The Oligarchs Who Ate Pakistan

From PIA and Steel Mills to banks, power, media, and land, how the same families captured everything

Pakistan is not simply mismanaged; it is being methodically harvested by a small, tightly connected elite that has turned the state into an extraction machine rather than a public trust. Over the past three decades, that machine has been refined to the point where its workings can be described with clinical precision. This investigation sets out to do exactly that: to move past the lazy language of “corruption” and show, in concrete institutional and financial detail, how a narrow oligarchy has captured the commanding heights of the economy and re‑engineered public institutions to serve private ends.

The starting point is an unusually blunt diagnosis from the International Monetary Fund in late 2025. In a 186‑page governance and corruption assessment, the Fund stopped speaking in euphemisms and put a number on what it calls “elite capture.” Pakistan, it concluded, could increase its output by roughly five to six and a half percent if it dismantled the privileges and policy distortions enjoyed by a small group of politically connected actors. Those actors include large business groups and enterprises owned by or affiliated with the state – a careful way of acknowledging the military’s sprawling commercial empire. This is not a slogan from a protest march; it is a quantified judgment buried in the paperwork of Pakistan’s twenty‑sixth IMF programme. For the first time, an official creditor has effectively endorsed what many Pakistani economists and journalists have argued for years: that the country’s central economic problem is not a lack of reform, but the way reform has been consistently bent to protect the interests of an entrenched elite.

From that macro vantage point, this piece moves to ground level. It asks what “elite capture” looks like when you follow it through particular institutions, starting with Pakistan International Airlines and Pakistan Steel Mills. In both cases, the story begins with a state enterprise that once worked: PIA as a regional flag carrier that trained Emirates and opened pioneering routes to China; Pakistan Steel Mills as a Soviet‑assisted complex outside Karachi that produced more than a million tonnes of steel a year in its better seasons. It then follows the same choreography of decline. First comes politicisation: boards and senior management packed with loyalists; unions turned into instruments of patronage; headcounts swollen far beyond commercial need. Next comes managed deterioration: capital expenditure postponed, maintenance deferred, basic inputs like gas throttled back, all while losses quietly accumulate. Then comes the crisis – a pilot licence scandal that prompts Europe to ban PIA’s planes, or a formal gas cut that sends Pakistan Steel Mills’ furnaces cold. Finally, the crippled institution is declared beyond salvage in public hands and either closed or sold off in the name of “reform.”

The PIA story shows this method at its sharpest. For years the airline was allowed to drift. Boards were politicised, unions were able to block change, aircraft were kept in service well beyond their economic life and safety culture steadily eroded. When the aviation minister stood up in parliament in 2020 and announced that roughly a third of the country’s pilots might hold suspect licences – before investigators had finished their work – the damage did not stop at embarrassment. European regulators barred PIA from their airspace. The UK and the United States followed. A struggling but still viable long‑haul carrier was suddenly locked out of its most profitable markets. The subsequent purge of pilots and staff over fake degrees and licences shredded what remained of the airline’s reputation.

By the mid‑2020s, PIA was carrying hundreds of billions of rupees in obligations, flying only a fraction of its nominal fleet, and facing forecasts of billions of dollars in further losses if nothing changed. At that point, privatisation could be framed not as a choice but as an inevitability – and, crucially, as a condition of continued IMF support. But the way the airline was prepared for sale reveals the underlying logic. PIA was split in two. On one side sat a new “operational” company: the planes, routes, staff, brand – essentially the real airline. On the other sat a holding company stuffed with legacy debt. The latter remained on the state’s shoulders. The former, now cosmetically de‑leveraged, was readied for auction.

In December 2025, that auction finally took place in Islamabad, live on television. Three consortia took part: one led by Lucky Cement, one by Airblue, and one by Arif Habib Group, a financial and industrial empire at the centre of Pakistan’s capital markets. The government had set a reference price for 75 percent of the airline. Lucky’s group pushed its offer to just below that mark. The winning bid, from the Arif Habib‑led consortium, came in at 135 billion rupees – marginally higher than its rival and comfortably over the floor. Headlines instantly declared that Pakistan had “sold PIA for Rs135 billion after competitive bidding.”

On the surface, that sounds like a success story: a loss‑making state‑owned dinosaur, privatised above its reference price through a transparent process, under the watchful eye of international lenders. Once you strip away the headline, the structure looks very different.

The 135 billion rupees is not, in any meaningful sense, the sale price. It is a headline transaction value that folds together two very different things. Only a small slice – about 10 billion rupees – is the equity cheque going to the federal government in exchange for 75 percent of PIA’s shares. That is the true sale price: the money the state actually receives for surrendering control. The remaining 125 billion rupees is a capital injection into PIA itself – funds the new owners are committing to put into their own subsidiary to renew the fleet, finance operations and clean up the operational balance sheet. Once they own the company, that money belongs to them; it raises the value of their asset, not the seller’s coffers. In any mature market, these two components would be clearly separated: “X paid for the shares; Y committed as future investment.” In Pakistan, they have been amalgamated and presented to the public as if the entire 135 billion were a cheque to the treasury.

The split between the new PIA company and the legacy debt vehicle completes the picture. On one side of the wall sits an airline under new private control, largely freed of its old obligations and recapitalised with money that will show up as its own equity. On the other side sits a holding company carrying roughly half a trillion rupees in debt that the public remains ultimately responsible for. Whatever relief banks are forced to accept, whatever restructuring is agreed, the cost will be absorbed through taxes, inflation, higher borrowing costs and reduced social spending. The upside – any operational turnaround, any future profitability, any value in landing slots and brand – flows primarily to the new owners.

Pakistan Steel Mills follows the same script but ends in erasure rather than a sale. A 2006 attempt to privatise the complex at what workers and analysts described as a giveaway price was blocked by the Supreme Court. The bargain certain actors expected was interrupted. What followed was not a genuine turnaround effort but a deliberate grinding down. Gas pressure was lowered and then cut altogether; production slid from half capacity to zero; politically linked recruitment continued even as losses mounted. In 2024, the government formally decided to close the mill on the grounds that it was irredeemably loss‑making and no buyer could be enticed. Today, workers are gone, pensions and liabilities are being settled or litigated down, and serious discussions are under way about parcelling out portions of the land for new industrial and export projects. The institution is dead; the site’s advantages live on.

These two case studies anchor a broader argument about how power and wealth are organised in Pakistan. The article traces how a handful of families and military‑owned conglomerates dominate banking, deciding who gets credit and on what terms; energy, especially independent power producers locked into long‑term “take‑or‑pay” contracts that guarantee them capacity payments even when plants are idle; export sectors such as textiles, which give them leverage over scarce foreign exchange; and the media, which allows them to frame and defend each new round of “reform.” When the same surnames recur across banks, cement plants, sugar mills, power projects and, now, airline consortia, the issue is not individual success in a level playing field. It is the deliberate design of a market in which access and rules are skewed in favour of those already in possession.

That is why the IMF’s six‑and‑a‑half‑percent estimate matters. When external creditors and local researchers converge on a figure for how much of Pakistan’s potential output is siphoned off each year by privileged groups, they are not describing a few bad apples hidden in an otherwise healthy system. They are describing a system that works exactly as it is meant to. The old distinction between “public” and “private” is not especially helpful here. When military business groups sit near the top of wealth rankings and also benefit from skewed contracts and tax breaks, they are part of the oligarchy, not a counter to it.

If there is any lesson to draw from this evidence, it is the need to look past the choreography of reform. Televised auctions are designed to project openness and competition, but when capital requirements, regulatory discretion and political signalling have already narrowed the field to a handful of entrenched players, broadcasting the final half‑hour of bidding is theatre, not transformation. Buzzwords like “efficiency,” “public‑private partnership” and “largest transaction in history” play the same role. They dress an old story in new clothes, concealing the fact that the main beneficiaries remain the same groups that helped drive PIA and Pakistan Steel Mills into the ground.

The question that hangs over the rest of this investigation is whether any of this can change without a fundamental shift in the balance of power. The last three decades do not give much reason for optimism. Pakistan has gone to the IMF more than two dozen times. Each programme has promised consolidation and reform; none has demanded the one kind of change that would really threaten elite capture: serious taxation of wealth and economic rents, full civilian oversight and taxation of military business, and deliberate efforts to break up concentrated power in banking, energy and media. Instead, the toughest measures have consistently fallen on those least able to bear them – cuts in development spending, higher sales taxes, steep rises in fuel and electricity prices – while capacity payments to power producers and forbearance for large borrowers continue largely undisturbed.

No one should pretend there are easy fixes. But clarity has value of its own. To recognise that Pakistan’s core problem is oligarchy, not generic “corruption,” is to stop imagining that a change of faces or another anti‑graft drive will fix it. To see PIA’s privatisation and the closure of Pakistan Steel Mills as iterations of the same playbook is to become less susceptible to the claim that “there was no alternative” each time a public asset is scrapped or sold. And to understand that international institutions, however technocratic their language, have repeatedly blessed restructurings that entrench elite control is to demand a different kind of conditionality – one that asks not only whether the books balance this year, but whether the mechanisms of capture are finally being dismantled.

