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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 most welcome.

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 power.

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 address.

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.



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