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October 7, 2002
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Military Inc. Dominates Life in Pakistan
* Asia: The armed forces prevail not only in government but also in the economy. Elections this week are unlikely to alter the situation much.

  Times Headlines

KARACHI, Pakistan -- Generals have governed Pakistan longer than politicians, and over their many years in power, the military has refined the skill of stealth rule to an art. So when voters go to the polls Thursday in the first general elections since Gen. Pervez Musharraf seized power in an October 1999 coup, the men in uniform won't be surrendering power—just sharing some of it.

A growing number of detractors say Musharraf, who declared himself president last year, is trying to disguise military rule as liberal democracy. Musharraf, who will remain president and commanding general after the legislative elections, forced through constitutional changes in August to guarantee the armed forces a central role in government.

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Musharraf has granted himself the power to dismiss an elected parliament and prime minister. He also has created a National Security Council and given several seats to military officers. Opponents say that will allow the military to oversee an elected government.

In addition, Musharraf has extended the military's reach into state-run companies and agencies, installing loyal officers in place of civilians at the top of the entities that control everything from the phone system and postal service to road construction and computer databases on citizens.

From Cereal to Fertilizer

This administrative power melds with the military's already enormous commercial enterprises, which dominate large parts of Pakistan's economy with a network of companies that make products such as breakfast cereals, milk and fertilizer. The military's business ventures include an airline, an FM radio station, a pay-TV channel, insurance, real estate and travel agencies, and one of the country's largest banks. All this in a nation that devotes a very high 29% of its budget to the armed forces, according to the World Bank.

Critics call this the relentless militarization of Pakistani society and charge that the generals who seized power promising to rid the country of corruption are now supervising a more subtle form of it.

Ayesha Siddiqa-Agha, a security analyst at Qaid-e-Azam University in Islamabad, the capital, has spent years investigating the military's business interests and says they aren't nearly as clean as they claim.

"When you dig into them, you find out they are inefficient, and there is evidence of corruption," Siddiqa-Agha said. "There is also evidence of corruption linked to monopolization of government contracts. That has increased in the past three or four years."

Military regimes have governed Pakistan for more than half of the 55 years since Britain granted the Indian subcontinent independence. But the armed forces, especially the army, have strengthened their control over government and the economy under Musharraf, said Mian Raza Rabbani, a former federal law minister.

"After Oct. 12, 1999, Pakistan has perhaps witnessed the greatest militarization of civil society in its entire history," said Rabbani, secretary-general of exiled former Prime Minister Benazir Bhutto's Pakistan People's Party. "Never has the military been inducted into such low levels of civil society."

Maj. Gen. Rashid Qureshi, Musharraf's spokesman, said Rabbani and Siddiqa-Agha are wrong and insisted that the 1999 coup gave Pakistan a high-quality government that is cleaning up the problems it inherited.

"In the last years, there has been no martial law or military government," Qureshi said. "It's a government of civilians. President Musharraf selected the best Pakistani civilians available in the world. And they are the ones who formed the cabinets at the central level and at the provincial level. There is no 'militarization of society.' "

But Siddiqa-Agha, former director of naval research for Pakistan's navy, said Musharraf has put about 500 uniformed officers in control of government agencies and state-run corporations. The president has made no commitment to return any of those jobs to civilians, and a newly elected government isn't likely to insist on it, she added.

"The military is still powerful, and the fear is there," Siddiqa-Agha said. "You don't want to go out of your way and annoy the military as soon as you take over."

One military man now heading a civilian agency is Maj. Gen. Farrukh Javed, whom Musharraf installed as chairman of the National Highway Authority, which is planning projects worth more than $800 million this fiscal year.

Last month, the head of a private consortium building a major highway admitted at a news conference that he won the $117-million contract—awarded without competitive public bidding—with the help of retired army Brig. Aftab Siddiqui, the father-in-law of Musharraf's son Bilal.

Sheikh Yousaf, who owns Husnain Construction Ltd., said the brigadier was a consultant on the project. But he isn't on the payroll anymore, Yousaf added. When reporters pressed for more details, Yousaf's son ran onto the stage and told him not to answer any more questions.

