Enigma of the Defence Budget

faisaluno #49: I know next to nothing about Sherry Rehman.

Zardari is obviously massively corrupt. And has been convicted in Switzerland. And will be convicted in Pakistan also, if the cases are allowed to go through completely. And I have written many times, on the double-speak of PPP urban, ``liberals.`` They, on the one hand, portray themselves as liberals, and on the other hand, support life party presidents, and leaders who have wives married to the Quran. So I agree with you there 100%.

I also agree with you that politicians are much more corrupt than Generals.......

But that does not excuse the fact that the Army Generals are corrupt also. Army has legalized corruption. It is corrupt at a smaller scale than many other groups, but it still practices it. And the more it gets into business ventures the more corrupt it will get. If these business venture opportunities ever go below the rank of Brigadiers, and reach the Leiutenants and Jawans, there will be no fighting Army left.

This is what happened to the Mughal armies and others. All their Generals started getting more interested in getting land and money........

There is absolutely, without an iota of a doubt, no reason for the Army or Air Force or Navy to be in the civilian business sector. It is a huge conflict of interest. It is not where the training of the Generals happens to be. It chokes the private sector. And it corrupts the Army. Not to mention the fact that the Generals cannot run private sector ventures in profit. Fauji industries only run in profit, where there is a near monopoly, or where the Army can fill their coffers with the Army`s assets (e.g. Askari bank).

A corps commander of Lahore should want that position because he wants to defend his country, and progress his professional training and career. He shouldn`t want it because he can get a plot or two, in Lahore Defence Society, which he may not be able to get if he is commanding a corps in Mangla. A retired Colonel should not end up in civilian organizations, and take jobs away from civilians. Imagine if someone from the Foreign Service or PIA or the highway authority etc. was appointed a Brigade commander........

All of this should end. The Army is becoming the butt of jokes now, which highly affects the morale of the junior fighting officers, who do the actual fighting..........

Sherry

When next time PPP comes to power, reduce the regular recruitment in the Army by 10%. Also reduce the Army budget by 10%.

If the Army Chief does some `choon charaan`, fire him. At that time, do not compromise just to keep the `throne`. Appoint the next senior most as Army Chief and not your `favourite`.

It is pointless writing these articles & TV discussions. 50% of blame rests with the spineless and principle-less politicians. Even now, 50% of the paliament (politicians) is with military Government.

nhk

romair,

if you want to gauge the level of political corruption in pak, read the u.s. congress investigation on zardari`s citibank account activity. also fyi, sherry rehman is currently married to the guy who used to head citibank`s retail banking arm in pak in mid to late 90`s . guy`s name is nadeem hussain and he is currently based in london if i am not mistaken. another ineteresting fact about nadeen hussain is that he indirectly reported to shaukat aziz. also if i am not mistaken, shaukat aziz also testified in the hearing because he used to head citi pvt banking globally.

given nadeem hussain`s position within citi, its simply not possible that he does not know details of zardari`s corruption. and since nadeem hussain knows the truth about zardari, so does sherry rehman. and yet she continues to represent him in pak. if this does not tell people how despicable sherry rehman is i dont know will.

details of the investigations are available at the following link:

http://hsgac.senate.gov/110999_report.htm

``...During the period 1994 to1997, Citibank opened and maintained three private bank accounts in Switzerland and a consumer account in Dubai for three corporations under Mr. Zardari`s control. There are allegations that some of these accounts were used to disguise $10 million in kickbacks for a gold importing contract to Pakistan....Two deposits, totaling $10 million were made into the account almost immediately after it was opened. Citibank records show that one $5 million deposit was made on October 5,1994, and another was made on October 6, 1994...The staff invited Ms. Bhutto to provide additional information on the M.S. Capricorn Trading accounts, but she has not yet done so. ...On February 25, 1995, a third deposit of $8 million was made into the Dubai M.S. Capricorn Trading account. Records show that the payment was made through American Express, with the originator of the account listed as ``Morgan NYC.`` Citibank indicated it does not know who Morgan NYC is, nor does it know the source of the $8 million.

HP #3

`` Would someone correct me if I erroneously suggest that specifics of the defense budgets are never discussed in open congress sessions in the US too? AFAIK, this practice is followed by most countries including India, UK and France too. ``

What qualifies as a military expense ?
Subsidized land, medical care for retired military personnel
pensions for ex-servicemen
...


`` Both buy equipment in the international market.
Dollar = Indian RS 45.
Dollar = Pak Rs. 59.
That’s why the Pak percentages are higher. ``

Military equipment including spares and servicing is a fraction of the total military budgets.
Both India and Pakistan have puny procurrement budgets.