Ultimately, this is not just an economic story but a civic one. It asks whether the tens of millions of Pakistanis living in or near poverty are to remain, in effect, revenue streams servicing a small creditor class at home and abroad, or whether they might one day become citizens of a republic that treats their welfare as the point of the system rather than its raw material. That question will not be settled by an IMF staff report, a live‑streamed auction or another round of restructuring that leaves ownership patterns untouched. It will be settled only when those who currently design and profit from the system are forced, at last, to share or surrender real power. Until that happens, the destroy–devalue–acquire loop that runs through this investigation will keep spinning, and future historians will be able to reuse much of this narrative with little more than the names of the next sacrificed institutions edited in.

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THE CARTEL: Pakistan’s Oligarchy and the Systematic Destruction of a Nation

How Elite Families and the Military Have Engineered Three Decades of Decline Through Elite Capture and Institutional Sabotage

This investigation documents a systematic pattern of elite capture in Pakistan spanning 1995-2025, wherein approximately 10-15 business families, in coordination with military-controlled enterprises, have extracted an estimated 5-6.5% of GDP annually ($25-32 billion) through monopolistic control of key economic sectors. Through analysis of privatization records, corporate filings, government data, and international financial assessments, this study reveals a consistent operational pattern: political capture of state institutions, systematic sabotage leading to manufactured crises, and subsequent acquisition of devalued assets by connected elites. The Pakistan International Airlines case study demonstrates this mechanism in detail, a once-profitable airline systematically destroyed through political interference, union control, and deferred maintenance, now positioned for purchase by the same oligarchic families at approximately 10% of real asset value. With 31 families controlling 73% of stock market capitalization, 80% of banking assets concentrated in six entities, and military business operations generating Rs1.1+ trillion annually with zero taxation, Pakistan’s economy functions not as a market but as an extraction operation. The human cost: 40.5% poverty rate, $86.6 billion external debt, and accelerating brain drain as 800,000 citizens emigrated in 2024 alone.

I. INTRODUCTION: THE QUANTIFIED CRIME

While 40.5% of Pakistan’s 241 million people live below the poverty line, while 2.6 million more fell into destitution in 2024 alone, while mothers dilute milk to make it stretch and fathers skip meals so their children can eat—10 business families and the Pakistan Army have constructed the most sophisticated wealth extraction machine in South Asia.

An investigation spanning three decades of financial data, privatization records, corporate filings, and International Monetary Fund assessments reveals an inescapable truth: Pakistan’s economy is not a market. It is a cartel. And the same families have controlled it, uninterrupted, for 30 consecutive years.

1.1 The Scale of Extraction

In November 2025, the International Monetary Fund publicly confirmed what Pakistani economists had documented for decades: Pakistan loses between 5-6.5% of GDP annually to what they term “elite capture.” The United Nations Development Programme calculated the cost differently in 2021: $17.4 billion in annual elite privileges. The IMF’s 2025 Governance and Corruption Diagnostic Assessment went further, explicitly stating that “the capture of judicial institutions and the lack of accountability for corrupt practices fosters corruption” and that economic advantages given to elite groups including politicians and military officers account for approximately 6% of GDP annually.

Translate these euphemisms into reality: $25-32 billion stolen every single year, not lost to inefficiency, not wasted through incompetence, but systematically extracted through subsidies channeled to connected families, tax breaks for oligarchs, contracts awarded to the powerful, and the conversion of public resources into private fortunes.

The military’s business empire alone generates over Rs1.1 trillion ($3.9 billion) annually, with foreign analysts estimating the full scope at $50+ billion, representing 12.5% of Pakistan’s entire GDP. The Fauji Foundation merely the public face of military business operations ranks as Pakistan’s wealthiest entity at $5.9 billion on the 2025 Wealth Perception Index. Combined with family-controlled extraction mechanisms, nearly 0% of Pakistan’s economy flows not into productive investment, job creation, or public services, but into the accounts of fewer than 100 families and military-controlled enterprises.

1.2 The Structural Reality

This wealth concentration manifests in measurable market dominance:

• 31 families control 73% of the Pakistan Stock Exchange’s total market capitalization

• 80% of banking assets concentrated in six entities controlled by five families plus the military

• 60% of exports (textiles) dominated by four families

• 53% of electricity generation by Independent Power Producers receiving guaranteed payments regardless of actual power consumption

• The top 10% of Pakistan’s population controls 42% of national income

Yet simultaneously:

• 40.5% poverty rate affecting 94 million people

• $86.6 billion in external debt as of December 2024

• MF bailouts 25 times since 1950, with the 26th ($7 billion) currently in effect

• 800,000 citizens emigrated in 2024 accelerating brain drain

This investigation documents how this extreme concentration was achieved, maintained, and expanded over three decades through a consistent pattern: destroy, devalue, acquire.

II. Methodology and Historical Context

2.1 Research Approach

This study synthesizes data from:

• Pakistan Stock Exchange corporate filings and ownership disclosures

• Privatization Commission historical records (1991–2004)

• State Bank of Pakistan banking sector reports

• Central Power Purchasing Authority payment records

• Joint Investigation Team reports on corruption cases

• International Consortium of Investigative Journalists (ICIJ) Panama Papers database

• IMF, World Bank, and UNDP governance assessments

• Pakistan Institute of Development Economics (PIDE) studies

• Supreme Court of Pakistan judgments

• Parliamentary committee testimonies

• Corporate annual reports (2000–2025)### 2.2 The 1968 Baseline: Dr. Mahbub ul Haq’s “22 Families”

2.2 The 1968 Baseline: Dr. Mahbub ul Haq’s “22 Families”

In April 1968, Dr. Mahbub ul Haq, Chief Economist of Pakistan’s Planning Commission, delivered his seminal assessment: 22 industrial family groups controlled:

• 66% of industrial assets

• 80% of banking

• 79% of insurance

Professor Lawrence White’s concurrent USAID study found that 43 families controlled 98% of 197 non-financial companies, accounting for 53% of total national assets. The top four families alone—Saigols, Dawood, Adamjee, and Amin—controlled 20% of total assets.

Critically, Dr. Haq clarified these families were “a symptom, not a cause” of systemic problems, created by government policies: managing agencies, cartels, trusts, import licenses, tax concessions, subsidies, and representation on decision-making forums that distributed economic privileges. The 22 families had “virtually established a stranglehold on the system and were in a position to keep out any new entrepreneurs.”

2.3 The Nationalization–Privatization Cycle (1972–2004)

Phase I: Bhutto’s Nationalization (1972–1977)

Zulfikar Ali Bhutto’s Pakistan Peoples Party government launched Pakistan’s most aggressive wealth redistribution.

Industrial Nationalization (1972–1974):

• 31 key industrial units

• 13 banks (via Banks Nationalization Act, January 1, 1974)

• Over a dozen insurance companies

• 10 shipping companies

• Two petroleum companies

• Steel mills, textiles, cement absorbed into State Cement Corporation

Banking consolidation:

• Five major banks retained: Habib Bank Limited, Muslim Commercial Bank, United Bank Limited, Allied Bank, National Bank of Pakistan

• Other banks merged into these five

• Private ownership eliminated

Impact on elite families:

• Habib family: Lost HBL (founded 1941)

• Sharif family: Ittefaq Group nationalized

• Dawood family: Already weakened by losing 60% of business in Bangladesh independence (1971), further devastated

• Adamjee family: Lost insurance empire worth Rs3+ billion

Phase II: The Great Privatization (1990–2004)

The Rigged Foundation

Before examining privatization’s outcomes, the foundational context proves critical. In 2012, Pakistan’s Supreme Court ruled that the 1990 general election bringing Nawaz Sharif to power was “subjected to corruption and corrupt practices.” President Ghulam Ishaq Khan and ISI created an “Election Cell” distributing Rs140 million via Mehran Bank president Younus Habib to create the Islami Jamhoori Ittehad (IJI) coalition and prevent Benazir Bhutto’s PPP from winning. ISI chief General Asad Durrani and Army Chief General Aslam Baig directly coordinated the operation.

This illegitimate foundation matters because it reveals privatization was not market-driven reform but a military-backed project to restore wealth to traditional elites.

January 22, 1991: Privatization Commission established under Prime Minister Nawaz Sharif.

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Muslim Commercial Bank (MCB) — The Template

March/April 1991:

• Government sells 26% of MCB to National Group for Rs56 per share = Rs838.8 million ($15 million)

• Break-up value of MCB: Rs26.84 per share

• Buyer: 12-member National Group consortium led by Mian Mohammad Mansha (Nishat Group)

• Mansha’s bid was third-highest of five bidders

Why did third-highest bid win?

Farooq Leghari, Federal Finance Minister in 1993, told the Senate: “It did not happen by coincidence.” He explicitly stated National Group won “because of ties to Nawaz Sharif.”

