Pakistan military's profits draw ire

As dissatisfaction with President Musharraf rises across Pakistan, the military's influence over the economy has become a focus of anger toward the government.

Imran Ahmed, a former senior manager at Pakistan's power agency, begins his story as if he were setting up the punch line for a joke – which, in a sense, he is.

Several years ago, Dr. Ahmed says, the chairman of Pakistan's Water and Power Development Authority (WAPDA) had an idea to build a power station.

Being an engineer, Ahmed knew what was required. Under normal circumstances, construction would take about a year. But these were not normal circumstances.

The chairman was an Army general installed in his lucrative post by a military government intent on promoting its own. His dictum: Finish it in seven days.

"We finished it, but at the cost of many other things," including funding diverted from other worthy causes and unsafe construction conditions, says Ahmed, who spoke on the condition that his real name not be used, for fear that he might be harassed.

Ahmed's story is an extreme example of an increasingly common phenomenon in Pakistan, as the current military regime installs more of its officers in civilian jobs – a trend that is partly to blame for current political unrest here.

As Pakistan's most dominant institution, the military has long had an inordinate influence in civilian life. Pervez Musharraf, who is both Pakistan's president and Army chief, is simply looking after his own, experts say.

But critics say that under Mr. Musharraf, the practice has become more widespread than ever, engorging an already powerful military on a disproportionate share of the nation's wealth and entwining it more deeply into civilian authority.

Musharraf's regime "has been directly responsible for a military corporate empire," says Kaiser Bengali, an independent economist in Karachi. "We don't have a level playing field within the country because the military has a lot of privileges."

Military officers – many retired, but some also active – hold key posts in Pakistan's civil service academies, several of its most prestigious universities, and many of its most important agencies. Moreover, they control much of the country's prime land, which they can buy at cut rates and sell at huge profits. In a 2003 survey, the Pakistani newspaper Dawn reported that 1,027 active and retired military officers had been installed in civilian posts, ranging from ambassadors to the heads of the Post Office and National Highway Administration. A 2006 report by the Carnegie Endowment found that retired generals controlled 10 universities, five administrative training institutions, and the Education Ministry.

Since independence, Pakistan's military leaders were seen as nonpolitical fix-it men, who launched coups to clean up the messes left by failed civilian governments. But "the military under Musharraf … has truly changed its character," says Ayesha Siddiqa, an author and military critic whose book, "Military Inc.," published in May, marks the first thorough investigation into the extent of the military's penetration into Pakistan's economy and civil society.

"The military has become a ruling class and has ceased to be an arbiter," she says.

She alleges that the military runs 70 gas stations in Lahore, for example, and that it controls as much as 7 percent of the nation's private-sector assets. Since the publishing of her book last month, Ms. Siddiqa has fled the country, saying she fears that she could be arrested.

The military itself refutes her assertions. "There are no serving generals in private enterprise," says Maj. Gen. Waheed Arshad, a military spokesman. "Retired military, like any other country in the world – like the US – they're involved in real estate and in anything they want."

Yet other experts suggest that in real estate, in particular, the military is using its power to enrich its officers. As it turns over much of its property to real-estate development, the military is abiding by strict zoning laws and offering unique services like daily garbage removal. Though these measures might sound mundane, in Pakistan they are almost revolutionary – creating oases of order. It has made military cantonments the nation's most desirable neighborhoods.

Yet officers can also buy land in these areas for well below market rates. "They are offered land for 1 million rupees and can sell it the next day for 8 million rupees," says Shafqat Mahmood, a columnist for The News, a daily newspaper in Pakistan.

To military men, "this is merely as the advantage of being a military official," says Mr. Mahmood. "But it is so obvious, and it has been made easier by the fact that the military keeps taking power."

In a democracy, he says, the people can siphon off anger by voting a government out of office. Under a military regime, such anger can only kindle unrest, and these privileges are like a bellows for the public rage aflame in Pakistan.

On the surface, the daily demonstrations against Musharraf are about judicial independence, as Pakistanis demand that Musharraf reinstate the chief justice of the Supreme Court – whom he fired in March.

Yet at the events, anti-Army chants – which not long ago were unheard of – take aim at officer's self-enrichment, too. In a country where two-thirds of the population works in agriculture, a common rallying cry at the protests has been: "O generals of the country, all the acres are for you," says economist Bengali.