`` Nobody ever said that nuclear deterrent capability was to reduce the conventional forces. In fact, it is a downright childish argument. Unless you link the reduction of conventional forces to better relations with India and reduced tension in Kashmir, your argument would always fall flat. There is no history and not even India has reduced its conventional forces because it is nuke ready. The PPP in 1977 used this argument to promote the Nuke option in the international community and the army slammed ZAB’s head on the walls in Adialla. ``

Pakistani Army won`t reduce it size because nukes are useless against internal opponents.


romair # 7
`` I think the author may have missed the biggest financial problem, related to the Army. It is a crisis. There are now more retired Army personnel than serving. And the pension bill for the Army is larger than the salary bill now............ ``

Cut the pensions :-)

`` There is a simple solution to this:

- Cut the General Staff by 2/3rd
- Get the military out of the business sector completely
- Raise the salaries of the qualified young military officers manifold, to at least bring them, in line to some extent, with the public and private sector ``

Your solution makes military burden worse unless you reduce the standing size of the army

faisaluno #46: ``also i agree that there might be some senior army people who might be corrupt. these problems can be tackled with vigourous enforcement of laws.``

It is more than a few Generals, who are corrupt. There are a few who are corrupt at the politicians` level. But quite a few others who are corrupt; albeit at a level below the politicians` level. The second thing is that the corruption system has been legalized. Hence technically it is not viewed as corruption...........

If a person retires from PAF to PIA, after a full career, and takes the seat of a 25 year old civilian. Is it corruption? In my opinion, it is legalized corruption. He should go out in the civilian world and compete for jobs. This is small time legalized corruption.......

Somewhat larger corruption is the creation of all these Fauji industries. They are there to give jobs to retired Generals. And to create a system, where they can make money legally. What is the need for having the Army run banks, software companies, fertilizer companies, housing societies.

Can you name some other countries in the world, where serving Generals are the Chairman of the Boards of privately incorporated banks? What is the need for this?

This corruption pales in comparison to the corruption that was carried out in banks by the ruling MNAs, during the 90s. For example, Habib Bank had 11 Presidents in 10 years, during NS and BB. Each appointed the one who would give out the most corrupt loans to the ruling MNAs.

But the Army`s involvement is still a fraud. A General gets allocated a plot in Defense Housing Authority, for being a Corps Commander at dirt cheap rates. He can sell it in the evening (literally) for 1 crore ruppees. All legal...........

The military should not be allowed to place its officers in other institutions. They should have to compete for jobs, after retiring. And the military should not own, either directly or indirectly, any business venture. It should simply look after its officers and jawans, specifically junior ones, through competitive salaries............

Pakistan`s Army Generals can no longer fight. I am telling you this as first hand knowledge. I know so many of them. Every time I have met them, on my trips to Pakistan, all they talk about are plots. The Air Force ones are still OK. Luckily, Pakistan`s junior officers and sepoys and jawans are some of the best fighters in the world. This again is based on personal experience...........

romair,

i agree with you that conflict of interest is a concern with some of these organisations. also i agree that there might be some senior army people who might be corrupt. these problems can be tackled with vigourous enforcement of laws. this is not as far fetched as it sounds. recently fauji fertilizer has been involved in a tax dispute. here are the details from a research report:

FFC’s plant functioning smoothly

Morning Shout - 17 June 2005
Shagufta Irshad
sirshad@kasb.com


``...We strongly rule out rumors in the market yesterday about plant shut down at Fauji
Fertilizer on account of non-payment of property tax for its plant site....The management also highlighted the fact that any dispute with tax collecting authorities over the property tax cannot lead to suspension of work at any time as closure of FFC plant would not merely mean production losses for FFC but would also be an economic loss for the country which is currently facing urea shortage to meet requirements of the agricultural sector...``

i think if tax authorities can be empowered to move against faujis then so can s.e.c - the govt entity responsible for checking corporate abuse.

also fyi, national bank, a govt owned bank is also the house bank of govt of pak and as a result enjoys a huge advantage over other banks. pak economy in fact is one of the most freest in the world and as a result, there are very few restrictions on businessmen. as a result, mansha can own the largest textile concern and the fourth largest bank. similarly jang newspaper is allowed to run a tv channel. until recently, very few coutries permitted this.

overall, as i said before, i agree that fauji foundation`s operations need to be more transparent. i also think govt needs to make clear that its not going to bail out these foundations if they lose money. govt also needs to audit these entities very throughly every year to insure that these entities do the job for which they were set up which is to invest for the purpose of earning a decent return on the retirement saving of the personnel of armed forces. i know the situation is not perfect. however it is also no where as bad as its made out to be in the liberal press.

Ms. Zehra,

I wouldn`t hold up the example of the CCP and Mao Zedong as ``proving`` the virutes of ``Dictator for Life.`` Mao was arguably the worse thing that ever happened to China (upto and including the Opium Wars and the Japanese invasion). Read some Chinese history and find out what Mao did during the Great Leap Forward and the Great Proletarian Cultural Revolution.

Now, if you were to hold up Deng Xiaoping as ``proving`` why a lifetime job is a good thing, that is another matter!