Subsequent MCB acquisitions:

• February 19, 1992: Additional 25% public offering

• December 31, 1992: National Group acquires another 24% at Rs56.15/share, achieving 50% control

• 2008: Nishat Group sells 20% to Malaysia’s Maybank for $907 million—nearly matching the entire 1991 purchase price, providing massive liquidity for crisis-era acquisitions

Current status (2025):

• Nishat Group: Majority shareholder

• MCB Bank: Pakistan’s 4th largest bank by assets ($5.9 billion), largest by market capitalization ($1.8 billion)

• 1,081 branches, 4 million customers

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Cement Sector Privatization

DG Khan Cement

• Established 1986 by State Cement Corporation

• 1992: Privatized to Saigol Group for Rs1,799 million ($73.5M)

• Later transferred to Nishat Group in swap arrangement

• Current: Nishat Mills owns 31.40%

Maple Leaf Cement

• Founded 1956, nationalized 1974

• January 1992: Privatized to Nishat Mills for Rs486 million

• Later transferred to Saigol Group in exchange for DG Khan

• Saigol also acquired Pak Cement and White Cement Industries, merged into Maple Leaf

The Nishat–Saigol coordination reveals the coordinated nature of elite acquisition—close relatives dividing state assets through internal arrangements rather than competitive bidding.

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United Bank Limited (UBL)

• October 2002: Bestway Group (Sir Anwar Pervez) and Abu Dhabi Group acquire 51% for $210 million

• January 2011: Bestway invests additional $230 million

• Current: Bestway holds controlling stake

Bank AL Habib

• 1991: Habib family establishes Bank AL Habib—first new private bank approved under privatization policy

• Response to losing HBL to nationalization in 1974

• Current: 628+ branches, Rs750+ billion in assets

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2.4 The 1994 Power Policy: Creating Guaranteed Extraction

Pakistan’s 1994 “Policy Framework and Package of Incentives for Private Power Generation Projects” created the Independent Power Producer (IPP) system.

Key provisions:

• Guaranteed capacity payments: Power producers paid regardless of whether electricity is used

• Tariffs in U.S. dollars: Eliminating currency risk

• Take-or-pay contracts: WAPDA obligated to purchase agreed capacity

• Tax exemptions and fiscal incentives

• Sovereign guarantees: Government of Pakistan backs WAPDA obligations

Hub Power Company (HUBCO) — The Prototype

• First greenfield IPP in Pakistan

• Power Purchase Agreement: 6.1 cents/KWh in U.S. dollars

• June 1996: Begins selling power to WAPDA

• Key stakeholder: Dawood Hercules (Dawood family)

Current consequences:

• IPPs generate 53% of Pakistan’s power

• Rs7+ trillion circular debt accumulated

• IPPs receive payments even when electricity unneeded

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III. The Oligarchy: 10 Families That Control Pakistan

3.1 Tier One: The Mega-Conglomerates

3.1.1 Nishat Group — Mian Muhammad Mansha Family

Net worth trajectory:

• 2010: First Pakistani on Forbes billionaires list at $2.5 billion

• 2013: $4 billion

• 2023–2025: $5 billion

Historical ranking:

• 1970: Nishat ranked 15th among industrial families

• 1990: Ranked 6th

• 2010: #1—achieved through privatization acquisitions

Empire holdings:

• MCB Bank: Acquired 1991, now 4th largest bank, largest by market cap

• DG Khan Cement: Acquired through privatization

• Nishat Mills: Pakistan’s largest textile exporter, FY2025 revenue Rs178.2 billion ($621M)

• Nishat Power: IPP with guaranteed returns

• Adamjee Insurance: Acquired through hostile takeover

• Hyundai Nishat Motor: Automotive joint venture

• NexGen Auto: EV partnership with China’s Chery (2025)

• Emporium Mall: Lahore’s premier retail destination

• Nishat Hotels: Luxury hospitality portfolio

Quote (2008): “I estimate my fortune at about $4 billion… The world’s economic woes are making companies cheaper for people like me who have money to spend.”

3.1.2 Yunus Brothers Group (Tabba Family) — Lucky Cement

Market dominance: Lucky Cement controls 19.3% of Pakistan Stock Exchange total market capitalization—one family, one company, nearly one-fifth of national stock market value.

Financial performance:

• 2021: Revenue PKR 267.7B, Profit PKR 28.2B (consolidated)

• 2022: Revenue PKR 402.2B, Profit PKR 36.4B (consolidated)

• 2023: Revenue PKR 385.1B, Total assets PKR 608.4B (consolidated)

Leadership: Muhammad Ali Tabba (CEO since 2005, after father Yunus Tabba’s death in 2003)

Empire holdings:

• Lucky Cement: Pakistan’s largest cement producer

• Lucky One Mall: Pakistan’s largest shopping mall

• Lucky Textile Mills: Top 5 home textile exporter

• Gadoon Textile Mills: Major textile operations

• Lucky Motors Corporation: Kia automobile franchise

• Lucky Core Industries (formerly ICI Pakistan): chemicals, pharmaceuticals; acquired Pfizer manufacturing plant (May 2024)

• Lucky Electric Power Company: Energy generation

International operations: Lucky Cement operates significant facilities in Iraq, generating substantial foreign exchange earnings.

Circular debt beneficiary: Lucky Electric Power received Rs5.5 billion from the June 2023 circular debt settlement.

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3.1.3 Dawood Family — Dawood Hercules / Engro Holdings

Historical continuity: One of only four families from the original “22 families” (1968) still dominant in 2025.

Net worth estimates: $370M–$5.5B (varying assessments)

Corporate evolution:

• 1968: Dawood Hercules Chemicals founded as JV with Hercules Inc.

• 1997: Began equity investments in Engro Corporation, acquired 27% stake

• 2002: Increased Engro shareholding to 40%

• 2012: Acquired stake in Hub Power Company

• 2015: Sold fertilizer division to Fatima Fertilizer

• 2018: Sold HUBCO shares

• January 2025: Dawood Hercules renamed Engro Holdings, Engro Corporation becomes wholly-owned subsidiary

Current ownership structure:

• Dawood family and associates hold ~32.45% of Engro Holdings (~30% through corporate entities, ~2.45% individuals)

• Foreign companies hold ~48.1%

• Remainder with financial institutions and public

Empire holdings (through Engro Holdings):

• Engro Fertilizers: 35% of Pakistan’s fertilizer market

• Engro Energy: Power generation including Thar coal projects

• FrieslandCampina Engro Pakistan: Dairy products (40% stake)

• Hub Power Company: Historical major holding

Circular debt beneficiary: Engro Powergen received Rs1 billion, and Engro Thar received Rs4.31 billion from the June 2023 settlement.

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3.1.4 Habib Family — House of Habib

Historical legacy: Founded 1841 in Bombay—184 years of continuous business operations.

Historical significance:

• 1941: Founded Habib Bank Limited

• 1947: Moved to Pakistan at Muhammad Ali Jinnah’s request

• 1947: When India refused to release Pakistan’s Rs900M share of reserves, Mohammad Ali Habib wrote a blank check to Jinnah, who filled in Rs80 million to fund the new nation

• 1974: HBL nationalized, family loses control

• 1991: Bank AL Habib established—first new private bank under privatization

• 2004: HBL privatized to Aga Khan Fund (51%), family’s permanent control lost

Current net worth: $800 million

Current holdings:

• Bank AL Habib: 628+ branches, Rs750+ billion assets; operations in Bahrain, Malaysia, Seychelles; representative offices in Dubai, Istanbul, Beijing

• Toyota Indus Motor Company: Joint venture, Rs152.5 billion revenue (2024)

• 300-acre gated city in Lahore: Real estate development

Leadership: Abbas D. Habib (Chairman, appointed November 2016), Ali Raza D. Habib (Director)

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3.1.5 Bestway Group — Sir Anwar Pervez

Wealth trajectory:

• 1963: Opened first convenience store in London

• 1976: Founded Bestway wholesale operation

• 2002: Acquired United Bank Limited for $210 million

• 2011: Invested additional $230 million in UBL

• 2020: Net worth $3.1 billion

Journey: Arrived in the UK in 1956 at age 21, initially worked as a bus conductor earning £16–18 per week.

Empire holdings:

• Bestway Wholesale: UK’s 2nd largest independent wholesaler

• United Bank Limited (UBL): Pakistan’s major bank, controlling stake

• Bestway Cement: Three plants in Pakistan (Hattar, Chakwal, Mustehkam), 4+ million tonnes capacity, $370 million investment

• Well Pharmacy: UK’s 3rd largest pharmacy chain (acquired for £620 million in 2014)

• Sainsbury’s: Minority stake (acquired 2023)

Business model: Build a UK retail empire, reinvest profits into Pakistan banking and cement, create a transnational wealth extraction system.

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3.1.6 Hashwani Family — Hashoo Group

Net worth: $1.1–$4.1 billion

Timeline:

• 1970s: Largest cotton trading company, nationalized 1973

• 1985: Acquired Pakistan Services Ltd (Pearl-Continental Hotels)

• 1990s: Converted hotels to Marriott franchise (Islamabad, Karachi)

• 2025: 18 Hotel One budget hotels, expanding 8–9 annually

Current holdings:

• Marriott Hotels: Islamabad, Karachi

• Pearl-Continental Hotels: Four five-star properties

• Hotel One: 18 hotels, rapid expansion

• Prime commercial real estate: Islamabad’s most expensive square mile

• Gulf region hotel franchises: Dollar-denominated revenue streams

Strategic asset: Control of where presidents, premiers, and diplomats stay provides unmatched political access and intelligence gathering.

Leadership: Sadruddin Hashwani (founder), Murtaza Hashwani (current operations)

3.2.2 Zardari Family — Omni Group

Estimated net worth: $2–$5.2 billion

Political power: Asif Ali Zardari (current President; former President 2008–2013)

Timeline of acquisition (2008–2013):

During Zardari’s presidency and PPP control of Sindh province, systematic state-enterprise acquisition occurred.

