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...bureaucracies public enterprises riddled corruption, inefficiencies, rent seeking, and nepotistic practices designed bolster loyalty. The political imperatives of regime coalition management and survival took precedence over economic rationality, resulting in disastrous policies that failed to promote development. Trapped within a context of economic crisis, dwindling strategic rents in the post-Cold War era, and powerful networks of international neo-liberal lending institutions (e.g., IMF), many statist regimes have turned to economic liberalization and reform in an effort to stave off deepening economic collapse.
These reform efforts, however, often threaten the social contract that sustains regime coalitions. In non-democratic systems in particular, market distortions are frequently used to promote political support among key social and economic actors. Patronage is channeled through targeted subsidies, investment opportunities, public employment, currency manipulation, and other interventionist policies. Economic liberalization weakens the politicization of the economy by eliminating some of these distortions through privatization and structural adjustment. As a result, while economic reform is necessary to generate resources for coalition maintenance, regimes face considerable political costs since the changes directly threaten the interests of pro-regime forces, who may consider defection (Nelson 1989, 1990; Haggard and Kaufman 1992).
In many countries, the regime's political survival in the midst of economic reform is contingent upon the support of a seldom-recognized economic actor: the military. Militaries throughout the world have substantial stakes in the economy and as a result are important actors to consider. In Central America, for example, particularly Honduras and El Salvador, the military or its pension fund owns banks, insurance companies, telephone companies, shrimp businesses, hotels, and palm oil farms (Brenes and Casas 1998). In the Ukraine, the military charges wealthy customers to operate its equipment and weapons in what amounts to "military tourism" (Shields 2001). Through a complex web of charity organizations, foundations, holding companies, cooperatives, and criminal enterprises, the military in Indonesia operates business networks, in many cases creating self-financing territorial units in the provinces, districts, and sub-districts (McCulloch 2000). In 1990, the People's Army of Vietnam (PAVN) was given formal permission to participate in commercial activities. It now operates about 200 firms and is involved in 60 joint ventures. Business operations include clothing, manufacturing, air services, commercial fishing, and banking (Thayer 2000). And the Pakistani military has created a business empire through major foundations formed to protect the welfare of military personnel and their families (Siddiqa-Agha 2000).
Military economic activities in non-democratic systems are not always institutional in nature. In a number of cases, senior military officers use their positions in the regime or relationships with decision makers to generate personal wealth. In Nigeria after the Indigenization Decree of 1972, which transferred control of multinational companies to local owners, military officers gained control of businesses through various fronts. Others generated personal income through key positions in procurement chains, boards of directors, government agencies charged with overseeing commercial activities, and financial/banking institutions. Prominent generals developed considerable business interests in shipping, oil, and the financial sector. Despite recent reforms, restructuring, and purges, the involvement of military officers in the economy remains entrenched in Nigeria (Fayemi 2000).
The end of the Cold War, in particular, was an important development that dramatically affected the role of the armed forces vis-a-vis the economy. Traditional security and defense issues became less important while issues related to socioeconomic development and economic reform climbed to the top of governmental agendas. As a result, armed forces faced severe budgetary shortfalls and cutbacks in personnel as governments redirected resources into non-military activities to support economic reform programs. In other cases, such as Vietnam and Cuba, military budgets experienced a dramatic shortfall as a result of the collapse of the Soviet Union and the end of subsidies and other important military assistance programs. Consequently, many armed forces shifted roles and began to participate in agriculture and other limited forms of economic subsistence operations to compensate for lost budgetary allocations and to support the welfare of serving and retired military personnel. Militaries with a history of involvement in economic and development activities, such as China, Cuba, Indonesia, Thailand, and Vietnam, have been pushed by their governments to become more commercially minded as they cope with dwindling defense budgets. In the aftermath of the Cold War, when many non-democratic regimes faced internal and external pressures, the military's participation in commercial activities became part of the regime's survival strategy to "purchase" military support as it sought to either overcome a crisis or implement a series of politically dangerous economic reforms. A number of these armies have built up deeply entrenched commercial interests in key sectors of the economy such as tourism, telecommunications, banking, and transportation, making them influential economic actors. Obvious pathologies have emerged as a result of this military entrepreneurialism (for instance, corruption and the breakdown of professionalism, cohesion, and discipline).
Yet, despite this widespread involvement and the ramifications for civil-military relations, research has virtually ignored the economic role of the military. As Peter Lock (2000) laments, "given the scale of the pervasive involvement of the armed forces around the world, particularly of their higher ranks, in economic activities outside what one would consider their ideal-type mandate, it is astounding how little systematically collected information is available" (p.2).
