Understanding Corruption in Pakistan

A Civic Literacy Series · Part 1 of 5

Military Inc. — the economy no one audits

How the armed forces’ commercial empire grew into a huge slice of the economy that sits largely outside normal scrutiny — and why that matters.

Adapted from “20 Angles on Corruption in Pakistan” by Sawal
$5.9bn
Value put on Fauji Foundation by the EPBD think tank’s Wealth Perception Index, August 2025 — first of 40 groups
$20bn
Ayesha Siddiqa’s 2007 estimate of total “Milbus” — her own “rough figure,” disputed by the military
5,000+
Employees the Army Welfare Trust reports on its own company profile

What it is

Pakistan’s armed forces run one of the largest business networks in the country, organised mainly through “welfare foundations.” Officially they support veterans, widows, and serving personnel. In practice they have grown into commercial empires touching cement, fertiliser, banking, cereal, energy, real estate and more.

The problem is not that soldiers run businesses — it is scrutiny. In Military Inc.: Inside Pakistan’s Military Economy, published in 2007, the researcher Ayesha Siddiqa coined the term “Milbus”: military capital used commercially but neither recorded in the defence budget nor subjected to the audits and questions that civilian businesses and government departments must face. Her figures date from that 2007 book, and the military’s own ISPR published a booklet contesting them at the time. When a large slice of the economy answers to no outside auditor, the ordinary rules of competition and accountability simply stop applying to it.

How the structure works
ARMED FORCES institutional backing & land FaujiFoundation Army WelfareTrust (Askari) DHA(housing) ShaheenFoundation BahriaFoundation operate businesses across the civilian economy Cement & fertiliser Banking & insurance Energy Real estate Food, retail, media THE AUDIT GAP profits & assets sit largely outside parliamentary audit and open competition
The same institution that audits and regulates others runs commercial businesses that face little outside audit themselves. That asymmetry is the heart of the problem.
By the numbers
The scale of the military’s commercial footprint
Entity / measureWhat it doesReported scale
Fauji FoundationConglomerate: fertiliser, cement, food, power, financeValued at roughly $5.9 billion — first of the 40 groups in the EPBD Wealth Perception Index, August 2025
Army Welfare Trust (Askari)Banking, cement, fuel, real estate, insurance5,000+ staff on the Trust’s own company profile; Brömmelhörster and Paes put its assets at Rs 17 billion in their 2003 survey of militaries in business
“Milbus” (total military capital)Combined commercial wealth across foundations & landPut at up to $20 billion by Ayesha Siddiqa in 2007 — her own “rough figure,” roughly half land and half other assets, and contested by ISPR
DHA (Defence Housing Authority)Prime urban land development in every major cityA dominant force in real estate — see Part 3

Why it matters to you

An economy outside scrutiny distorts everything around it. Private firms struggle to compete with businesses that enjoy land, tax, and regulatory advantages no civilian company can match. Capital and talent flow toward the protected sector instead of the most productive one — an opportunity cost the whole country pays in slower growth. And through entities like DHA, control of prime urban land helps push home ownership out of reach for ordinary families.

The everyday hook

Follow the money from a single bag of cement or a housing plot, and surprisingly often it leads back to an institution that audits everyone — but not itself.

What to ask