Sugar mills acquired (all at 10–20% of market value):

• Naudero Sugar Mills: Acquired for Rs68M (market value Rs142.89M) — 52% discount

• Thatta Sugar Mills: Acquired for Rs127.5M (market value Rs716.11M) — 82% discount

• Dadu Sugar Mills: Acquired for Rs90M (market value Rs626.70M) — 86% discount

• Thatta Cement Factory: Acquired for Rs135M

Total: 16+ sugar mills across Sindh

Subsidies captured (2008–2013):

• Rs7.19 billion total from Sindh government

• Rs3.72B (97% of available funds) for “sick unit revival”

• Rs1.58B (68%) for captive power subsidies

• Rs1.05B (51%) for tractor schemes

Criminal pattern:

Sindh government starved state mills of funds → declared them “sick units” → sold them to Omni Group at 10–20% of market value → immediately provided massive subsidies to the now-private mills.

Investigation findings:

The Federal Investigation Agency discovered Rs11 billion worth of sugar that simply “disappeared” from Omni Group warehouses supposedly under government monitoring.

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3.2.3 Malik Riaz — Bahria Town

Estimated net worth: $1.5–$2+ billion

Holdings:

• Bahria Town: Asia’s largest private real-estate developer

  • Karachi (largest project)

  • Lahore

  • Islamabad/Rawalpindi

  • Peshawar, Multan

• Grand Jamia Mosques:

  • Lahore (world’s third-largest mosque)

  • Karachi

  • Islamabad

• Bahria Sports City: Karachi stadium and sports facilities

Controversies:

National Accountability Bureau froze 450+ properties nationwide, alleging illegal occupation of government and private land in Karachi, Rawalpindi, New Murree, and fraud amounting to billions of rupees.

August 2025:

NAB auctioned six Bahria Town properties for Rs2.27 billion in recovery proceedings related to the £190 million Al-Qadir Trust case.

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3.2.4 Jahangir Khan Tareen — JDW Sugar

Estimated net worth: $400+ million

Timeline:

• 1992: Founded JDW Sugar Mills

• 2005–2019: Acquired Gulf and Imperial sugar mills

• Consolidated 20% of Pakistan’s sugar market

Holdings:

• JDW Sugar Mills: Three units; Pakistan’s largest producer

• 30,000 acres of sugarcane plantations

• 53 MW bagasse-based power generation (two facilities)

2019 scandal:

Despite warnings of poor crop yields, the Punjab government approved Rs3 billion in export subsidies. Sugar was exported at subsidized rates, creating artificial domestic shortages and driving prices up 30–40%. Mill owners profited twice: subsidized exports and inflated domestic sales.

2024:

JDW Sugar Mills received the highest export quota from the Punjab government—10,783 tonnes out of 96,000 total.

Political leverage:

Close PTI leader and associate of Imran Khan. Briefly arrested in 2021 on sugar and money-laundering charges; all charges were later quietly dropped.

3.3 Tier Three: Diversified Industrial Groups

3.3.1 Lakson Group — Lakhani Family

Estimated assets: $1+ billion

Chairman: Iqbal Ali Lakhani

Core holdings:

• Century Paper & Board Mills: Packaging manufacturing

• Colgate-Palmolive Pakistan: FMCG (listed)

• Express Media Group:

  • Express News (leading Urdu news channel)

  • Express Tribune (English daily)

  • Express digital platforms

• McDonald’s Pakistan: Franchise operations

• Cybernet: Internet service provider

• Tapal Tea: Major national tea brand

• Insurance and packaging businesses

Major exit:

Sold tobacco business to Philip Morris for $340 million (2007).

Media power:

Among Pakistan’s top eight media owners controlling 68% of total audience share, Express Group ranks third—providing significant narrative control.

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3.3.2 Packages Group — Syed Babar Ali

Estimated net worth: $600 million

Founded: 1956

Holdings:

• Packages Limited: Pakistan’s largest paper and board mill

• Nestlé Pakistan: Founded as Milkpak Limited

• Tetra Pak Pakistan: Packaging technology

• IGI Insurance: Financial services

• Tri-Pack Films: Packaging materials

• Coca-Cola Beverages Pakistan: Joint venture

• Siemens Pakistan: Joint venture

• Sanofi-Aventis Pakistan: Pharmaceutical joint venture (Chairman)

Institutional legacy:

Founded Lahore University of Management Sciences (LUMS) in 1985—now Pakistan’s premier business school.

Operating philosophy:

Joint-venture model: global partners provide technology and management, while local elites retain ownership and control.

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3.3.3 Saigol Family — Kohinoor Maple Leaf Group

Estimated net worth: $850M–$1.2B

Current leader: Tariq Sayeed Saigol

Historical status: One of the original “22 families” of the 1960s.

Holdings:

• Kohinoor Textile Mills: Large-scale yarn, fabric, and home-textile exports

• Maple Leaf Cement:

  • 5th largest grey cement producer (8% market share)

  • 90% control of white cement market

• Independent power generation plants

• Kala Shah Kaku Chemical Complex: Integrated industrial facility

Assets: Approx. Rs50 billion

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3.3.4 Saifullah Family

Estimated net worth: $330–$450 million

Key figure: Anwar Saifullah Khan

Holdings:

• Saif Energy: Power generation

• Saif Telecom: Telecommunications

• Mining operations: Resource extraction in Khyber Pakhtunkhwa

• Fertilizer businesses

Political access:

Leveraged PPP-era deregulation in the 1990s to secure telecom and energy advantages.

Circular debt beneficiary:

Saif Power received Rs2.25 billion from the June 2023 settlement.

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3.3.5 Specialized Textile Groups

Sapphire Group:

• Founded 1969 by Mian Mohammad Abdullah

• Vertically integrated: 99,024 spindles, 300+ machines

• Sapphire Retail: 50+ stores nationwide

• Circular debt beneficiary: Sapphire Electric received Rs2.5 billion (June 2023)

Gul Ahmed Group:

• Founded 1953

• Capacity: 130,000 spindles, 300 weaving machines

• “Ideas by Gul Ahmed”: 40+ retail outlets

• Global exports to Fortune 500 retailers

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3.4 The Military: Pakistan’s Largest Economic Entity

3.4.1 Fauji Foundation and the Military Business Empire

Official valuation: $5.9 billion (Pakistan Wealth Perception Index 2025)

Estimated real scale: $50+ billion — 12.5% of GDP

Annual revenue: Over Rs1.1 trillion ($3.9 billion), exceeding Pakistan’s entire federal development budget.

Core holdings:

• Mari Petroleum: Supplies over 22% of Pakistan’s natural gas

• Fauji Fertilizer Company: Controls nearly 80% of fertilizer market

• Fauji Cement: Third-largest cement manufacturer

  • Merged with Askari Cement (Army Welfare Trust) in 2021

• Askari Bank and Askari Insurance

• Fauji Foods

• Foundation Power and Fauji Kabirwala Power (IPPs)

Circular debt beneficiaries (June 2023):

• Foundation Power: Rs2.5 billion

• Fauji Kabirwala: Rs500 million

Defence Housing Authority (DHA):

• Prime real estate developments nationwide

• Operates on state land with minimal civilian oversight

• Generates billions in revenue

Legal structure:

Registered under the Charitable Endowments Act of 1889; initial capital of $3.6 million provided by British colonial authorities for WWII veterans.

Governance:

Boards staffed by serving and retired generals; minimal disclosure; no effective civilian audit.

Land control:

Independent estimates suggest the Army controls 10–12% of Pakistan’s total land area.

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IV. The Mechanisms of Extraction

4.1 Banking Control: The Foundation of Oligarchic Power

Current structure:

Over 80% of bank assets are privately controlled by six entities:

1. MCB Bank — Nishat Group (acquired 1991)

2. United Bank Limited — Bestway Group (acquired 2002)

3. Bank AL Habib — Habib family (established 1991)

4. HBL — Aga Khan Fund (51%, privatized 2004)

5. Allied Bank — Ibrahim Group

6. Askari Bank — Military/Fauji Foundation

Mechanism of control:

• Who receives business loans

• Mortgage access for real estate

• Which industries expand

• Who can raise capital

Outcome:

Entrepreneurship without elite connections is structurally impossible. Pakistan’s absence of a genuine startup ecosystem is not accidental—it is engineered.

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4.2 The IPP Racket: Guaranteed Extraction Through Power

Pakistan’s 1994 Power Policy institutionalized “take-or-pay” contracts.

Current scale:

• 53% of electricity generated by IPPs

• Rs7+ trillion circular debt

• Payments guaranteed regardless of demand

June 2023 settlement:

CPPA paid Rs142 billion to IPPs in one tranche.

Major beneficiaries (selected):

• China Power Hub: Rs9.21B

• Lucky Electric (Tabba): Rs5.5B

• Engro Thar (Dawood): Rs4.31B

• Nishat Power + Nishat Chunian: Rs3.6B

• Sapphire Electric: Rs2.5B

• Foundation Power (Military): Rs2.5B

• Saif Power: Rs2.25B

System reality:

Pakistan has surplus electricity. The power is not needed. The payments are mandatory.

