THE STRETCH FROM Kuntani Kaur, on Balochistan’s Makran coast, to the Iranian border on the west, a stone’s throw away, is always dotted with hundreds of fishing trawlers and speed boats—all loaded with barrels of oil and contraband items. On the Makran coastal highway, hundreds of pickup trucks overloaded with oil-filled barrels are a common sight. No wonder this place is of special interest for the Pakistan military.
In the guise of anti-smuggling policies and security concerns including cross-border movement of terrorists, illegal immigrants and narcotics, it is the Pakistan military that is reportedly raking in the money from the ‘informal’ (read smuggling) trade.
The standard operating procedure is laid down in an October 17, 2024 Pakistan army document: “Informal fuel trade in Kuntani Crossing Point will be jointly managed by civil administration and the Pakistan Coast Guard (PCG)… Maximum 600 boats will be permitted to operate on a daily basis… no unauthorised boats will be allowed to operate from Kuntani.”
The document adds: “As the area of Kuntani falls under the jurisdiction of 44 Division, maintenance of law and order, management of the internal security situation and resolution of issues between stakeholders in line with this SOP will remain the responsibility of Headquarters 44 Division.”
While the Kuntani trade is managed by the civil administration and the PCG, Pakistan army’s 44 Light Infantry Division retains ultimate control. Notably, the PCG is managed and controlled by Pakistan army officers.
Apparently, about 600 boats ferry about one million litres of oil daily, amounting to revenue of about 250 million Pakistani rupees every day—all under the military’s watch.
In order words, in gross violation of domestic laws, the Pakistan military seems to have institutionalised smuggling by facilitating illegal trade of oil, gas, petrochemicals, construction materials like cement, tiles and iron rods, all finding their way into the Pakistan black market, undermining legal economic activities.
“Name any business and I will tell you which unit of the Pakistan army is involved.... Go on,” Adil Raja asks me. I mumble “Shoemaking?” He replies: “The army’s Lahore-based Askari Project does it, makes shoes and woollens. Earlier it was just for the military, now they make and sell shoes to everyone.”
Raja should know. The third-generation officer in the Pakistan army got wounded in battle before taking voluntary retirement as a major and setting up his own real estate business with funds from Pakistan’s Defence Housing Authority. In 2022, he had to escape to London overnight when he raised issues related to freedom of speech and constitutional supremacy.
As spokesperson of the Pakistan Ex Servicemen Society, Raja was once the key coordinator between the Inter-Services Intelligence (ISI), the Inter-Services Public Relations (ISPR)—the military’s media wing—and the Ex Servicemen Society. The mandate was to design and spread ISI narratives.
“In Kuntani, the proceeds of this illegal trade are allegedly divided among the PCG, the general officer commanding of the 44 Division, the ISI Gwadar office, Pakistani customs and the civil administration officials,” he says.
The Pakistan military’s involvement in economic and commercial activities is quite old. “They have their finger in the economic pie in everything,” says Tilak Devasher, member of India’s National Security Advisory Board.
Over the years, the Pakistani military has assumed two overlapping avatars. One is that of a conventional military force, and under this veneer lies a deeply embedded corporate and political character. Both identities feed on each other to sustain a military class with elite privileges.
Says Wajahat Saeed Khan, a New York-based Pakistani journalist: “It is a billion-dollar empire that the Pakistani military runs in terms of real estate projects, agriculture projects, construction projects and fast moving consumer goods. Military officers are serving in retired work and the military is engaged in businesses across the country.”
The military has become the biggest corporate entity in Pakistan through its four main arms—Fauji Foundation, Army Welfare Trust, Shaheen Foundation and Bahria Foundation—besides the about 100 independent projects in several sectors. Interestingly, these four foundations are categorised as private companies and are hence outside the control of government auditors.
Says Raja: “These ventures are tax-exempt, lack civilian oversight and provide post-retirement employment for officers—ensuring long-term loyalty and compliance. The result is a self-sustaining military class that is economically insulated from the wider population. Approximately 80 per cent of officers and personnel transition into the military’s vast business ecosystem after retirement—a system that offers economic security and status, making compliance attractive. At the same time, any deviation or dissent, especially signs of democratic thinking or political questioning, is swiftly punished.”
Inevitably, the military’s role in economics, along with the associated corruption and nepotism that has crept into the system, has resulted in a faltering economy.
In 2023, Pakistan’s inflation rate hovered around 31 per cent while its foreign exchange reserves reached critically low levels.
That was when prime minister Shehbaz Sharif and army chief General Asim Munir decided to birth a new entity. On June 20, 2023, co-chaired by Sharif and Munir, a new panel was set up. Called the Special Investment Facilitation Council (SIFC), it had the stated goal of being a “single window” for the goal of $5 billion in FDI.
“Despite big promises by the SIFC, there are no results to show,” says former Pakistan army lieutenant colonel Syed Akbar Hussain, now settled in Washington DC. “Economically, Pakistan is on very thin ice. It is still dependent on doles from the IMF, World Bank and other countries. More money is now spent on debt servicing than on anything else.”
Taha Siddiqui, a Paris-based Pakistani journalist, has an interesting take: “Now the Pakistan military is also part of setting up the economic policy of the country. We’ve seen that there have been scandals where Pakistan military has awarded its own, and close contacts of the military, with contracts locally and internationally. Then we’ve heard of kickbacks the Pakistan military gets because of these investments being part of investment boards like the SIFC. This has further created a business incentive for the military that continues to exploit the Pakistani economy for its own benefit.”
