Pakistan Military commercial projects generate $26.5 billion in annual revenue. You name a business and Pakistan Army will be deep into it.
Pakistan has been a pseudo democracy for 75 years of its existence, wherein Pakistan Military has directly ruled the country for over 50 years, while the remaining period it has ben closely monitored the ‘installed Government of the day’. More so, none of the elected prime ministers of Pakistan could ever complete his/her tenure. Assassinated, hanged, hounded, prisoned, exiled are few options that PMs of Pakistan have been bestowed upon, in case they do not toe the Pakistan Military’s diktat. None, barring Imran Khan has ever pointed fingers at Pakistan Military’s work culture or its commercial activities.
Pakistan Military has innumerable ventures through its ‘holding companies’ or ‘groups’ covering very diverse fields ranging from oil refining, banking, aviation, power generation, natural gas, wind energy, property development, insurance, cement, fertiliser, sugar, cereals, clothing, advertising, restaurants, hospitals, etc. The Army Welfare Trust (AWT), Fauji Foundation (FF), Shaheen Foundation (SF), Defence Housing Authorities (DHAs) are to name a few commercial ventures of Pakistan Military establishment. These companies are the dominant business group in the country, estimated to be worth over US$40bn (billion). Figures suggest that these ventures have had a constant growth rate of over 20-30% annually, while the rest of the businesses of Pakistan are suffering losses. This is the highest growth of any business venture ever in Pakistan owing to its Military’s ironclad influence, ensuring smooth ride over market aberrations or excessive competition and unfavourable government policies.
Almost all these commercial ventures are listed under the Charitable Endowment Act 1890 and escape paying taxes, which other business conglomerates are made to pay. The biggest beneficiaries are the Generals and their equivalents in all three arms of Pakistan Military Establishment. Over 50% of the Retired Corps Commanders and above officials are directly absorbed in these charitable organizations, while remaining get absorbed in foreign service, plum positions in various government projects, public sector undertakings, advisors to governments and so on. The functioning and profit from these commercial ventures are tightly controlled by Pakistan Army’s General headquarters in Rawalpindi, even though these organizations are supposed to be independent and managed by a board of directors. The housing societies spread across Pakistan allot prime property to military personnel at highly subsidised rates. Even military awards are linked with the grant of farm lands and housing plots.
The Pakistani government depends on the International Monetary Fund (IMF) for the timely release of portions of the $6.5 billion bailout package secured for the country in 2019. This year, Pakistan has requested $1.1 billion from the IMF, however, if the military was to cut costs by just 10 per cent, Pakistan would have had $1.2 billion to spend. Pakistan Army is perhaps the only military establishment in the world to own a business empire within the nation.
Monopoly and Competition: Military businesses, backed by their resources and influence, can dominate the market, leading to reduced competition. This restricts opportunities for private entrepreneurs and stifles innovation and growth in various sectors of the economy.
Diversion of Resources: The allocation of significant resources to military-run businesses diverts funds away from essential public services, such as healthcare, education, and infrastructure development. This can hinder the overall progress and well-being of the Pakistani population.
Inequality and Deprivation: The concentration of wealth and power in military businesses can exacerbate existing social and economic inequalities, leaving ordinary citizens with limited access to resources, opportunities, and economic benefits. This deprivation can further marginalize vulnerable communities and perpetuate a cycle of poverty.
Impact on Private Sector:
Unfair Competition: Private businesses often find it difficult to compete with military-run enterprises, as the latter have access to preferential treatment and resources. This unfair competition hampers the growth and survival of private enterprises, limiting job opportunities and stifling entrepreneurship.
Investor Confidence: The dominance of military businesses in certain sectors can deter both domestic and foreign investors. This lack of confidence in the business environment negatively impacts economic growth, job creation, and foreign direct investment.
Lack of Accountability: Military businesses often operate with less transparency and accountability compared to private enterprises. This can undermine good governance and create an environment that is prone to corruption and favoritism.
The impact of military-run businesses in Pakistan raises concerns about the deprivation faced by the population. To foster a more equitable and prosperous society, it is crucial to address the issues surrounding these businesses. By promoting transparency, accountability, and fair competition, Pakistan can create an environment that supports the growth of the private sector, encourages entrepreneurship, and ultimately benefits the entire population.
Author is a Geopolitical Analyst and IT Entrepreneur based out of Jammu.
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