(Reuters) - When Pakistan’s army officers are not watching their old rival India or fighting Taliban insurgents, they are busy running a business empire that gives them an iron hold on society.
As one saying goes here: “Every country has an army, Pakistan’s army has a country.”
Pakistan’s 600,000-strong army has financial muscle flexed across industries from oil and gas to cereals and real estate — it even set up its own airline. Its Inter-Services Intelligence (ISI) spy agency is so pervasive it is described as a “state within a state.”
“The expanse of the military is unimaginable,” said Ayesha Siddiqa, author of “Military Inc,” which shines a light on the eye-popping sway that the army has beyond the nation’s security affairs.
“They even run bakeries. From micro-level activity to macro-level activity they are everywhere.”
You don’t have to look far beyond the capital for a glimpse of the military’s wealth. In one suburb, workers water lawns and trim hedges on farms where both active and retired generals live in swanky villas.
Given its grip on security, society and its stunning economic reach, no wonder many find it hard to believe that the army did not know that the world’s most-wanted man had been living for years just 50 km (30 miles) from Islamabad.
The government has rejected allegations that the killing of Osama bin Laden by U.S. special forces in the garrison town of Abbottabad on May 2 showed Pakistani incompetence in tracking him down or complicity in hiding him.
But dislodging suspicion that the army knew all along where the al Qaeda leader was holed up may be difficult given the army’s vast sphere of influence.
The military has ruled Pakistan for more than half of its short history and, although it is not ruling the country now, its far-reaching clout maintains a lop-sided balance of power between the security establishment and the civilian government.
This generates permanent doubt about the stability of the nuclear-armed country, which has seen three military coups since it was carved out of India in 1947.
“The military may be reassuring to Pakistanis in some ways. But it can have an opposite affect,” said a Western diplomat in Islamabad. “A brighter future depends on a functioning government, a country that is opening up and looking for international trade, not looking inwards.”
“From the perspective of building democratic institutions it is worrisome when you have these large military organisations that basically cover large segments of the economy.”
Despite its business empire, which Siddiqa estimates is worth up to $15 billion, the military is a huge drain on the country’s finances. She says about 26 percent of government expenditure flows to the defense budget.
Dependent on an $11 billion International Monetary Fund loan to keep the economy afloat, the government is already struggling to deliver on crucial tax and energy sector reforms that would bring fiscal discipline.
Turning the tables on the military is highly unlikely in the South Asian nation where a civilian government has never served out its full five-year term.
The military also receives billions of dollars in aid from Washington, even though it is reluctant to go after groups like the Pakistan-based Haqqani network, an Afghan Taliban faction fighting U.S. forces in Afghanistan. Pakistan sees the Haqqanis as an asset to counter Indian influence in Afghanistan.
Since writing her book in 2007, Siddiqa has noticed that the military now asserts intellectual control over Pakistan by influencing the media and keeping its ideological options open.
“If there are some segments of the ISI who are sympathetic to bin Laden, or to militancy, then effectively it keeps them relevant to the radicals, the militant right-wing community,” she said.
“The liberals think the military is secular, therefore they remain relevant to them too. Whatever way you look at them they continue to be and they will always remain in fashion.”
Some, like former Finance Ministry adviser Sakib Sherani, say the military’s influence is exaggerated and that they are not always effective, so it is possible that bin Laden lived in Abbottabad undetected.
He laughs when recalling a joke that went around after the Taliban insurgents began major suicide bombings and shooting attacks in Pakistan in 2007: a guy with a cannon tied to the roof of his car stops at a government security checkpoint and is asked if he has anything to declare, and he says ‘no’.
The military came under rare public criticism after revelations that bin Laden had spent possibly over seven years in Pakistan, about a two-hour drive from ISI headquarters.
His presence angered the United States, as well as ordinary Pakistanis, whose respect for the military was riding high after army-led relief operations during massive floods last year.
The bottom line for many, however, is that the military is the only effective Pakistani institution in a crisis, unlike the country’s succession of inept and corrupt civilian governments.
“The reality is that civilian institutions are not about to be empowered any time soon and, in these circumstances, if the army is weakened you are left with nothing — a potential Somalia,” said Kamran Bokhari of global intelligence firm STRATFOR.
Pakistanis who are likely to be waiting around for proper government services, better schools and jobs for years to come can always turn to the army’s Fauji Foundation, which says it provides welfare services to about 10 million people.
There is also the Army Welfare Trust, which among other things owns about 50 percent of Askari Bank, one of Pakistan’s leading banks.
Asked why she does business there, rather than with well-known foreign commercial banks or other local ones in Islamabad, government employee Maha Jibeen was quick to answer.
“It belongs to the army. That means it is run efficiently.”
Editing by John Chalmers