Says Raja: “This economic overreach has triggered significant backlash from farmers, tribal communities and the people of Gilgit-Baltistan, who view these projects as a military land grab and an exploitation of indigenous resources. However, these protests remain largely unreported due to censorship, media control and coercive tactics used by the military, primarily through the ISI.”
The introduction of the SIFC has had the effect of further embedding the military into the country’s economic process. London-based Ayesha Siddiqa, author of the acclaimed Military Inc.: Inside Pakistan’s Military Economy, says: “With the Imran Khan government, it (military) was included in the overall national economic decision making. That has increased with the SIFC. And it’s not just one general at the top, but a team of generals who are also included on the operational side of economic decision making.”
So how does the military distinguish its roles—military and commercial?
Says Siddiqa: “Despite it being so entrenched in the economy, the military still doesn’t consider this as its main role. Its main role is still war fighting. Because that is where it draws its legitimacy from. And that’s how the military explains its economic role to the common Pakistani.”
This also calls into question the professionalism of the military because of the foray into commerce. “Professional militaries do not hold hostage their own countries [or] interfere in politics,” says Taha Siddiqui. “[They] do not engage in businesses, do not commit human rights abuses. The Pakistan military does all of that.”
Hussain, who has faced the Indian Army across the LoC but has also worked with India as part of UN missions in Namibia, says professionalism does get diluted. “Can you imagine the distraction when two principal staff officers oversee the entire military corporate under them?” he says. “The adjutant general heads the AWT (Army Welfare Trust) and so many affiliates, while the quartermaster general heads the Fauji Foundation.
“The intertwined commercial and military interest... has led to the army controlling all pillars of the state—the judiciary, the legislative and the executive. Look at how the court system has been changed and manipulated through puppet governments. How Pakistan is being run is no secret.”
In fact, General Munir’s upgrade to field marshal rank on May 20 is seen as another narrative that Islamabad wants to promote about military consolidation of power. Says Devasher: “I don’t think Munir’s position has been strengthened by being promoted. It is actually a cover up for the fact that Pakistan has lost in its latest engagement with India. They are just trying to fool the people. In any case, if at all they should have promoted [someone], it should have been their air force chief because it was primarily an air battle. It will also raise eyebrows among the other generals because now they don’t know what will happen after 2027 at the end of Munir’s extended tenure.”
Notably, at the start of his tenure, Munir had changed the command structure in the military. He implemented two parallel command chains. One is the regular chain of command led by the army chief, followed by the corps commanders, the divisional commanders and so on and forth.
The other is the agencies, the ISI and the Corps of Military Intelligence, which were assigned much enhanced roles.
Says Hussain: “Orders and executions of the regular chain of command have now been superseded by the intelligence structures. Exactly like what you had in Nazi Germany where the Schutzstaffel became a parallel command structure.”
Munir’s term began with a lot of rumblings. First, there was dissent within the ranks with most top generals standing against Munir. Except lieutenant general Shahid Imtiaz, Munir’s ‘right-hand man’, there were not too many generals who would side with him.
One reason was that Munir and Imtiaz were seen as upstarts as they had graduated from the Officers Training School in Mangla in PoK rather than the more prestigious and upscale Pakistan Military Academy in Abbottabad.
Two, there were senior officers who were avid supporters of Imran Khan as well as officers who believed in the military keeping out of mainstream politics. Interestingly, in August 2023, Munir got the parliament to controversially amend several key articles in the Pakistan Army Act and also the Official Secrets Act with the immediate aim of purging the army of elements favourable to Imran Khan. Apparently, the purge hasn’t been completed yet.
Three, there was dissent among non-Punjabis over the legacy issue of overwhelming Punjabi domination in the Pakistan military.
Four, Munir’s perceived radical slant might have been a factor, but radicalisation within the military is apparently not much of an issue at the moment.
Says Hussain: “Munir freely uses religious quotes from the Quran with the sole purpose of trying to annihilate the opposition. Every check and balance has been usurped by him based on misquoting religion all the way.”
And it seems the latest conflict with India has consolidated his position further. Says Siddiqa: “The conflict has provided justification for the military’s political, social and economic expansion because there will be fewer questions asked now… The conflict has helped build a consensus in the military for the man at the top who, with whatever planning, held India back.”
A case in point is the recent report that Pakistan could hike its defence budget by 18 per cent given the “threat” of India. “The conflict has changed the situation dramatically,” she says. “Munir is no longer the problem. Even Imran Khan has to turn around and give this very angry statement against Modi, against India. So, there is no division.”
Raja, though, says it might only be a temporary boost for the army. “In essence, the conflict offered a short-term distraction, but it has not been able to reverse the long-term crisis of confidence the Pakistan army is facing domestically.”
The feeling among the Pakistani public seems to be that the army has very much used the latest flare-up to further strengthen its hold on the country. The fact that Munir is now field marshal—only the second since Ayub Khan—means he will never go out of uniform, which will have an immense psychological impact on the military. More so after the conflict with India, Munir has consolidated his base like no other general before him. All he has to do is not cross the ‘red lines’ in Pakistan.
“In the India context, the red lines are that no one should say anything in favour of India or try to befriend it, and one should never criticise the Pakistan army,” says Devasher. “Politicians like Nawaz Sharif got into trouble when they wanted to have better relations with India. In Pakistan, politicians need the military, the military doesn’t need the politicians. So what the military does is to play one politician against the other.”
Says Hussain: “People have to realise that extremist leadership is not going to serve the interest of the people. The way out is a more honest and humane approach by the leadership and to resist all kinds of fascist tendencies.”
The primary challenge for Munir will be to lift the image of the military in the eyes of the public so that it is no longer seen as being focused primarily on self-preservation, but rather acting in national interest.