The federal government has proposed a substantial allocation of PKR 2.12 trillion for the armed forces in the upcoming budget starting July 1. This represents a notable increase of 17.6 percent from last year's 15 percent increase to PKR 1.80 trillion. This also marks the second-largest percentage increase in defense allocations, slightly below the 18 per cent increase during the 2017-18 fiscal year under the previous Nawaz Sharif-led PML-N government.
Despite representing 1.7 percent of GDP, in line with the previous year, this figure has sparked debate: some highlight it as a sign of military austerity amid economic challenges, while others argue it marks an increase overall significant of almost 18 percent. in annual allocations.
The allocation of financial resources within Pakistan's armed forces reveals that the Pakistan Army receives 47.5 percent, followed by 21.3 percent of the Pakistan Air Force and 10.8 percent of the Navy. from Pakistan. Additionally, 20.3 percent is allocated to Pakistan's inter-service intelligence services and associated organizations. This distribution underlines the significant influence of the Pak Army and its affiliated inter-service entities, which together control almost 68 percent of the financial resources. This allocation also reinforces the Army's predominant role within the military establishment and its broader impact on government affairs. However, the actual allocation to the armed forces exceeds what is officially reported, as certain expenditures are classified into different budget items at the insistence of the military establishment, which underlines its important influence over government decisions. This distinction is evident in the way current military expenditures, including salaries and social benefits totaling PKR 827 billion (39 percent of the defense allocation), are included in the defense budget. Meanwhile, financial provisions for pension payments to retired military personnel come from the general national budget and not from the defense allocation. Overall, defense spending exceeds 15 percent of Pakistan's total annual budget.
Consequently, the government of Pakistan allocated an additional PKR 662 billion from its current expenditure to meet the pension and welfare needs of ex-servicemen. This amount, equivalent to almost 31 percent of the annual defense allocation, is not formally included in the armed forces budget. This approach may be intentional to obscure the true scope of defense spending and avoid public scrutiny. Together, the expenses of the current and former military amount to PKR 1,489 billion from the state treasury.
This situation prompts investigations into the military's significant influence over Pakistan's financial resources and, consequently, its influence over day-to-day governance. The demand for government funding by military leaders is surprising, especially considering the extensive economic interests in various sectors maintained by the three branches of the armed forces, led by the Army. Pakistan's military manages a diverse portfolio of multi-billion dollar economic enterprises spanning construction, manufacturing, real estate, telecommunications, shopping complexes and other sectors. Various estimates indicate that Pakistan's military conglomerate, which encompasses entities such as the Fauji Foundation, Shaheen Foundation, Bahria Foundation, Army Welfare Trust (Askari group) and Defense Housing Authority (DHA), generates annual revenue of $26.5 billion as of 2023. According to Pakistan government presentation to the Senate, Fauji Foundation owns various entities such as Askari Bank, Foundation Gas, Seed Multiplication Farm, Fauji Fertilizer, Fauji Cement, Fauji Power, Foundation Securities, Fauji Meat, Fauji Foods and Overseas Employment Services, along with numerous Commercial Complexes nationwide .
Despite Pakistan's economic challenges in recent years, these military companies have seen significant growth. For example, the Fauji Foundation's assets alone reportedly increased by 78 percent between 2015 and 2017, according to Bloomberg.
Additionally, the Shaheen Foundation oversees 21 projects, including FM 100 radio, Shaheen Airport Services, SAPS Aviation College, Shaheen Aerotraders, Shaheen Knitwear, Shaheen Medical Services, Shaheen Insurance, Hawk Advertising and two shopping complexes in Karachi and Lahore. Meanwhile , Bahria Foundation manages eighteen companies across Pakistan including Bahria Transshipment Hub, Bahria Enterprise Systems and Technologies, Bahria Dredging Company, Maritime Technical & Support Services, Bahria Maritime Services, Bahria Travels, Bahria Pharmacy, Al-Falah Trading Agency, Bahria. Sino-Pak service stations and refinery.
Additionally, the Army Welfare Trust (AWT), managed by the Pakistan Army as the Askari group, oversees several business companies such as Askari Insurance, Askari Aviation, Askari Airport Services, Askari Travels, Mobil Pakistan, AWT Investments, Askari Enterprises, Army Welfare . Sugar Mills, Askari Guards, Askari Wool Mills, Askari Shoes, Askari Fuels and Askari Real Estate. Additionally, the Defense Housing Authority (DHA) has developed eleven housing estates in major Pakistani cities including Islamabad, Lahore, Karachi, Peshawar and Quetta.
What distinguishes these military companies from private and government entities is their exemption from state oversight mechanisms. Parliament rarely examines the military budget or audits its expenditures. Civilian administrations have consistently failed to hold the military accountable for its business interests, largely due to deficiencies in the administrative framework. Exploiting these loopholes, the military has established itself as a parallel authority in politics and economics, operating free of civil supervision. The compromised political elite, vying to serve as a front for a military-dominated government, further complicates this dynamic.
Thus, although ostensibly aimed at supporting the well-being of service personnel, the profits made by military corporate entities benefit shareholders and managers, many of whom are active or retired military officers. Rather than directly improving the well-being of the military or easing the state's economic obligations, these companies primarily serve the personal financial interests of military leaders. Meanwhile, they continue to receive significant government funding for the military's welfare expenses.
