Risk Areas

3.8 Involvement in the country’s economy and politics

Explanation of risk area

Where the armed forces are significant participants in economic and political life of a country, they can distort both. With preferential access to state resources – from budgets to communications networks to transportation corridors – and an ability to secure incentives such as tax breaks or conscript labour, armed forces which turn to economic activity enjoy an unfair advantage over civilian actors. This causes two problems. One, the military is diverted from the primary task of providing security toward economic enterprises. Two, the armed forces can be tempted to influence political life in order to maintain their economic enterprises, and curtail political freedoms and human rights in the process.

This tends to be a strategic-level pathway with operational and tactical consequences for partnering, including lesser effectiveness of the armed forces, a complex web of interests and relationships between military, political and economic actors, and fraught civil-military relations.

Consequences for the mission

Uncertainty over HNDSF commitment to shared goals

Diversion of HNDSF attention and resources to non-security goals, diminishing the effectiveness of assistance

Denial of economic and political opportunities to the population, leading to growing frustration and, in the long term, possibly conflict

Use of donors’ political and in-kind support for economic and political gain

Reputational risks


External Link

The Officer's Republic: Egypt

Following the Arab Spring, the Egyptian military has used the period of political transition to strengthen its hold on the country’s economy. With access to conscript labour, cheap land and state subsidies, the armed forces have been running hotels, farms, chemical factories and food processing companies. At the same time, the armed forces intervened in political issues, curtailed human and political rights (especially of political opponents), and failed to provide security against growing ISIS influence. While security assistance, especially from the US, continues to be delivered, it does not appear to help make the armed forces more effective.

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External Link

Military misuse of civilian land: Pakistan

In Pakistan, the armed forces misused civilian land for commercial purposes such as housing. Army-affiliated charities and foundations such as the Fouji Foundation, Army Welfare Trust, Bahria Foundation, and Shaheen Foundation are registered as charities. With preferential access to state resources, the scale of Pakistani military’s impact on the country’s economy is unclear.

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Military involvement in natural resource exploitation

In countries such as Indonesia and the DRC, the armed forces play a significant role in the exploitation of natural resources: they provide security for mining operations and can support particular factions’ access to natural resource sites. This distorts the economy, dilutes their purpose, and can lead to violence as factions compete for access to resources.

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Indicators & Warnings

HNDSF protecting political factions

Exceptions from transparency and accountability requirements for armed forces in legislation or practice

Reports of HNDSF or high-ranking officers' ownership or management of commercial enterprises

Diminishing effectiveness of armed forces

Bloated and unaccountable defence budget

Fighting centred around resource-rich areas