BTW, why do so many otherwise seemingly intelligent people have this hangup about extolling the virutes of socialism? What long term good has socialism ever achieved?

Re: # 40 fais
//...if that does not prove tnt, i dont know what will...//

Looks like I touched a raw nerve with the word ``defang``!!! Mr faislano went straight down to TNT :) ...... Well - I don`t know why you feel compelled to prove TNT at the drop of the hat - but TNT is already proved many times over. So take it easy man - TNT is safe.

But this is not about TNT - this is about the criminal enterprise called paki army. Like I said ``Paki Army has to be defanged``. Of course, I can`t do it - otherwise I wouldn`t be sitting here ``flooding`` chowk, as you put it.
+++

And you said - ``pakistanis have stopped commenting on the article`` ....Well - I see Romair has ``commented`` already.

could the editors of chowk please properly credit the articles -- this first appeared in Dawn, in early June -- this is for the record

Sherry Rehman:

More power to you. I recently happen to listen to your discussions which more look like assails from regime inclined anchors to any PPP representative.

More interestingly here you are asked the same questions about party internal elections which can favor to give space and merge many parallel working bodies leadership to participate according to manifesto.
The till-death chairpersonship of BB is also a issue to be democratized, however we have examples of revolutionary leaders like Mao who served in CCP 1929-1976 carrying Marxism and fight against social imperialism which had been also the primary purpose of PPP`s establishment.

faisaluno #17: There is a difference between theory and practicality. As I stated, I know the stuff from the inside, to some extent. One could make a very good argument that the military generals are not nearly as corrupt as the politicians. I would agree with that. But that cannot be used as an excuse. Corruption - illegal or legalized - is corruption. Two wrongs don`t make a right.............

The purpose of Fauji Foundations etc. is to give jobs to retired generals. They serve no other purpose. They run quite inefficiently, by the way. Hardly any of them make money, barring a few odd companies. There are only two or three companies that keep the whole Fauji group of industries going.

Just like it is not possible for a businessman to command a corps, it is very difficult for a General to run a business. I have seen both sides, and can understand the differences.

There are huge conflicts of interests. I am in the process of opening a software office in Pakistan. It will take about another six months or so. Now, why in the world should I have to compete with Askari computers? What is the world is the Army doing in the private computer industry? How can I ever compete against them, with all the backing and funding they have?

The most profitable venture of the Army off-shoots is Askari Bank. This is what makes the money to support most of the other ventures. How does it make money? It holds the whole Army budget. Due to this, it does not have to take any risks in giving commercial loans, etc. How in the world is any other bank going to compete with it..........

All countries in the world have conflict of interest laws. People in one business cannot buy into another business. For sixty years, till 1999, the Glass Stegall Act, in the USA, forced Commerical Banks and Brokerage houses to remain separate.

Similarly in Pakistan, I believe govt. banks cannot start housing socieites. Probably because, banks could then use there leverage in handing out loans and raising the prices of their societies..........

Yet their is no restriction on the Army in getting into any kind of business!! How in the world will anyone compete with Askari computers, if it applies for a govt. contract. Take a look at the board of directors for Askari Bank (http://www.askaribank.com.pk/visionlinks.htm). The Chairman is a serving Lt. General named Waseem. The Executive Committe head is a retired Lt. Gen. named Masood. And there are four retired brigadiers on the board.

What in the world is a serving General doing heading the board of a bank? Don`t you think makes the bank a property of the Army, even if on paper, it is incorporate as a private company? How can a bank fail if it has the whole Army budget? And access to the vast military corporate empire? Askari Bank will be the last bank in Pakistan to go bankrupt. Simply because no country can let its Army go under........

Isn`t that a clear conflict of interest? This is how all these Fauji entities function. Hardly any makes money on its own. Other than the bank and a few that have almost clear monopolies in their areas.

I am all for paying military men (and women) high salaries. They risk their lives. Which is more than most of us would do for Pakistan. However, they should not be in the corporate sector. Nor should they get cushy jobs in PIA, Banks etc. on retirement. They should have to compete for those jobs...........

hahaha...mohar man, thats quite a brilliant strategy you have come up with...by flooding a website no one has heard about in pak, you will definately defang pak army...and too bad for you lot that chowk was not around a thousand years ago....otherwise imagine all the armies you would have been able to defang...and did you notice how pakistanis have stopped commenting on the article after you posted here....if that does not prove tnt, i dont know what will.

shipshape...
hehehehehe...you`r a good guy...fret not...chowk will toughen you in no time...;)

Re: # 30

We`re poifectly matched then, you in-bred and devious, we ill-bred and retarded.Cousin??.

Re # 35

Must I say it? OK, I took out first three letters.

FaisalUno, I am sorry, this is just Chowk, I should contain such silly outbursts.
Once again, I apologize profusely to you. Hope you are kind enough to accept it.

[Tere Baap ki amanat hai kya Chowk]

...correction...Chowk Tere Baap ki Jageer hai kya?