We have quite often come across terms such as ‘mercantile capital’, ‘industrial capital’ and ‘finance capital’, but we have seldom heard of ‘military capital’. Our knowledge and understanding of it has been very limited. There are two main reasons for this. First, military has played domineering roles in several countries of the world at different points of time, but military capital there has not been visible to the public at large and with the restoration of civilian rule, its influence has gone down substantially. Whether it was Chile or Nigeria, military rule remained engaged in plundering the country and encouraging the dominance of the indigenous as well as the foreign finance capital. In Indonesia, of course, military capital prospered for quite a long time but its primacy ended as soon as the Suharto regime collapsed. Pakistan is the only country where military capital has been going from strength to strength since the 1950s.and has been establishing its dominance over each and every sector of the economy.

Second, though a number of researchers have pointed out the significance of military capital, it is Dr. Ayesha Siddiqa who has painstakingly presented a systematic and scientific analysis and explanation of the phenomenon of military capital in her book “Military Inc.: Inside Pakistan’s Military Economy” (Pluto Press, London, 2007).

Dr. Siddiqa is not only highly educated but also intimately familiar with military affairs as she headed for eleven years the research department of Pakistani navy. Her first book dealing with military preparations and procurement of weapons by Pakistan appeared in 2001 and it was acclaimed as quite authentic and informative. Her latest book has been published simultaneously in America and Britain. The Pakistan government was so annoyed that its scheduled release in Islamabad on May 31, 2007 was not allowed to take place.

It is needless to add that, without reading this book, it is difficult to understand turn of events beginning on November 3 and one can have only a superficial analysis. It is, perhaps, for the first time in the history of the world that a military dictator has staged a coup d’etat against his own regime.

Two years ago, Stephen Philip Cohen in his book “The Idea of Pakistan” underlined that most countries of the world have armies, but the army has only one country of its own, i.e., Pakistan. He asserted: “Regardless of what may be desirable, the army will continue to set the limits on what is possible in Pakistan.” Why is this so? This is convincingly explained in Siddiqa’s book. The solution of the mystery of army’s domination over every sector in Pakistan lies in the phenomenon military capital. 

Unlike India, Pakistan’s army has other sources than the defence budget allocations for meeting its needs. In fact, it has its own capital, with which it carries on its industrial, business, social, political, and welfare activities. Siddiqa has termed Pakistan’s military capital as Milbus, which “refers to military capital that is used for the personal benefit of the military fraternity, especially the officer cadre, but it is neither recorded nor part of the defence budget. In this respect, it is a completely independent genre of capital. Its most significant component is entrepreneurial activities that do not fall under the scope of the normal accountability procedures of the state, and are mainly for the gratification of military personnel and their cronies. It is either controlled by the military, or under its implicit or explicit patronage. … The top echelons of the armed forces who are the main beneficiaries of Milbus justify the economic dividends as welfare provided to the military for their services rendered to the state.”

Siddiqa goes on to add: “This military capital also becomes the major driver for the armed forces’ stakes in political control. The direct or indirect involvement of the armed forces in making a profit, which is also made available to military personnel and their cronies, increases the military’s institutional interest in controlling the policy-making process and distribution of resources.”  Further, “This phenomenon intensifies the interest of the military in remaining in power or in direct/indirect control of governance. This does not nurture the growth of democracy or rule of law, and makes this kind of Milbus the most precarious.”

Pakistani military has been busy building a gigantic business empire of its own, which may be, broadly, divided into two categories. The first category consists of those activities that are directly related to country’s defence. It includes the production of weapons, training, acquisition of land for setting up cantonments and their expansion, and the provision of goods and services for the army, navy and air force. The second category has under it those activities that are not directly related to country’s defence. They consist of running hotels, civil aviation, banking, insurance, real estate business, bakery, sugar, clothes, oil production, etc. In addition, military capital in Pakistan is invested on a large scale in farming.

The emergence of military capital in Pakistan took place in 1954 when the first military welfare foundation came into being. This was with the funds obtained from the Postwar Services Reconstruction Fund. The military put forth its claim that it alone was capable of defending as well as developing the country.  By that time Mohammad Ali Jinnah, the founder of Pakistan was dead and the first prime minister, Liaquat Ali Khan had been assassinated. With the departure of these two leaders, the process of Muslim League’s disintegration began. The conflict of interest between the East and the West of Pakistan increased. Inside West Pakistan tensions between the Punjabis and the non-Punjabis intensified. Religion proved incapable of maintaining regional integration and social unity. In these circumstances, the military alone was a trained and disciplined force that could keep the country. It impressed its indispensability on the popular mind by underlying the danger of imminent invasion from India. The US administration, taking advantage of this situation, extended its friendship and patronage to Pakistan and brought it in a military alliance, sponsored and headed by it. Pakistan, on its part, reciprocated the American gesture of friendship by making its land available to America for espionage against the Soviet Union.

In the name of military welfare, whatever foundations came into being, they invested money in the production of tobacco, sugar and textiles where there was ample scope of making money in view of great demand. In Mardan, Khyber Tobacco Company, a sugar mill in Tando Mohammad Khan of Sindh, a cereal-manufacturing factory at Dhamial near Rawalpindi, and a textile factory in Jhelum came up. In East Pakistan military capital set up factories to manufacture jut, ceramics, and electric equipment. In addition, the Karakoram road connecting Pakistan with China was constructed by a company set up by the army.

After the departure of Jinnah and Liaquat Ali Khan, there was no leader enjoying any popular support nor was there any political party worth the name. This paved the way for army’s increasing hold over administration. Ultimately in 1958, the army came to the forefront. Since then, it has been, barring a few intervals, directly controlling the affairs of Pakistan. Whenever a democratically elected government tries to rein in the army, it is thrown out and its head is either hanged or exiled.

Military formulates defence as well as foreign policies keeping in view its own interests. As much as 68 per cent of the federal revenue goes to meet the defence budget. National resources are distributed in such way that it strengthens military capital. Feudal and bourgeois elements have become subservient to military capital and this has helped them too. For example, in spite of the drama of carrying out land reforms, feudalism has gained in strength. The media too were compliant during the days of Ayub and Zia.

In the course of time, the development of military capital has made the army as an independent class, which has quite a substantial proportion of feudal and bourgeois population. It is estimated that the total business of Pakistani military is no less than $10bn, This business is run by serving as well as retired officers. It encompasses the production of corn flakes, cement, sugar, textiles, tobacco, petroleum products, etc. It also runs travel agencies, schools, colleges and universities. It possesses at least 12m acres of land and controls one-third of heavy construction work in the country. In all, 9 million army men receive direct benefits from all this. There is a lack of transparency in business activities run by the army. Parliament has no right to look into them. Most of the important positions in the government are occupied by army people whether serving or retired. Consequently, military capital has led to the rise of cronyism and “a kleptocratic redistribution of resources and opportunities. Contrary to its claim that the military supports meritocracy, senior generals in Pakistan support their clients in both business and politics.”

It is strange that America, day in and day out, trumpets the virtues of free market and the desirability of democracy, but in Pakistan both of them have become a casualty of the dominance of military capital. America earlier supported military capital in the name of fighting communism and now it is doing in the name of combating terrorism.

gmishra@girishmishra.com