Pakistan_ A Hard Country - Anatol Lieven [100]
When servicemen retire, only they themselves (and not their families) are guaranteed military health care. The Fauji Foundation, with a budget of around Rs4 billion a year, therefore provides health care, education and vocational training for the children and dependants of ex-servicemen, and for the parents, widows and families of soldiers killed or disabled in action.
Men actually serving are helped by the welfare trusts of the army, navy and air force, with help for their families’ education and support for amenities like sports clubs. The Army Welfare Trust has total assets of some Rs50 billion ($590 million), and owns among other things 16,000 acres of farmland, rice and sugar mills, cement plants, and an insurance company. Unlike the Fauji Foundation, the welfare trusts benefit from lower rates of tax and other state subsidies.
As of 2009, the Fauji Foundation runs 13 hospitals, 69 medical centres and mobile dispensaries, 93 schools, 2 colleges (one for boys and one for girls), and 77 technical and vocational training centres. Since its creation, it has provided Rs3.2 million stipends to the children of soldiers. It also runs a private university, with a proportion of funded places for the children of ex-servicemen. Having spent some time visiting military hospitals and talking with soldiers who have been disabled in the fight with the Taleban, I must confess that all this seems to me both necessary and admirable. In addition, the Fauji industries have a reputation for being well run and looking after their workforce.
The chief objections raised against them are threefold. Firstly, that the military should not be involved in commercial business on principle. This seems to me just another case of insisting that Pakistan rather selectively follow Western models. Since the 1990s, the Chinese military has divested itself of its formerly huge direct commercial holdings, but it has done so by spinning these off into independent companies run by retired officers – similar to those of the Fauji Foundation. The Chinese economic model is emerging as a serious rival to that of the West in Asia, so there is no particular reason why the Pakistani military should be judged according to Western patterns in this matter.
The parallel with China is also interesting from another point of view. As the Chinese, South Korean, Taiwanese (and even to some extent Japanese) examples show, high levels of corruption and of state links to private companies are entirely compatible with the highest rates of economic growth. What appears essential, though, is that the corruption be informally regulated, limited, and above all predictable; and that both the corruption and the relationship with companies exist in an atmosphere which demands that patronage produce economic results, and not merely the endless circulation of money and sinecures. If Pakistan could move towards this kind of corruption, it would have taken an immense step towards economic, political and indeed moral progress.
This argument also partially answers one of the most serious objections to the industries owned by the military: that the Fauji and Army Welfare Fund industries’ link to the state gives them unfair commercial advantages. It is true that the Welfare Fund has benefited from subsidies, but at least they appear to have been ploughed back into its industries and not simply stolen, as has been the case with so many state loans to private business.
Moreover, if the military businesses were deriving really massive competitive advantages from the state, it should be above all rival businessmen who complain, and in my experience this is not the case. On the contrary, ‘it is better that the military is involved in industry – it helps them understand industry’s concerns’, as an industrialist friend told me. Only