From war rooms to boardrooms

Some degree of militarisation of society is usually an inevitable outcome of war. The military looms large in the minds of people at times of conflict and commands a disproportionate amount of resources and attention as it sets about accomplishing its mission. However, once conflict is over, the military usually returns to barracks and demobilisation takes place. The fact that this has not happened in Sri Lanka and that the military’s influence is spreading is causing concern not only among civil society but among the private sector as well.
The government maintains it is better to keep the military manpower and assets gainfully employed and occupied in ‘nation building’ efforts instead of en masse demobilisation that could have adverse social consequences. While this rationale certainly is valid, the growing involvement of the military in business makes captains of industry worry that they face competition from captains of a different sort. The army is building and running hotels, the air force is promoting its ‘Helitours’ transport wing and the navy its whale-watching excursions.
The military played an important role in supporting civil society during war-time. For example, when the land route to Jaffna was cut, the navy provided vessels and escorts to transport civilians to Jaffna. Likewise, the air force maintained an air bridge. In peacetime, having hotels for R&R purposes for military personnel and selling extra rooms to tourists might be alright, as would some limited, relatively low-cost sight-seeing tours.
But too much involvement by the military in business might not be good for business – the military’s own core business of waging war and private sector business. The top brass would do well to resist any temptation to extend their fledgling mercantile missions and get seriously into big business, as has been done in other countries where the military exerts a disproportionate influence over civil life. The danger is that such military involvement in business can create all sorts of complications and negative consequences for society, distort the workings of a market economy and create a bad image. This is what happened in countries like Pakistan, Indonesia and Burma.
At a time when the country is trying to woo foreign investors and visitors, a bad image can be bad for business. It could deter foreign investment. The country wants to attract serious foreign investors who would come for the long term – not those who come merely to take advantage of trade concessions like the apparel exporters who left after the loss of the GSP Plus duty free access to European markets.
The Economist magazine highlighted the military’s growing business interests in an opinion piece in late March that mentioned the army’s hotel brand, Laya, the navy tourist resort on Sober Island in Trincomalee, and the air force’s helicopter tours and beauty salon, ‘Airforce Clippers’ in Colombo. In a previous story headlined ‘Khaki capitalism’ whose tone was not too favourable, the magazine lumped Sri Lanka together with other countries like Egypt, Iran, Pakistan, Thailand, Indonesia and China where the military runs multi-million dollar business empires.
The Egyptian army, for example, is believed to command about 10% of the economy, with military-backed companies making cement, olive oil and household appliances as well as arms. They even provide such services as pest control, catering and child care. In Pakistan, according to Ayesha Siddiqa, the author of ‘Military Inc: Inside Pakistan’s Military Economy’, the army controls a $15 billion empire, with hundreds of companies producing a range of products, from fertiliser to breakfast cereals. In fact, two groups connected with the military – The Fauji Foundation and the Army Welfare Trust – are considered the largest business conglomerates in Pakistan. China’s People’s Liberation Army long had many commercial interests ranging from food production to transport and mining.
However, some countries like Thailand and Indonesia have recently begun to roll back their military’s involvement in business given the distortions such activity can cause in the economy as the private sector cannot compete fairly against businesses that have access to cheap labour and real estate and assets funded by tax payers.
It is the responsibility of the state to look after those who have spent their lives defending it. One way could be to run businesses to fund welfare organisations looking after retired or handicapped military personnel and their families. But military-run businesses that actively compete with the private sector could interfere with the operations of a market economy and undermine the profitability of normal businesses.
One need not agree with the Economist’s opinion nor heed its advice but it could be unwise to ignore or dismiss such warning signals. The magazine has considerable credibility among global investors, the kind of people the country is trying hard to attract. Its opinion could influence their decision-making. The country already gets bad press, its victory over terrorism notwithstanding, given persistent allegations of human rights abuses in the closing stages of the counter-insurgency campaign in 2009.
A victorious military does have skills to sell. The Sri Lankan military’s successful campaign against the Tamil Tigers has not gone unnoticed in defence academies, barracks and officer messes around the world. Many of these forces are grappling with their own anti-terrorism or counter-insurgency concerns. Although Western forces have got some recent war-fighting experience in Iraq and Afghanistan, only the Sri Lankan navy has modern experience at sea and that too against the kind of threat that remains relevant given the current deployment of international navies against Somali pirates and the threat they pose to world trade. The military, especially its special forces, has skills and experiences that foreign armies and navies would like to learn from. The Sri Lankan defence establishment has opened up its academies to foreign military officers. A few joint exercises have been conducted with forces from countries like the United States and India. Other nations like Pakistan, Bangladesh and the Maldives have sent military teams or observers to observe such exercises. Sri Lankan officers going abroad on training courses and exercises report their foreign counterparts are eager to learn from their experiences.
The navy has considered production and export of its locally-made small, fast patrol boats used to fight the Sea Tigers. Naval personnel have considerable seagoing experience, including several successful deep-sea missions with makeshift naval task forces – skills useful in a merchant marine facing seafarer shortages. Sri Lankan ex-servicemen have not only served for private contractors operating in Iraq and Afghanistan for some time now, both officially and unofficially, but are also now working as sea marshals protecting merchant ships against pirates on the trade route off Somalia.
Military strategy has long been studied by corporate management for the nuggets of wisdom it could provide in fighting battles in the marketplace and in leadership training and motivation. The conflict has created a military with useful skills that the private sector could well use – and are indeed using – judging by the employment of retired military officers by the corporate sector.
Such ex-servicemen are trained and experienced in delivering results with less than adequate resources – a situation not unfamiliar to companies facing increased uncertainty and competition. The military has a large pool of trained and experienced officers who could work in private sector companies in roles involving logistics and personnel management, as many have already done so. Logistics is an industry that could well use such ex-servicemen given the sector’s existing skills shortages and the country building two billion-dollar deep-water ports and an international airport with the aim of becoming a transport hub for the region.
Rather than building businesses, a victorious military would do much better by sticking to what it’s good at – waging war – and sharing its skills and experience in a way the private sector and civil society can profit from.