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4.3 Textile Export Monopoly: Control of Foreign Exchange

Annual exports: $25 billion

Textile share: $14.2 billion (60%)

Dominant families:

• Nishat (Mansha)

• Lucky Textile (Tabba)

• Sapphire Group

• Gul Ahmed

Strategic leverage: These groups earn dollars and decide when to repatriate them. Monetary policy, exchange-rate stability, and reserve accumulation all depend on their cooperation.

Systemic leverage: Government cannot devalue rupee without their permission. Cannot implement independent monetary policy without their cooperation. Cannot build forex reserves without their dollar inflows.

4.4 Cement Cartel: Construction Infrastructure Control

Six families + military control Pakistan’s entire cement industry:

• Lucky Cement (Tabba): Largest producer

• DG Khan Cement (Mansha/Nishat): Major player

• Maple Leaf Cement (Saigol): 90% white cement market share

• Bestway Cement (Anwar Pervez): 4M+ tonnes capacity

• Cherat Cement: Ghulam Faruque Group

• Fauji Cement (Military): Third largest

Economic control:

Every construction project—CPEC infrastructure, housing developments, commercial real estate, government buildings—must purchase cement from these six entities. This creates absolute control over the physical construction of Pakistan’s infrastructure.

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4.5 Sugar Sector: Political Families and Food Security

Three political families dominate sugar production:

• JDW Sugar (Tareen): 20% market share

• Omni Group (Zardari): 16 mills across Sindh

• Sharif family: Chaudhry Sugar Mills, Ramzan Sugar Mills

The manipulation mechanism

2019 scandal detailed:

• Despite warnings of poor crop yields, Punjab government approved Rs3 billion in export subsidies

• Sugar exported at subsidized rates, creating artificial domestic shortage

• Domestic prices rose 30–40%

• Mill owners profited twice: from subsidized exports and inflated domestic sales

IMF’s explicit condemnation (2025):

“Many of whom hold government positions, have ensured highly ‘recommended’ prices for sugarcane and protective tariffs, keeping their operations profitable at the expense of competitiveness… a government decision allowed significant sugar exports, even subsidizing them, which created domestic shortages and price spikes for consumers.”

Subsidy capture:

Historical analysis shows JDW Sugar Mills received 29% of all sugar subsidies ever distributed, while Omni Group captured 97% of Sindh’s ‘sick unit revival’ funds totaling Rs3.72 billion.

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4.6 Media Control: Narrative Capture

Eight families control 68% of media audience share:

1. Jang Media Group (Mir Shakeel-ur-Rahman)

   • Daily Jang (Urdu newspaper, largest circulation)

   • The News International (English daily)

   • Geo TV Network (Geo News, Geo Entertainment, Geo Super)

   • Controls over 33% of market among top 40 media entities

2. Express Media Group (Lakson/Lakhani family)

   • Express News

   • Express Tribune

   • Express (Urdu daily)

3. ARY Group

4. Government Group

   • Pakistan Television Corporation (PTV)

   • Pakistan Broadcasting Corporation (PBC)

   • FM 101 radio stations

5. Nawa-i-Waqt Group

6. Samaa Group

7. Dawn Group

8. Dunya Group

Conflict of interest:

Lakson Group ownership demonstrates the problem:

• Media: Express News, Express Tribune

• FMCG: Colgate-Palmolive Pakistan

• Food: McDonald’s Pakistan franchise

• Packaging: Century Paper & Board Mills

• Telecom: Cybernet ISP

Systemic consequence:

Media houses avoid critical coverage of their own business interests and those of allied political parties. Government advertising budgets become tools of influence, with independent outlets punished for critical reporting.

Result:

Real investigative journalism into elite extraction has been effectively eliminated. The public cannot make informed decisions without accurate information about oligarchic control.

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4.7 Stock Market Concentration

Pakistan Institute of Development Economics (PIDE) 2018 study revealed:

• 31 families control 73% of KSE-100 market capitalization (Rs4.963 trillion out of Rs6.8 trillion total)

• Government of Pakistan is the single largest shareholder

• Top 10 owners account for 37% of market capitalization

• High connectivity in boards of directors—small network serves multiple boards

Interlocking directorates:

• Kamal Chinoy: 17 companies

• Tariq Iqbal Khan: 17 companies

• Aamir Sherazie (Honda owner): 17 companies

• Qasier Javed: 17 companies

Implication:

Pakistan’s stock market does not reflect a competitive economy but an elite club structure where the same families and individuals control corporate Pakistan through interlocking directorates.

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V. Case Study: Pakistan International Airlines: The Destruction Blueprint

Pakistan International Airlines is the cleanest, most current example of how Pakistan’s ruling classes destroy a state asset, socialise the losses, and then privatise the upside to a small circle of insiders. The recent “Rs135 billion sale” is not an exception to the pattern; it is the culmination of it.

From Flagship to Fiscal Albatross

In the 1960s, PIA proved that a Pakistani state-owned enterprise could match or outclass global competitors. Under Air Commodore Malik Nur Khan and, later, Air Marshal Asghar Khan, the airline became profitable within a few years, acquired prestige assets abroad like the Roosevelt Hotel in New York and the Scribe in Paris, opened pioneering routes to China, and even trained the founding crews of Emirates. It marketed itself as “Great People to Fly With” and, for a time, lived up to the slogan.

The airline’s fall from this height was not the result of some inherent flaw in public ownership. It was the result of politics.

From the 1970s onward, successive governments turned PIA into a patronage machine. Board seats were gifted to loyalists; senior roles became rewards for political service. Unions, backed by parties, acquired the power to block restructuring. The workforce swelled far beyond what the route network and fleet could support. Aircraft were flown hard but not replaced on schedule; capital expenditure was repeatedly deferred, while salaries, perks and leaks multiplied.

By the 2010s, PIA was over-staffed, over-leveraged and under-invested. Yet the final plunge was triggered by an extraordinary act of self-harm.

In June 2020, Pakistan’s aviation minister told parliament that roughly 30 per cent of the country’s pilots might hold “dubious” licences before investigations had even concluded. European regulators reacted as any risk-averse bureaucracy would: the European Union Aviation Safety Agency banned PIA from its skies. The UK and US followed suit. Overnight, PIA lost access to its most lucrative long-haul markets.

The consequences were brutal. The airline, already bleeding, now faced the loss of high-yield routes plus the reputational damage of being perceived as unsafe. Internally, dozens of pilots and other staff were sacked over suspect licences and fake degrees. Externally, PIA’s ability to generate foreign exchange collapsed.

By 2020, its accumulated losses over the previous decade were measured in the billions of dollars; by the mid-2020s, its obligations were hovering around Rs742 billion, with barely half its nominal fleet regularly airworthy and a projected US$7.1 billion in losses through 2030 if nothing changed.

Seen in isolation, this story can be framed as a cautionary tale about state incompetence. But in the wider context of Pakistan’s political economy, it looks very much like the first act of a familiar script: weaken the asset through patronage and neglect; allow or trigger a crisis that makes continuation in public hands seem impossible; then call in “reform” in the form of privatisation.

How to Prepare a Prize for Auction

By the time Pakistan entered yet another IMF programme, the Fund and Islamabad’s own economic managers were aligned on one point: PIA, in its existing form, could not stay on the state’s books. The airline had become a convenient symbol of “bleeding SOEs” that had to be offloaded to restore fiscal health.

But turning PIA into something a private buyer would touch required more than rhetoric. The government quietly executed two crucial manoeuvres.

First, it split the airline in two.

On one side sat a cleaned-up “operational” company planes, routes, staff, brand essentially the going concern of PIA. On the other side sat a holding company burdened with what one analyst on X aptly called “all the bad debt (it’s about 500 billion +/-).” The latter would stay with the state. The former would be put on the block.

In effect, the taxpayer would retain responsibility for historic liabilities while a future buyer would acquire a de-leveraged airline.

Second, the state began to bite the bullets that had made earlier privatisation attempts politically toxic.

Voluntary separation schemes and restructuring plans were rolled out. Protests were managed. The government absorbed the political cost of job losses and rationalisation in advance, precisely so that a private buyer would not have to.

Strip away the slogans, and what happened is simple: the public paid to make PIA saleable.

By late 2025, the entity being offered to investors was no longer the bloated, debt-choked carrier of a few years earlier. It was a slimmed-down aviation company sitting on prime routes and brand equity, with a vast chunk of its historic debt conveniently parked elsewhere.

The Rs135 Billion Illusion

On 23 December 2025, in a much-publicised televised ceremony, the Privatisation Commission opened bidding for a 75 per cent stake in PIA.

Three consortia were in the running:

• One led by Lucky Cement

• One by Airblue

• One by Arif Habib Group

The government had set a reference price of Rs100 billion for that 75 per cent stake. In the final rounds, Lucky’s consortium reportedly went up to Rs134 billion. The winning bid came from the Arif Habib–led consortium at Rs135 billion—just one billion rupees above its rival, but safely over the floor.

Headlines duly appeared proclaiming: “PIA sold for Rs135 billion.”

On their face, those headlines allowed the state to claim success. The auction was competitive. The bid exceeded the reference valuation. An IMF-blessed state-owned dinosaur had been “successfully privatised” for a respectable figure.

But the structure of the deal, once unpacked, tells a very different story.