Pakistan's water and power agency is another major state entity run by a man handpicked from the army. Lt. Gen. Zulfiqar Ali Khan has headed the agency since 1998, when then-Prime Minister Nawaz Sharif asked the military to take charge of it because it was a mess, said Qureshi, the presidential spokesman. Khan retired from the army last year, but in his portrait on the agency's Web site he is dressed in army khaki and a beret.

One of Pakistan's biggest employers, the utility is accused of squandering money and, in at least one case, stealing it.

In June, Pakistan's auditor-general reported that $32 million was embezzled from the utility from 2000 to 2001. And it is one of three state-run entities that "are unanimously seen as the most corrupt institutions and responsible for most of the harassment of the private sector," John Wall, the World Bank's director for Pakistan, told a Paris conference in April.

The second company that Wall singled out was the Karachi Electric Supply Corp. Ltd., also run by Khan and army Brig. Tariq Saddozai. The government insists that both firms are well run.

"The army was asked to assist a civilian government [in 1998] to reform these two institutions, and today you will find they are vastly improved," Qureshi said. The water and power agency "was collapsing four years ago. It's been reformed and is much better than what it was, and that was what the army has been able to do."

Third on the World Bank corruption list was the tax-collection agency. It is headed by a civilian.

Praise for Officers

Some military officers have garnered praise for their efforts to eliminate graft at public agencies. Transparency International, a Berlin-based anti-corruption organization, lauded Brig. Mohammad Behram Khan of the Karachi Water and Sewerage Board in February for committing himself to award contracts to low bidders and to shun bribes and kickbacks. He also saved the utility millions in consulting fees, the group said.

Still, complaints of foul water supplies and chronic shortages remain. A leaked report by the utility's staff said the drinking water for about 14 million people is heavily polluted with toxic waste. Khan was replaced last month by a retired army brigadier. Utility officials did not respond to an interview request Friday.

Beyond running many public agencies, Pakistan's armed forces wield still more economic clout through four foundations created to aid retired personnel and their families by giving them jobs, a practice dating back to British rule. The largest is the Fauji, which translates as "military."

The Fauji was established as a charity in 1953, with an endowment of $300,000. It is now a corporate empire that includes sugar mills, a cement factory and a natural gas supplier. Another foundation, the Army Welfare Trust, controls one of Pakistan's biggest financial institutions, Askari Commercial Bank Ltd. Such conglomerates, Siddiqa-Agha said, take business away from private companies.

Like the defense budget, the military's business dealings are largely beyond public scrutiny, and the armed forces discourage journalists and others from asking questions, Rabbani and others complain.

Shaheen Sehbai, former editor of the English-language daily the News, said he often was pressured by officials to either not publish, or at least tone down, stories that Musharraf's government didn't like.

In July 2001, his newspaper uncovered an alleged $17-million insider fraud at the Employees Old Age Benefit Institution, the government's pension fund. Sehbai said he quickly took heat from senior officials.

Exile in Virginia

"If you expose corruption, you pay," said Sehbai, who now lives in self-imposed exile in Virginia and publishes the crusading South Asia Tribune on the Internet.

He said police are harassing relatives he left behind, including several who have been jailed for questioning on what Sehbai insists is a trumped-up charge that he robbed his former brother-in-law's house at gunpoint. A cousin's 18-year-old son has been in jail since late August without charge. Qureshi, Musharraf's spokesman, insisted that police are acting independently in a criminal investigation.

Sehbai fled Pakistan with his wife and four children in February, after publishing a story that said Ahmad Omar Saeed Sheikh, convicted in the murder of Wall Street Journal reporter Daniel Pearl, had admitted links to Pakistan's Inter-Service Intelligence agency.

Sehbai said he was urged to apologize to the ISI's political and media chief, Maj. Gen. Ehtasham Zamir. But he refused.

"They wanted me to go and tell them that I wouldn't do it again, and then they would all be happy.... I won't do that. I'm not going to tell them I'm sorry."

Rabbani, of Bhutto's party, and other politicians accuse Musharraf of using the ISI to rig Thursday's election by coercing opposition candidates to quit and join parties that support him.

Dozens of candidates have been threatened with prosecution on corruption charges, or punishment, if they don't change allegiance, Rabbani charged. Musharraf's officials deny the claim. Rabbani's office has submitted a thick file on the alleged tampering to Pakistan's election commissioner, who has promised to investigate.

"In the history of Pakistan, we have not seen such interference in an attempt to gerrymander the results of the elections," Rabbani said.

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