abroad.
However, these contracts are dependent upon contacts
in the government and the military at senior levels.
Indeed, a number of American authors have exposed
this scandalous relationship.
The second model pertains to the partnership between
authoritarian political systems such as China, Iran,
Cuba and a few others. Here again, the military is
primarily a tool used by the ruling parties. The
Passdaran in Iran, which is a pera-military force,
is one of the key players in oil and gas. However,
the passdaran engage in economic predation on behalf
of key stakeholders in the ruling party and are
meant to bring financial dividends for the bunyads
or the charities that are controlled by important
political personalities from the ruling party. The
key advantage in the these models is that the
military can always be pushed back from its economic
role, as had happened in the Chinese case. Beijing
ordered its military in 1998 to disinvest entirely
from the service industry in order to have greater
professionalism in the armed forces.
The third model is what could be found in a number
of Latin American countries during the 1970s and the
1980s and can now be found mainly in Myanmar. In
such cases the military controls every political and
economic activity and the civilians are junior
partners. The military has complete dominance over
all national resources and divides the spoils mainly
amongst its own people. Then there is the fourth
type which is the arbitrator military which comes
into power temporarily to correct the course of
politics and returns to the barracks due to concerns
for its professionalism. Such militaries which can
be found in countries like Bangladesh distribute
resources in partnership with civilian stakeholders.
Although such militaries play a crucial role in
distribution of resources, they do have an equal
relationship with the civilian players.
Then there is the fifth model which pertains to
post-1960s Indonesia, post-1980s Turkey and post
1977 Pakistan. These are parent-guardian militaries
which while withdrawing from the center-stage of
politics ensure their control through legal and
constitutional mechanism for the fear of leaving the
state to civilians and also because they have
developed huge financial stakes which must be
protected at all costs. Such militaries are primary
predators and, in fact, are a source of kleptocratic
distribution to its own members and cronies.
Finally, there is the war lord type which can be
find in numerous failed states in Africa or in
states such as Afghanistan. What is peculiar about
such cases is that the state weakens to a degree
when it is difficult for any central authority to
discipline its armed forces or other institutions.
The state can certainly not stop the individual
commanders and soldiers from looting and plundering.
What are the consequences of Milbus? Irrespective of
which model we are talking about, there is negative
impact on decision-making and politics in generals.
For instance, allowing the military to establish
economic stakes in cases like the US would have an
impact on decision-making. The civilian and military
stakeholders of this internal economy would support
policies which bring them greater financial
dividends. In case such as Pakistan, on the other
hand, the military would not withdraw from politics
or governance because it has huge stakes to stay in
The other negative consequence is that the more a
military expands its role, the more it dilutes its
core role of war fighting and of providing security.
A military’s financial involvement does not bode
well for its professionalism, especially when it
comes to greater visibility of the military in
running of the state and in the society. One of the
other interesting examples to gauge the negative
consequences of Milbus pertain to Bangladesh where
the armed forces were bound in a partnership with
the civilians and encouraged to expand their role in
the economy and indirectly in politics. What has
recently happened in Bangladesh, hence, shouldn’t
come as a surprise. The political crisis there is
not just about inapt politicians but also about the
increasing greed for power of the armed forces.
Milbus or the hidden military capital cannot be
taken lightly primarily because it enhances a
military’s political power. The armed forces,
especially in authoritarian political systems, seek
financial independence or autonomy not just for
capital accumulation but to enhance their political
power and their independence from civilians and
civilian institutions. Soldiers are meant for war
fighting and not to engage in money making ventures
or running of the state. The military, it must not
be forgotten, is a special institution because its
is formally trained in violence which make sit
tricky to have a dialogue with it on an equal
footing, particularly if the institution has become
too confident of its ability to survive
independently and its power.
The Pakistani establishment can raise as much uproar
on this issue as it wants. However, the
extraordinary powers of the armed forces and the
manner in which this impinges upon the future of
democracy is an issue which it would have to
Dr. Ayesha Siddiqa is a defense and security analyst
and author of ``Military Inc: Inside Pakistan’s
Military Economy.” She wrote this piece exclusively
for Individualland. Feedback to this article will be
most welcome at www.individualland.com/blog or you
can also e-mail us.