Pakistan_ A Hard Country - Anatol Lieven [99]
General Naqvi justified the system of land purchase to me in words that have been used by other officers to justify the patronage system as a whole:
The officer in general sees himself as leading a frugal life compared to the civilian officials, let alone the politicians and businessmen. An officer’s career may seem privileged, but it involves a nomadic life, living for long years in freezing or boiling garrisons in the middle of nowhere, not being able to look after your children after a certain age because they have to be sent off to school and live with your parents. Wages have gone down radically compared to the private sector over the past thirty years, though you are still quite handsomely rewarded at retirement. That is why it is so important to have the possibility to buy land for a house over a long period and on easy terms ...9
The problem is that the military’s power within the state (or importance to the state) has meant that over the years the state has given these Defence Housing Associations (DHAs) free land in what used once to be outer suburbs of cities but are now among the most expensive pieces of real estate in Pakistan. In the case of the Lahore DHA, according to the BBC, the real value of a plot increased in the six years from 2000 to 2006 from $65,000 to more than $1.5 million.10
Inevitably, officers are buying their plots at subsidized rates and then selling them at market ones; and generals, who can acquire up to four plots depending on their rank (or even more at the very top – Musharraf had seven), are making fortunes – perfectly legally. Like US generals taking jobs with arms companies, this might be said to come under the heading of behaviour which isn’t illegal but damned well ought to be; and is indeed attracting some criticism within the military itself. In the words of Major-General (retired) Mahmud Ali Durrani,
They should have given every officer just one plot and then there would have been no criticism, but people got greedy. When I was a captain, I was the only officer I knew who had a car of his own (a present from my father) – and I couldn’t afford to buy a new tyre! Everyone used to bicycle to work. But then society and the middle classes became more affluent, and the officers felt that they had to catch up. The army couldn’t afford higher pay, so they looked for other ways.11
With the exception of the state-owned armaments companies, Pakistan’s military businesses were created to look after retired and disabled soldiers. The foundations were laid by the British Military Reconstruction Fund for retired and wounded Indian soldiers during the Second World War. In 1953, the Pakistani military decided to invest their share of the remaining funds in commercial ventures, with the profits still being used for the same purpose.
In 1967 the resulting complex of industries and charitable institutions was renamed the Fauji Foundation. By 2009, the Fauji Group (the commercial wing) had assets worth Rs125 billion ($1.48 billion), and the Fauji Foundation (running the welfare institutions), Rs44 billion. A popular misconception notwithstanding, the Group’s commercial activities are not exempt from taxation, and in 2005 – 6 they paid Rs32.4 million in taxes. Its spending on welfare, however, is tax-exempt as a charity.
The Fauji Board is headed by the chief secretary of the defence ministry (a civil servant), and made up of serving senior officers. The chief executive is a retired general. The Fauji Group started in textiles, and now owns or has shares in fertilizer, cement, cereal and electricity plants, security