Pakistan’s biggest business Conglomerate-Pakistan Army

With 620,000 soldiers, Pakistan boasts the world’s seventh-largest standing army, but its senior officers long ago realised the perks to be gained from commercial ventures. Since independence in 1947, the army has steadily intertwined itself into Pakistan’s economy: so much so that it’s hard to tell where the military stops and any semblance of free-market capitalism begins. All too often, there is no dividing line. The army owns 12 per cent of the country’s land, its holdings being mostly fertile soil in the eastern Punjab. Two thirds of that land are in the hands of senior current and former officials, mostly brigadiers, major-generals and generals. The most senior 100 military officials are estimated to be worth, at the very least, £3.5 billion.

Many of the country’s largest corporations are also controlled by the military, thanks largely to an opaque network of powerful ‘foundations’ originally set up to look after the pension needs of army personnel. The largest three — the Fauji, Shaheen and Bahria foundations, controlled by the army, air force and navy respectively — control more than 100 separate commercial entities involved in everything from cement to cereal production.

There are nearly fifty “projects, units and housing colonies” functioning in the country under the administrative control of Fauji Foundation, Shaheen Foun­dation, Bahria Foundation, Army Welfare Trust (AWT) and Defence Housing Authorities (DHAs).

The projects/units being run by the AWT are:
  • Two stud farms in Pakpattan and Okara
  • Army Welfare Sugar Mills, Badin
  • Askari Project (shoe and woollen), Lahore
  • Army Welfare Mess and Blue Lagoon Restaurant, Rawalpindi
  • Real estate comprising three small housing schemes in Lahore, Badaber and Sangjani
  • Askari General Insurance Co Ltd Rawalpindi
  • Askari Aviation Services, Rawalpindi
  • MAL Pakistan Ltd Karachi
  • Askari Guards (Pvt) Ltd, head office (HO) in Rawalpindi
  • Askari Fuels (CNG) with HO in Rawalpindi
  • Askari Seeds, Okara
  • Askari Enterprises, Rawalpindi
  • Fauji Security Services (acquired from Fauji Foundation), HO in Rawalpindi
  • Askari Apparel, Lahore Askari Lagoon, Faisalabad.

The projects/units under Fauji Foundation are:

  • Fauji Cereals
  • Foundation Gas
  • Fauji Fertiliser Company Ltd
  • Fauji Cement Co Ltd
  • Fauji Oil Terminal and Distillery Co Ltd
  • Fauji Kabirwala Power Company Ltd
  • Foundation Power Co (Dharki) Ltd
  • Askari Cement Ltd
  • Askari Bank LtdFertilizer Bin Qasim
  • Foundation Wind Energy (I and II) Ltd
  • Noon Pakistan Ltd Lahore
  • Fauji Meat Ltd
  • Fauji Fertiliser Bin Qasim Ltd
  • Fauji Akbar Partia Marine Terminal Ltd, HO in Karachi

The projects, units and housing colonies under the administrative control of Shaheen Foun­dation, which is a trust of the Pakistan Air Force, are:

  • Shaheen Airport Services
  • Shaheen Aerotraders
  • Shaheen Knitwear
  • Shaheen Complex, Karachi
  • Shaheen Complex, Lahore
  • Shaheen Medical Services
  • Hawk Advertising
  • Fazaia Welfare Education School System
  • SAPS Aviation College
  • Air Eagle Aviation Academy
  • Shaheen Welfare Housing Scheme, Peshawar

The Fauji foundation, the largest of the lot, is estimated to be worth several billion pounds. It operates a security force (allowing serving army personnel to double in their spare time as private security agents), an oil terminal and a phosphate joint venture with the Moroccan government. Elsewhere, the Army Welfare Trust — a foundation set up in 1971 to identify potentially profitable ventures for the military — runs one of the country’s largest lenders, Askari Commercial Bank, along with an airline, a travel agency and even a stud farm. Then there is the National Logistic Cell, Pakistan’s largest shipper and freight transporter (and the country’s largest corporation), which builds roads, constructs bridges and stores vast quantities of the country’s wheat reserves.

In short, the military’s presence is all-pervasive. Bread is supplied by military-owned bakeries, fronted by civilians. Army-controlled banks take deposits and disburse loans. Up to one third of all heavy manufacturing and 7 per cent of private assets are reckoned to be in army hands. As for prime real estate, a major-general can expect to receive on retirement a present of 240 acres of prime farmland.

Financial autonomy has also engendered in the military a dangerous sense of entitlement. The “Culture of Entitlement” in the Pakistan military started during General Ayub’s time when he commenced the tradition of awarding land to army officers (the size of allotment depending upon the rank of the officer) in the border regions of Punjab and in the newly irrigated colonies of Sindh.

General Zia also created a novel way of involving serving officers in commercial ventures by placing military lands and cantonments and the provisioning of logistics to the regional corps commanders. Thus, many senior army officers availed opportunities to acquire multiple plots in various cantonments for themselves at highly subsidized rates. These prime properties soon sparked nepotism in allotment and corruption among both the military and civil bureaucracies.

Fauji Foundation, Shaheen Foundation, Bahria Foundation are examples of so-called self-sustaining welfare projects which are most certainly golden egg laying geese for Pakistan Army. For years, these money minting projects have loaded the uninformed and corroded the taxpayers. A normal scenario in Pakistan.

Viewpoint

Land is being requisitioned left, right and centre across the country. In the financial centre of Karachi, the army has built eight petrol stations on land appropriated from the state. Absolute power, of course, corrupts absolutely. It also erodes the sense of vulnerability — that the wielder of the power can get away with anything. The military has also begun to act in the manner of a feudal landlord. This certainly seems to be the case in Pakistan. It’s hard to imagine anyone managing to circumscribe the economic power of Pakistan’s army. The military’s financial security reinforces its desire to retain control of the state. If full democracy were permitted in Pakistan, it would constitute a threat to the army’s throttling power. And since political power in turn creates greater economic opportunities, it’s in the interest of the military fraternity to perpetuate it. More political power leads to greater profit, and vice versa. It is only matter of time that the impoverished and subjugated populace who have been tortured at the hands of the mighty Army can tolerate all the abuse before it rises up in protest.

05 Jul 20/Sunday                  Written By: Saima Ibrahim