Welfare funds: civil-military comparison

Islaw Khan · #1 Wednesday, September 16, 2009

Welfare funds: civil-military comparison

Wednesday, September 16, 2009
Masood Sharif Khan Khattak

The surest way to fritter away a massive financial capital with no short or long term gains is to distribute it in small sums to millions of people. Such a distribution can never result in poverty alleviation but can open the floodgates leading to massive corruption. Who can ever check whether someone, imaginary or real, living on some distant mountain top in Hazara or Azad Kashmir actually got the paltry amount shown against his/her name in some real or fictitious list? Eventually, billions of rupees are lost with nothing achieved.

The Pakistan Zakat Fund and Bait-ul-maal have now been in existence for many years. Over the 62 years of independence, successive governments have added welfare funds or schemes, most of them as unimaginative as the last one. These schemes have always fizzled out with the demise of the governments that gave birth to them after huge amounts were used without any significant goals having been achieved. Besides these two, there are many other welfare projects on the civil side, for instance, the Employees Old Age Benefit Institution (EOBI) which today controls a colossal Rs160 billion (two billion dollars) management fund. All these civil sector welfare schemes have nothing substantial to boast about, despite the fact that all these schemes over the years have used billions of rupees.

On the contrary, the military -- more specifically the army -- welfare schemes have done exceedingly well. It may be mentioned here that the air force and naval welfare schemes have essentially followed in the footsteps of the army and have also done well. Even the Police Service of Pakistan has followed the armed services model and formed a police foundation that manages some business concerns. All military welfare foundations are now ever-expanding corporate entities. Sadly, nothing spectacular can be said about the funds managed by the political/civil authorities.

Criticism about why the army is in the corporate sector is unfounded because it has something like eight per cent of the country's population to look after in post-retirement periods as well as during times of war. If the army welfare organisations invest, earn and meet their welfare obligations, re-invest surplus funds and increase their corporate base, they are doing something right. Additionally, all of it contributes to the overall good of the country in terms of providing job and business opportunities. Commercial activity contributes positively towards many sectors of national growth. As opposed to this, the political-civil model based on unimaginative distribution of funds without first investing them in profitable corporate ventures is a proven unsuccessful model.

The army has two basic organisations, that is, the Fauji Foundation and Army Welfare Trust. Today, the Fauji Foundation owns huge business concerns in the fields of fertilisers, power generation, oil terminals and distribution, gas exploration and production, liquid petroleum gas, cereals, food stuff, stock exchange, overseas employment, security services etc. The Army Welfare Trust, through its Askari Group of Business Enterprises, manages businesses like banks, leasing, general insurance, cement production, aviation services, private security guards, sugar mills, farms and seeds, compressed natural gas outlets, woolen mills and real estate. Besides, the Defence Housing Authorities in Lahore, Karachi and Islamabad have contributed towards solving the country's housing problem and have generated jobs for military and civil personnel alike. These housing authorities have eventually become a source generating immense business activity providing jobs and business to hundreds of thousands of people. Critics will criticise come what may. But the fact remains that the army welfare schemes have done far more than to look after their serving and retired personnel.

If things improve, then the Zakat Fund, Bait-ul-maal, EOBI and all other civilian funds including the on-going Benazir Income Support Programme must be put to work on the army's welfare funds/schemes model in order to make them business generating schemes. For this, they have to be given in the hands of professionals rather than politicians. Their unimaginative political heads must be replaced with young, imaginative, talented and proven professionals as their heads with just one task -- that of developing a corporate base for these funds so that they too, like their military counterparts, bring about investment in businesses of sorts that would, subsequently, generate millions of jobs as well as commercial activity.

The revenues earned and donations received will then become a steady reason for further growth. Distributing small amounts to individuals adding up to billions of dollars will never achieve anything. The huge funds must now be used to develop a corporate base planned to sustain itself and grow steadily. Welfare projects/schemes will follow as a natural corollary.

The writer is a former director-general of the Intelligence Bureau and former vice-president of the PPP Parliamentarians. Email: masoodsharifkhattak@gmail.com and www.sharifpost.com

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