As multiple analysts have pointed out, including Waqas and others tracking the documents, the Rs135 billion is not a sale price in the conventional sense. It is a transaction headline value that folds together fundamentally different components.

In standard OECD or IMF practice, one would clearly separate:

• The equity purchase price (what the seller actually receives)

• Any capital expenditure or investment commitments the buyer undertakes after acquisition

Here, they have been mashed into a single number and presented to the public as if that entire amount is what Pakistan has been paid.

Once you distinguish those components, the picture becomes stark.

The equity cheque going to the Government of Pakistan is around Rs10 billion. That is the actual sale price in the narrow, legal sense: the amount the state is receiving in exchange for parting with 75 per cent of PIA’s ownership.

The remaining Rs125 billion is not money being paid to the state. It is capital injection into PIA itself—funds the buyer promises to put into its newly acquired subsidiary for fleet renewal, working capital and internal debt reduction.

As Waqas bluntly puts it: once the buyer owns the company, money invested into that company belongs to the buyer. It increases the enterprise value of their asset; it does not compensate the seller for past losses or foregone assets.

To count it as “sale proceeds” is conceptually wrong and, in a transaction of this political sensitivity, deeply misleading.

The structure goes further.

According to the model described by business outlets and summarised crisply by Grok, only 7.5 per cent of the Rs135 billion about Rs10 billion, or roughly US$35–36 million actually flows into the federal treasury as cash. The other 92.5 per cent about Rs125 billion stays within PIA as reinvestment and recapitalisation.

Payment is staggered, with two-thirds due within 90 days of acceptance and the rest within a year.

So when social media posts declare “Arif Habib buys Pakistan’s national airline for $35 million. What a scam,” they are not indulging in hyperbole. They are isolating the only portion of the transaction that behaves like a sale price: the money handed to the state in exchange for equity.

Relative to PIA’s history, its strategic value and the scale of public resources poured into it over decades, US$35 million is a rounding error.

Who Keeps the Debt, Who Gets the Upside

The real genius of the structure lies in the way risk and reward have been divided.

On one side of the split sits the holding company with roughly Rs500 billion of “bad debt”, still ultimately guaranteed by the state. As Faisal’s thread notes bluntly, that debt was supposed to be paid down partly by the sale of the operational company and partly by restructurings and pressure on banks.

Whatever mix of rescheduling, arm-twisting and accounting emerges, the liability will in practice be serviced by ordinary Pakistanis through taxes, inflation, higher borrowing costs or reduced social spending.

On the other side sits the operational PIA, now 75 per cent controlled by an Arif Habib–led consortium, cleansed of its worst liabilities, recipient of a Rs125 billion recapitalisation, and free to borrow against its cleaned-up balance sheet.

Any future profit flows primarily to the new owners. Any new debt taken on “no longer legally belongs to you,” as Faisal wryly puts it though he notes, pointedly, that this is a country “where they change the constitution more often than Zardari’s diapers.”

The buyer gets a cleaned-up airline and control over future cash flows. The public gets, at best, relief from ongoing operational losses and the promise that new owners will not repeat past abuse. It does not get anything approaching compensation for the value already destroyed.

What PIA Now Proves

PIA’s journey from Nur Khan’s flagship to a Rs10 billion equity cheque is not an argument against state ownership; it is an indictment of how a captured state chooses to behave.

As Waqas notes, it is false to claim SOEs cannot be efficient. Emirates, Qatar Airways, Etihad and Turkish Airlines are all state airlines. They work because their states insulate them from patronage, enforce professional management, and treat them as strategic assets rather than party-funding machines.

Pakistan once did the same. It chose to stop.

Once that choice had done its work once PIA had been soaked for jobs, contracts and political mileage it became possible to present privatisation as a regrettable necessity and to dress up a Rs10 billion sale as a Rs135 billion “success story.”

The pattern is clear:

1. Take a profitable or viable SOE.

2. Use it for political benefit, bleed it, drive it into the ground.

3. Split off the bad debt for taxpayers to carry and sell the cleaned-up core to your frontmen.

Then repeat.

The technicalities of the PIA deal the 7.5 per cent vs 92.5 per cent split, the holding-company debt, the staggered payments are not accounting details. They are the mechanism by which an entire society underwrites the risks of elite misrule while surrendering the remaining upside to the same small circle that engineered the collapse.

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VI. Case Study: Pakistan Steel Mills — The Prototype

6.1 The Dream (1973–1985)

1973: Prime Minister Zulfikar Ali Bhutto, working with PPP party theoretician J.A. Rahim, initiates Pakistan Steel Mills with Soviet technical assistance.

The scale:

• 1.29 million cubic meters of concrete

• 5.70 million cubic meters of earthworks

• 330,000 tonnes of heavy machinery and equipment

• Production capacity: 1.1–5.0 million tonnes annually

• Pakistan’s largest industrial mega-corporation

1985: Plant begins production under General Zia ul-Haq.

Late 1980s: Plant achieves profitability—Rs58 million profit in 1988–89.

Pakistan achieved heavy-industry capability for producing steel for construction, manufacturing, and defence. Industrial self-sufficiency became achievable.

6.2 The Sabotage (1990–2006)

1989–1992:

The Rs58 million “profit” was exposed as “financial jugglery” by Chairman Major General Shujaat Bokhari to “curry favour with the then new Benazir Bhutto Regime.”

Union takeover:

• Unions established “parallel administration” with ~100 offices across the plant

• Fully furnished with air conditioning, refrigerators, telecommunications

• Officers physically manhandled, humiliated, degraded

• “Protection money” (bhatta) collected from officers and workers

• Kickbacks extracted from doctors, medical services, contractors, suppliers

• “Chairman CBA overruled Chairman PSM”

Employment scandal:

• Overemployment through political interference

• Ghost workers added to payroll

• Employment beyond capacity became policy

• Each political party added loyalists

Financial drain:

• Continuous losses

• Corruption drained revenue

• By early 2000s: only 18% of capacity utilised

1992 intervention:

Army-led “Operation Clean Up” under Lt Gen Sabeeh Qamaruzzaman temporarily curbed union activity and reduced overtime, incentive, medical, and transport expenses. Political interference returned.

6.3 The First Privatization Attempt (2005–2006)

2005: Prime Minister Shaukat Aziz places PSM on privatization list.

2006: Consortium of Saudi, Russian, and Pakistani investors offers $362 million.

Analysts and unions called it a “throwaway price.” The sale was conducted in a non-transparent manner.

Supreme Court of Pakistan:

Reviewed the transaction and annulled the privatization.

6.4 The Revenge (2006–2015): Destroy What Can’t Be Stolen

Critical sequence:

Just two months after the Supreme Court ruling, the government appointed a new CEO and 11-member board—not to rehabilitate the mill but to oversee its dismantling.

Simultaneously, a Russian delegation visited Pakistan to discuss building a new steel plant on the same site.

Message: If PSM couldn’t be bought cheap, it would be destroyed.

2008–2015 death spiral:

• Cash-flow shortages manufactured

• Rs2.9 billion bailout (2008) under Yusuf Raza Gillani—just enough to keep it alive

• Production steadily declined

• Political appointments continued

• Unions blocked reform

• Maintenance halted

• Equipment deteriorated

2015: Government cut gas supply. Steel production stopped.

6.5 The End (2019–2023)

2019: Economic Coordination Committee decides to privatize.

July 4, 2023: Government announces permanent shutdown—“no available buyer due to heavy losses.”

2025: Russia and Pakistan negotiate new steel plant on same site.

6.6 The Pattern Repeats

• 1985–1990: PSM functions, profitable

• 1990–2006: Political interference and looting

• 2006: Fire-sale attempt blocked by Supreme Court

• 2006–2015: Institution systematically destroyed

• 2015: Gas cut, production halted

• 2023: Permanent closure

• 2025: New private steel plant negotiations

Pakistan lost:

• Heavy-industry capability

• Steel self-sufficiency

• Tens of thousands of jobs

• Billions in sunk investment

• Strategic industrial independence

The oligarchs gained:

• Removal of state competitor

• Cleared path for private steel

• Proof that resistance will be punished

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VII. The Human Cost

7.1 Poverty and Inequality

Poverty statistics:

• 40.5% poverty rate in 2024—94 million people

• 2.6 million fell below poverty line in 2024 alone

• Balochistan: 70% poverty despite richest natural resources

Wealth concentration:

• Top 10% control 42% of national income

• 94% of adults have wealth below Rs1.6 million ($10,000)

• Top 15 families hold $71+ billion

Gap:

While 40% live on less than $3.65/day, Mian Mansha’s wealth doubled from $2.5B (2010) to $5B (2025).

7.2 Debt Crisis

• External debt: $86.6 billion (December 2024)

• Power-sector circular debt: Rs7+ trillion ($25+ billion)

• IMF dependency: 25 bailouts since 1950; currently 26th ($7B)

• Debt service: $100B due over next four years; $18B this year

7.3 Brain Drain

• Emigration: 800,000 Pakistanis left in 2024

• Skilled workers fleeing: doctors, engineers, IT professionals, academics

Consequence:

Pakistan loses human capital investment; receiving countries gain skilled labour at zero cost.

