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Fighting for the bottom line

By Jane Rankin-Reid - posted Wednesday, 23 January 2008

Ayesha Siddiqa became a wanted woman in Pakistan almost as soon as this provocative book was published in April. In May, amid street protests against the sacking of Pakistani chief justice Iftikhar Chaudhry, the official launch of Military Inc, at an elite Government-controlled club in Islamabad, was cancelled at short notice. Several weeks later, Siddiqa received legal demands for 1 billion rupees in damages from a retired military commander and was warned that her life was in danger.

The Government-run Associated Press of Pakistan described Siddiqa's book as "a plethora of misleading and concocted stories" that cast aspersions on "one of the country's most prestigious and honourable organisations". Although Pakistan's besieged President Pervez Musharraf is yet to address directly Siddiqa's revelations about the military's lack of financial accountability, he branded the London-educated defence analyst a traitor during a television interview in October. Siddiqa was out of the country and has yet to return.

On November 5, within days of the declaration of emergency rule, Pakistani parliamentarian Sheikh Waqas Akram, defending Musharraf on Government-controlled television station PTV, cited Military Inc as an example of the present threat to Pakistan's security. In a reply posted on a popular Pakistani website, Siddiqa said she "had nothing but the interest of the armed forces of Pakistan at heart ... I have presented objective facts and figures to conclude that the involvement of military in private business is undermining the capacity, efficiency, professionalism and image of this prestigious institution."


In subsequent interviews with me, Siddiqa remained adamant that a military that benefits to the tune of 200 billion rupees ($3.7 billion) a year from private enterprises is dangerously political by nature. In Pakistan, military-owned businesses produce everything from knitwear to cereals to cement, run the trucking and construction sectors and control strategic land allocations in urban and regional districts. A good example from Siddiqa's book is the Fauji Foundation, which describes itself as "a uniquely combined welfare-cum-industrial group, operating sugar, cement, fertiliser, power, oil, gas, corn, financial services businesses benefiting nearly 10 million ex-servicemen."

Siddiqa has a doctorate in war studies from King's College, London. Her specialty is threat perception, and after working in the civil service for 11 years she became the first civilian and the first woman to be appointed director of naval research for the Pakistani navy, a post she held from June 1998 to September 1999. In recent years, working as an independent analyst and commentator, her expertise in arms procurement and production, military technology, strategic defence and nuclear deterrence has expanded to include a focus on civil-military relations in South Asia.

Pakistan's official defence spending consumes 3 to 4 per cent of its gross domestic product. Neighbour and nuclear rival India spends 2.5 per cent. But Pakistan's figures are inaccurate, according to Siddiqa, who estimates military-controlled business generates up to $US50 billion ($56.4 billion) annually. "Factor in the army's extensive business operations and the annual spending is much higher," she told me. "How does the military meet its annual salaries otherwise?"

In Military Inc, Siddiqa returns repeatedly to the idea that the sheer scale and scope of the military's business activities distorts all assessments of Pakistan's economy. She uses the term MILBUS (military business) as shorthand for what can happen to developing societies when the military has a pervasive influence on the economy. "Their purpose is not straightforward capital accrual ... if their businesses were based purely on wealth accumulation they would be far more efficient," she told me. "Their main purpose is to monopolise assets as an extension of political power, giving themselves a financial economy, a sense of confidence, in which the army can become a state within a state."

She cited National Logistic Cell as an example of MILBUS. One of the largest trucking companies in South Asia, with a fleet of 1,689 vehicles, it is also builds roads, bridges and grain-storage facilities. Technically a department of the Ministry of Planning and Development, NLC is in fact run by the army and staffed by serving army officials, according to Pakistani analysts. Profitable subcontracts prioritised to military-owned businesses are commonplace.

"It's always problematic to calculate accurate annual military spending, because most of its economy is invisible underground," Siddiqa said. From rural land distribution to strategic re-employment for retired military personnel, the Pakistani military's economic activities provide critical political support for Musharraf. Controlling 12 per cent, or close to 4.86 million hectares, of the nation's land, the military owns more than any other Pakistani institution, at least half of it under the control of individual members of the armed forces, mainly officers.


In Military Inc, Siddiqa combines narrative outrage with academic rigour and meticulous research. It's no surprise that her penetrating inquiry into the Pakistani military's business interests has disturbed the ruling elite in Islamabad. Her writing rewards close reading in these troubled times for Pakistan.

Central to Siddiqa's densely argued treatise on the social and economic consequences of Pakistan's militarisation is her response to Samuel Huntington's famous 1996 tract The Clash of Civilisations and the Remaking of World Order, a darkly argued prophecy of an inevitable showdown between the West and Islam. In Military Inc Siddiqa challenges Huntington's assertion that in many parts of the developing world "the military are generally better placed to undertake nation building than the ill-groomed politicians". Siddiqa begs to differ and the turmoil in Pakistan would seem to add strength to her case.

In comparison with other developing countries, democracy building in Pakistan takes second place if the US's response to Musharraf's emergency rule is any yardstick. Shortly after Musharraf's announcement, George W. Bush asked him to resign his military commission and confirm an election date. While the general has paid lip-service to the US's demands it's a fair bet he is working hard to convince Bush that without him, the war on terror is unwinnable.

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First published in The Australian's Literary Review on December 5, 2007. Military Inc: Inside Pakistan's Military Economy By Ayesha Siddiqa, Pluto Press, 304pp, $50.

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About the Author

Jane Rankin-Reid is a former Mercury Sunday Tasmanian columnist, now a Principal Correspondent at Tehelka, India. Her most recent public appearance was with the Hobart Shouting Choir roaring the Australian national anthem at the Hobart Comedy Festival's gala evening at the Theatre Royal.

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