This study begins to address this lacuna by examining the involvement of the military in the economy during processes of economic reform and liberalization in non-democratic systems. We argue that the nature of this involvement is guided by regime survival strategies. Specifically, under dire economic conditions that necessitate liberalization measures, regimes will attempt to promote military loyalty and political survival by minimizing or offsetting the negative effects of economic reform while maximizing positive dividends. Although specific survival strategies differ according to context, strategies include fostering military controlled businesses to offset budgetary losses, harnessing the technical skills of the military to promote reform (thus giving the military a central stake in the success of the process), creating business opportunities for key officers to maintain loyalty, and using selective purges to ensure the ascendancy of pro-reform officers. Precise strategies depend upon the capacity of the military as well as its earlier role in economic activities. Strategic reversals or changes are possible where military involvement in the economy begins to threaten regime survival.
This paper examines China, Cuba, and Syria as comparative case studies to demonstrate the centrality of the "survival imperative" in shaping the dynamics of military involvement in the economy under conditions of economic liberalization and reform. Regimes in all three countries rely upon the support of the military for power, experienced a severe economic crisis that sparked some degree of liberalization and reform, and offered roles for the military in the economy. In each case, the regime attempted to shape the involvement of the military in the reform process to minimize potential opposition and maximize support for economic change. Given the geographic and cultural differences of the cases, these commonalities highlight the importance of regime survival calculations in decisions about how to address the economic interests of the military in the context of crisis and change.
The PLA of China: From Peasant Army to Bingshang
The predecessor of the People's Liberation Army (PEA), the Red Army, came into being with the Nanchang uprising on 1 August 1927. On the basis of Mao Zedong's theory of "people's war," this revolutionary army was to have both a political and social role. In addition to political-organizational work, the Red Army was used as an economic resource as well. Red Army soldiers participated in food production (i.e., raising crops and livestock) to supplement reserves and feed the local population. Likewise, since its establishment in 1949, the People's Liberation Army (PLA) has been assigned a number of social, political, and economic functions beyond its traditional mission of defending the Chinese Communist Revolution. In China, as in virtually all communist countries, the military plays a major political role. As a result, the Chinese leadership always considered the military's role as central to the regime's political and social campaigns deemed critical to the survival of the regime. During much of the Maoist period of revolutionary mobilization (1949 to 1976), when the regime, led by the Chinese Communist Party (CCP), relied on techniques of mass mobilization to purge real and imagined opponents of Mao Zedong, the military was often a leading socio-political actor helping the regime overcome the harmful economic and political effects of the Great Leap Forward and the Cultural Revolution. Though it was the CCP and not the PLA that possessed the power and capacity to provide guidance during the mobilization campaigns, the active participation of the PLA in non-military tasks, such as in production during the Great Leap Forward, for example, positioned the military as an ideological vanguard and its soldiers as model workers (Adelman 1980:168-169). Though the CCP was always the premier institution, predating the PLA and its predecessor, the Chinese leadership always turned to the military to implement and ensure the success of Beijing's political, social, or economic goals, particularly those considered vital to its survival.
The early 1980s, after Deng Xiaoping had consolidated political control and embarked on a massive process of modernization and economic reform with the help of the PLA, was not the first time that the Chinese military had been called upon to play an important supporting role. The PLA has owned and operated enterprises since the late 1920s, but the roots of the Chinese military's role as an influential economic actor can be traced back nearly two thousand years (Hsiao 1978). During imperial times, militaries were expected to be partially, if not fully, self-supporting in order to relieve the central government of the burden of defense spending. Moreover, the military's economic activities, particularly in the area of farming, had the added objective of helping peasants in distant regions feed themselves, which enhanced the prestige of the armed forces and central government. According to one analyst, the Imperial army's economic role was "an explicit model used by Mao and the Communist leadership to implement the PLA's enterprise system" (Bickford 1999: 37).
Much like before, the impetus for the development of the PLA's economic activities was self-sufficiency and the need to support isolated communist forces and sympathizers suffering from military attacks and attendant dire economic circumstances. Meeting the guerrilla army's needs was paramount. Units were often cut off from external supply sources for clothing, food, and other essentials and, therefore, had to rely on their own efforts to meet their basic needs. Mao was the leading advocate of the military's involvement in production activities; he "regarded self-sufficiency as not only an essential means of survival for the Red Army but also politically virtuous as the military would not be a burden on the civilian population" (Cheung 2001:17). In addition to this critical political goal was a related effort to gain the goodwill of the people and ensure their cooperation, without which the Red Army could not survive. It is also important to note that military production helped local economies by providing employment as well as critical goods and services to peasants. Mao used the military as an engine of growth; he pointed out that the PLA was "an impetus to the great production campaign of the people" (Cheung 2001:20). The Red Army's economic activities included running small industries, raising crops and livestock, and building factories, hospitals, and repair workshops to meet the needs of soldiers and their dependants as well as the local population. By the late 1940s, the Red Army had over five hundred military supply factories, managed over a thousand farms throughout the liberated areas, and owned hundreds of industrial and commercial operations (Selden 1995, chap. 6).
During the 1949 to 1978 period of revolutionary mobilization, the PLA's military economy was not only retained, but was also expanded and institutionalized. The principal goal remained self-sufficiency. By the early 1950s, some...
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