7.4 Infrastructure Collapse

Electricity:

• Most expensive in region despite surplus

• Load-shedding persists while IPPs are paid

• Bills exceed 40% of middle-class income

Water:

• Karachi faces chronic shortages

• Groundwater depletion accelerating

Education:

• Lowest public spending in South Asia

• Literacy stagnant

• Quality deteriorating

Healthcare:

• Public system collapsing

• Health spending fraction of regional peers

• Military budget rose 20% to Rs2.55 trillion ($9B) in 2025

7.5 Economic Stagnation

• GDP growth: 2–3% average

• Exports: Fell from 16% of GDP (1990s) to 10.4% in 2024

• FDI: Minimal vs India, Bangladesh, Vietnam

• Competitiveness: Bottom quartile globally

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VIII. Why Reform Fails: The Oligarchy’s Perfect Defenses

8.1 Structural Impediments to Reform

Every attempted reform encounters the same objections:

• Banking reform: “You’re destabilizing the financial system!”

• IPP contract termination: “You’re breaking sovereign guarantees!”

• Monopoly breakup: “You’re anti-business!”

• Corruption investigation: “You’re politically motivated!”

The families have constructed perfect defenses through control of:

1. Banking — who gets capital for business expansion

2. Media — who gets heard in public discourse

3. Politics — who gets elected through campaign financing

4. Military relationships — who gets protected from accountability

5. International connections — who secures foreign capital and IMF support

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8.2 The Reform Paradox

Every IMF bailout requires “privatization.”

Every privatization transfers more assets to the same families.

Pattern documented:

• 1991: MCB to Mansha (connected to Nawaz Sharif)

• 1992: Cement plants to Nishat–Saigol families

• 2002: UBL to Bestway (Anwar Pervez)

• 2024–2025: PIA to Lucky Cement / Arif Habib consortiums

The families that destroyed PIA benefit from its sale.

The families that killed Pakistan Steel Mills will own its replacement.

“Reform” is their weapon.

Each crisis creates acquisition opportunities.

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8.3 Institutional Capture

Judiciary:

• IMF’s 2025 report explicitly noted “the capture of judicial institutions and the lack of accountability for corrupt practices fosters corruption”

• Panama Papers exposed Sharif family corruption; Supreme Court disqualified Nawaz Sharif in 2017

• Five years later: Sharif brothers back in power, effectively forgiven

• Supreme Court blocked PSM sale in 2006; the state responded by destroying PSM

Media:

• Eight families control 68% of audience share

• Lakson Group owns Express Media, making scrutiny of Lakhani family interests structurally impossible

• Government advertising budgets weaponized to punish critical outlets

Political parties:

• All major parties (PML-N, PPP, PTI) funded by the same business elite

• Mian Mansha aligned with Sharif family

• Malik Riaz funds all parties

• Zardari family controls Omni Group

• Party alternation changes nothing

Military:

• Any civilian government threatening elite interests faces removal

• Benazir Bhutto: dismissed twice

• Nawaz Sharif: dismissed twice, exiled, imprisoned, rehabilitated

• Imran Khan: removed and imprisoned

• Only constant: military power and elite wealth preservation

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8.4 International Enablers

IMF complicity:

• Pakistan bailed out 25 times since 1950

• Every bailout includes “reform conditions”

• Every reform fails because it threatens elite interests

• IMF loans anyway

Current program: $7 billion (26th bailout), requiring privatization—enabling transfer of PIA to the same oligarchs.

Pattern:

International institutions understand the system but enable it because:

1. Geopolitical stability requires a functional—not reformed—Pakistan

2. Nuclear weapons custody concerns override governance

3. Military cooperation trumps economic reform

4. Regional balance (India–Pakistan–China) demands the status quo

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IX. Conclusions and Implications

9.1 Core Findings

This investigation establishes five conclusions:

First: Pakistan’s economy is not a market but an extraction operation controlled by 10–15 families plus the military, with 31 families controlling 73% of stock market capitalization, 80% of banking assets in six entities, and 53% of power generation in guaranteed-profit IPPs.

Second: Elite capture drains 5–6.5% of GDP annually ($25–32B). Military business operations represent another 12.5% of GDP ($50B+). Nearly 20% of the economy flows to oligarchs rather than productive investment.

Third: A consistent operational pattern exists:

political capture → systematic sabotage → manufactured crisis → fire-sale privatization.

PIA and Pakistan Steel Mills provide definitive case studies.

Fourth: The same families have maintained control for 30 consecutive years (1995–2025). Four families from the original 1968 “22 families” remain dominant.

Fifth: Control of banking, media, politics, and military relationships makes reform structurally impossible without systemic rupture.

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9.2 The PIA Paradigm

Phase 1 (1959–1970): Merit-based excellence, profitability, global leadership.

Phase 2 (1970–2020): Political appointments, union capture, deferred maintenance.

Phase 3 (2020–2025): Manufactured crisis, fake-licence scandal, bans, Rs742B debt.

Phase 4 (2024–2025): Fire-sale privatization at 98% discount.

Outcome: Lucky Cement / Arif Habib consortium positioned to acquire national airline, consolidating monopolistic control.

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9.3 The Steel Mills Parallel

• 2006: Supreme Court blocks $362M “throwaway” privatization

• 2006–2015: State systematically destroys PSM

• 2023: Permanent shutdown

• 2025: New private steel plant negotiations

Lesson:

If oligarchs cannot buy state assets cheap, they destroy them and rebuild privately.

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9.4 Theoretical Implications

• Elite capture: Regime changes do not weaken elite power

• Institutional destruction: Elites destroy institutions when parasitism is insufficient

• Reform impossibility: Captured institutions cannot reform themselves

• Military-business nexus: Requires independent theoretical framework

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9.5 Policy Implications

For Pakistan:

• Halt PIA privatization pending independent valuation

• Criminal investigation into destruction of PIA and PSM

• Full IPP circular-debt audit

• Military business taxation and civilian oversight

• Mandatory media ownership disclosure

• Banking concentration limits

For international institutions:

• End privatization-only conditionality

• Require wealth taxation, military oversight, media transparency

• Independent corruption prosecutions

Pakistan receives IMF loans because privatization enriches elites who maintain geopolitical stability, making international institutions complicit.

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9.6 Limitations and Future Research

Limitations:

• Military business opacity

• Incomplete private-company disclosures

• Offshore wealth partially visible

• IPP contracts classified

Future research priorities:

1. Quantitative GDP extraction modelling

2. Comparative captured-economy studies

3. Network analysis of interlocking directorates

4. Longitudinal wealth tracking (1947–2025)

5. Independent audit of military enterprises

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9.7 Final Assessment

Pakistan is not failing. Pakistan is functioning exactly as designed—for 0.001% of its population.

The system does not need repair. It needs replacement. But replacement requires institutions that have been captured to act against their own interests.

That is why, in December 2025, the same families are positioned to buy PIA’s remains at a fraction of its value.

The same families.

The same playbook.

The same result.

Pakistan’s oligarchy has not merely captured the state.

They have become the state.

And the 94 million Pakistanis living in poverty are not citizens—they are revenue streams for an extraction operation disguised as a nation.

Until this reality is acknowledged, nothing changes.

The disease is oligarchy.

The symptom is national decline.

The cure requires systemic upheaval.

They have been running this playbook for 30 years.

And it works every single time.

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Conclusion

A serious investigation into Pakistan’s political economy cannot end with the comfortable claim that the country is merely “mismanaged.” Once all the evidence is on the table – the IMF’s estimate that five to six and a half percent of national output is siphoned off each year by favoured groups, the story of how PIA and Pakistan Steel Mills were first hollowed out and then either sold or scrapped, the way banking, energy, exports and media are clustered in a few interlocking hands – it becomes hard to avoid a starker conclusion. Pakistan is not just underperforming. It is performing for someone.

What comes into focus is a state that has been repurposed. On paper, the modern state is supposed to pool resources and risk so that citizens can have roads and schools and hospitals that no individual could build alone. It is supposed to protect the weak from predation by the strong and referee competing interests with at least some sense of fairness. In Pakistan, that machinery has been turned inside out. The very institutions that ought to act as guardrails – the bureaucracy, courts, regulators, public banks and state‑owned enterprises – have instead become channels through which value moves up and away, from the many to the few. When the IMF says that governance failures and elite capture are costing Pakistan several percentage points of GDP each year, it is putting a dry number on a very human reality: fewer jobs, poorer services, more people pushed abroad, and a country that never seems to become what its people know it could be.

The stories of PIA and Pakistan Steel Mills are central to this picture because they strip away abstraction. Both began as expressions of national ambition. Both showed, at least for a time, that Pakistani institutions could operate at high standards. Both were slowly dismantled by the same mix of political interference, patronage and neglect. In each case, there was a moment when crisis was not simply allowed to happen but actively invited – a minister’s reckless announcement that his own airline’s pilots might be unqualified, a deliberate choking off of gas supply to a steel plant – and that crisis then became the justification for saying, “We have no choice but to sell” or “We have no choice but to shut it down.”

PIA’s privatisation, unfolding in full view, captures this pattern almost too neatly. For years the airline was used as a job bank and political playground while its finances deteriorated. Only when it was heavily indebted, barred from Europe and synonymous with dysfunction did the talk of privatisation become unstoppable. The way the deal has been structured speaks volumes. The airline was split: a new operating company with planes, routes and staff, and a separate holding company lumbered with the old debt. That debt stays with the public. The cleaned‑up airline goes under the hammer.