The Pakistan Army's significant utilization of vital financial resources, both through budget allocations and other channels, facilitated by its collaboration with civil authorities such as the Shehbaz Sharif-led PML-N government, seriously hampers recovery efforts. The military's operational dynamics underscore the urgent need for Islamabad to recognize that expanding military budgets pose challenges in defining and limiting the military's appropriate role in national affairs.
Despite representing 1.7 percent of GDP, in line with the previous year, this figure has sparked debate: some highlight it as a sign of military austerity amid economic challenges, while others argue it marks an increase overall significant of almost 18 percent. in annual allocations.
The allocation of financial resources within Pakistan's armed forces reveals that the Pakistan Army receives 47.5 percent, followed by 21.3 percent of the Pakistan Air Force and 10.8 percent of the Navy. from Pakistan. Additionally, 20.3 percent is allocated to Pakistan's inter-service intelligence services and associated organizations. This distribution underlines the significant influence of the Pak Army and its affiliated inter-service entities, which together control almost 68 percent of the financial resources. This allocation also reinforces the Army's predominant role within the military establishment and its broader impact on government affairs. However, the actual allocation to the armed forces exceeds what is officially reported, as certain expenditures are classified into different budget items at the insistence of the military establishment, which underlines its important influence over government decisions. This distinction is evident in the way current military expenditures, including salaries and social benefits totaling PKR 827 billion (39 percent of the defense allocation), are included in the defense budget. Meanwhile, financial provisions for pension payments to retired military personnel come from the general national budget and not from the defense allocation. Overall, defense spending exceeds 15 percent of Pakistan's total annual budget.
Consequently, the government of Pakistan allocated an additional PKR 662 billion from its current expenditure to meet the pension and welfare needs of ex-servicemen. This amount, equivalent to almost 31 percent of the annual defense allocation, is not formally included in the armed forces budget. This approach may be intentional to obscure the true scope of defense spending and avoid public scrutiny. Together, the expenses of the current and former military amount to PKR 1,489 billion from the state treasury.
This situation prompts investigations into the military's significant influence over Pakistan's financial resources and, consequently, its influence over day-to-day governance. The demand for government funding by military leaders is surprising, especially considering the extensive economic interests in various sectors maintained by the three branches of the armed forces, led by the Army. Pakistan's military manages a diverse portfolio of multi-billion dollar economic enterprises spanning construction, manufacturing, real estate, telecommunications, shopping complexes and other sectors. Various estimates indicate that Pakistan's military conglomerate, which encompasses entities such as the Fauji Foundation, Shaheen Foundation, Bahria Foundation, Army Welfare Trust (Askari group) and Defense Housing Authority (DHA), generates annual revenue of $26.5 billion as of 2023. According to Pakistan government presentation to the Senate, Fauji Foundation owns various entities such as Askari Bank, Foundation Gas, Seed Multiplication Farm, Fauji Fertilizer, Fauji Cement, Fauji Power, Foundation Securities, Fauji Meat, Fauji Foods and Overseas Employment Services, along with numerous Commercial Complexes nationwide .
Despite Pakistan's economic challenges in recent years, these military companies have seen significant growth. For example, the Fauji Foundation's assets alone reportedly increased by 78 percent between 2015 and 2017, according to Bloomberg.
Additionally, the Shaheen Foundation oversees 21 projects, including FM 100 radio, Shaheen Airport Services, SAPS Aviation College, Shaheen Aerotraders, Shaheen Knitwear, Shaheen Medical Services, Shaheen Insurance, Hawk Advertising and two shopping complexes in Karachi and Lahore. Meanwhile , Bahria Foundation manages eighteen companies across Pakistan including Bahria Transshipment Hub, Bahria Enterprise Systems and Technologies, Bahria Dredging Company, Maritime Technical & Support Services, Bahria Maritime Services, Bahria Travels, Bahria Pharmacy, Al-Falah Trading Agency, Bahria. Sino-Pak service stations and refinery.
Additionally, the Army Welfare Trust (AWT), managed by the Pakistan Army as the Askari group, oversees several business companies such as Askari Insurance, Askari Aviation, Askari Airport Services, Askari Travels, Mobil Pakistan, AWT Investments, Askari Enterprises, Army Welfare . Sugar Mills, Askari Guards, Askari Wool Mills, Askari Shoes, Askari Fuels and Askari Real Estate. Additionally, the Defense Housing Authority (DHA) has developed eleven housing estates in major Pakistani cities including Islamabad, Lahore, Karachi, Peshawar and Quetta.
What distinguishes these military companies from private and government entities is their exemption from state oversight mechanisms. Parliament rarely examines the military budget or audits its expenditures. Civilian administrations have consistently failed to hold the military accountable for its business interests, largely due to deficiencies in the administrative framework. Exploiting these loopholes, the military has established itself as a parallel authority in politics and economics, operating free of civil supervision. The compromised political elite, vying to serve as a front for a military-dominated government, further complicates this dynamic.
Thus, although ostensibly aimed at supporting the well-being of service personnel, the profits made by military corporate entities benefit shareholders and managers, many of whom are active or retired military officers. Rather than directly improving the well-being of the military or easing the state's economic obligations, these companies primarily serve the personal financial interests of military leaders. Meanwhile, they continue to receive significant government funding for the military's welfare expenses.
The Pakistan Army's significant utilization of vital financial resources, both through budget allocations and other channels, facilitated by its collaboration with civil authorities such as the Shehbaz Sharif-led PML-N government, seriously hampers recovery efforts. The military's operational dynamics underscore the urgent need for Islamabad to recognize that expanding military budgets pose challenges in defining and limiting the military's appropriate role in national affairs.