When the bidding finally happened, it was billed as a victory for transparency. The auction was televised. The winning offer came in above the government’s reference price. On the nightly news, viewers were told that PIA had been sold for 135 billion rupees after “competitive bidding.” It sounded like a respectable outcome.

Look closer, and the picture shifts. Only a small fraction of that 135 billion – around 10 billion rupees – is actual money going into the treasury in exchange for three‑quarters of PIA’s shares. The rest is money the new owners are committing to pump into their own acquisition: funds for new aircraft, working capital, and balance‑sheet repair. In a straight business transaction, no one would confuse those two things. The price you pay the seller and the money you invest into the thing you’ve just bought are different categories. Here, they have been bundled together and sold to the public as if the full headline number were being paid to the state. Meanwhile, the mountain of old debt has been parked on the taxpayer’s side of the fence.

That division of risk and reward is not a footnote; it is the heart of the matter. What the public effectively gets out of the deal is relief from PIA’s day‑to‑day losses and a relatively small cash amount. What the new owners get is majority control of a flag carrier whose worst liabilities have been stripped away, a recapitalised operation they can shape according to their interests, and access to routes and landing slots that took decades to accumulate. If they succeed in turning PIA around, the benefits will primarily accrue to them. If the old debts continue to haunt the holding company, the costs will continue to be paid by ordinary Pakistanis through taxes, higher prices and thinner public services.

Pakistan Steel Mills shows the same logic playing out in another register. Here, an early attempt to sell the plant cheaply was stopped by the courts. Once that option was blocked, the institution was not repaired; it was slowly strangled. Production was run down, gas supplies were cut, and the mill was allowed to become a political and financial embarrassment. When the final decision came to close it, the announcement was couched in the language of necessity: “no buyer could be found,” “loss‑making,” “unsustainable.” The thousands of workers who lost their livelihoods were told, in effect, that history had left them behind. At the same time, the land on which the mill stands – strategically located, connected to port and road – has become the object of fresh plans and proposals. Once again, the institution is gone. The asset base remains, ready to be repurposed under new ownership and new branding.

Taken together, these examples make it harder to sustain certain comforting illusions. It becomes difficult to say, for instance, that Pakistan’s problem is simply that “the state can’t run businesses,” when the state demonstrably did so in earlier decades and when other countries continue to do so today. It becomes difficult to accept at face value the argument that there was “no alternative” to the particular privatisations and closures that have taken place. The patterns are too consistent, the beneficiaries too familiar, the timing too convenient.

They also connect directly to the more structural features documented elsewhere in the piece: a banking system in which a handful of groups decide who gets credit; an energy regime in which long‑term contracts guarantee returns to private power producers even when their plants are not needed; a tax structure riddled with exemptions and amnesties for those at the top; a media landscape in which a small number of owners, many with large non‑media interests, set the terms of public debate. Once you see these connections, the IMF’s six‑and‑a‑half‑percent number stops looking like an abstract statistic and starts looking like a running tally of opportunities deliberately squandered.

So what does it mean to “conclude” an investigation like this? It cannot mean producing a neat list of technocratic fixes and pretending that if only the right law is passed, the right regulator appointed, the system will begin to behave differently. Pakistan’s experience with reform is full of well‑designed changes on paper that never translate into different outcomes on the ground because those outcomes collide with the interests of those who hold real power.

Nor can it mean simply changing faces. Over the last thirty years, governments of every stripe have come and gone. Generals have ruled directly and indirectly. Popular leaders have risen, fallen, and returned. In all that time, the map of who controls credit, land, licences and contracts has shifted far less than the map of who sits in cabinet. As long as that remains true, swapping one set of politicians for another will not disturb the deeper equilibrium.

This does not mean nothing can change. It does mean that change will only come when enough pressure is brought to bear on the structure itself. That pressure can take many forms: legal challenges that make it harder to push through obviously tilted deals; public campaigns that turn particular subsidies or privileges into political liabilities; splits within the elite that open space, however briefly, for different ideas and alliances. None of these are guaranteed. All are messy. But they are more realistic than hoping for salvation from yet another IMF programme or yet another round of promises.

There are a few practical lessons worth drawing out.

The first is about language. As long as everything is labelled “corruption,” it is too easy for those benefiting from the system to individualise and trivialise it. A corrupt official can be sacked; a scandal can be ridden out. What is harder to dismiss is a clear account of how rules are written, how contracts are allocated, how losses are socialised and gains privatised. Naming oligarchy as oligarchy is not a rhetorical flourish. It is a way of refusing the story that what ails Pakistan is a handful of bad actors rather than the way power itself is arranged.

The second is about how we judge “reform.” Privatisation, deregulation and restructuring are not neutral tools. In some contexts they spread opportunity and discipline power; in Pakistan’s current context they have often done the opposite. Asking whether an auction was transparent, or whether a reference price was met, is not enough. We have to ask who is allowed to bid, on what terms, and with what history. We have to ask whether the result leads to more concentration or less, whether risks are being shifted upwards to those best able to bear them or downwards to those already at the edge.

The third concerns the role of the international community. Lenders and donors are not the authors of Pakistan’s elite capture, but they have become part of the story. By focusing overwhelmingly on narrow fiscal and external targets, and by treating any sale or closure of a state enterprise as a victory in itself, they have sometimes ended up cementing an unjust order rather than challenging it. If conditionality is to help rather than harm, it has to be aligned with measures that genuinely chip away at capture: taxing those who have long escaped taxation, ending guaranteed returns where they are not justified, insisting on full financial transparency for all large public and quasi‑public entities, including those run by the security establishment.

Finally, there is a question of imagination and dignity. Numbers on a page – 6.5 percent of GDP lost, 800,000 people emigrating in a year, tens of billions in circular debt – can be numbing. Behind each of those numbers are choices about whose lives are made precarious and whose comforts are protected. A family that keeps its children home from school because it cannot afford uniforms, a patient turned away from an understaffed hospital, a graduate who sees no path except emigration – these are not “externalities” of elite capture; they are its human face.

This work cannot dictate how Pakistanis respond to those realities. It can, at best, help strip away the fog of half‑truths and myths that have long surrounded them. It can show that PIA did not simply fall victim to inefficiency, that Pakistan Steel Mills did not simply succumb to “market forces,” that the billions identified by the IMF are not the cost of some unavoidable transition but the price of decisions made and remade in the interests of a few.

Whether that knowledge remains trapped in reports and journal articles, or becomes part of a wider reckoning, is not something any single writer or researcher can decide. That will depend on what citizens, activists, journalists, judges, bureaucrats and even some members of the elite themselves choose to do with it. It will depend on whether enough people are willing to resist the next round of “there was no alternative,” and to insist that alternatives be put on the table.

What can be said, with confidence, is this: Pakistan’s crisis is not a passing storm. It will not be weathered by simply tightening belts and waiting for better times. It is a system that has to be confronted and remade. The first step in that process is to see it clearly. If this investigation has contributed even a little to that clarity, then it has done the most important part of its job.

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Sources (Selected)

International Financial Institutions

• IMF Governance and Corruption Diagnostic for Pakistan (2025), including associated press releases, technical summaries, and analytical commentary.

• World Bank and UNDP reports on poverty, inequality, and governance in Pakistan.

PIA Privatisation and State-Owned Enterprises

• Reporting by Dawn, Business Recorder, Profit, The News, Express Tribune, NDTV, India Today, and other regional outlets on:

  • PIA’s financial deterioration

  • The pilot licence scandal

  • EU and UK aviation bans

  • Corporate restructuring

  • The Rs135 billion Arif Habib–led consortium transaction

• Official statements, notifications, and briefing documents issued by Pakistan’s Privatisation Commission and relevant government ministries regarding PIA and other SOEs.

Pakistan Steel Mills

• Coverage by The News, Express Tribune, Profit, and specialist steel and energy bulletins on:

  • PSM’s operational history

  • Gas supply cuts

  • Production collapse

  • Closure decisions

  • Land-repurposing and replacement plant plans

• Supreme Court of Pakistan judgments and government notifications relating to the 2006 privatisation attempt and subsequent policy actions.

Elite Capture, Oligarchy, and Military Business

• Pakistan Institute of Development Economics (PIDE) studies on:

  • Stock-market concentration

  • Family ownership patterns

  • IPP contracts and power-sector distortions

• Investigative reporting and analytical work on military-owned enterprises (including Fauji Foundation, DHA, and related entities) in Pakistani and regional media, alongside commentary from think tanks and independent columnists.

Sectoral Concentration

(Banking, Energy, Textiles, Sugar, Media)

• State Bank of Pakistan publications on banking ownership, consolidation, and privatisation history.

• Energy-sector data on circular debt and IPP payments from the Central Power Purchasing Authority (CPPA) and business press.

• Trade and export statistics particularly textiles alongside corporate filings and annual reports of major conglomerates.

• Media-ownership mapping projects and investigative features on cross-ownership and audience concentration.

Commentary, Interviews, and Social Media

• Public commentary and analytical threads by Pakistani economists, journalists, and researchers examining the IMF diagnostic, PIA auction structure, and Pakistan Steel Mills’ closure.

• Television interviews, long-form essays, public talks, and panel discussions contextualising elite capture, institutional decay, and their social consequences.