PAKISTAN's military dictator, Pervez Musharraf, this week declared martial law, in effect mounting a coup against himself.

This latest twist in this perpetually difficult, confounding country will outrage many - most Pakistanis, the Western world, the leadership hopeful and former prime minister Benazir Bhutto - but is it bad for business? Not for the powerful platoon in uniform, for whom it's the best thing that has happened since the last time General Musharraf mounted a coup - the one that installed him in 1999.

General Musharraf's comrades in the military control Pakistan's epaulette empire, a $US40 billion ($43 billion) sprawl of businesses. Controlling about 10 to 15 per cent of the economy, the military is the biggest single stakeholder in Pakistan's booming economy. Property, tourism, construction, transport and telecoms, there is barely a business sector not tinted with some sort of brass hue. The generals even own a popular breakfast cereal brand, alongside bakeries, petrol stations, farms, banks and companies listed on Karachi's soaring stock exchange.

Pakistanis grumble that other countries have a military but in Pakistan the military has a country. And General Musharraf's eight-year rule has been party time for men in uniform.

Military Inc, a controversial new book by the respected writer and journalist Ayesha Siddiqa - banned from sale in Pakistan but widely available elsewhere - says that the average net worth of a general is now about $US2 million.

As a former analyst at navy headquarters, Siddiqa has seen Pakistan's military-industrial complex from the inside. And she delves deeply into a mostly off-limits subject in a country that has spent more than half its 60-year history under military rule.

It's not so much corruption, she says - although that is evident across the economy - it's the large-scale cronified allegiance General Musharraf has bought by parachuting thousands of officers into well-paid private-sector sinecures, alongside their uniformed duties.

The military is one of the most efficient institutions in what has traditionally been a country of chronic dysfunction, and the generals have got rich - thanks to a massive, and long overdue, economic boom engineered by Pakistan's civilian Prime Minister, Shaukat Aziz, probably the most competent economic manager the country has had.

Since 2004, when General Musharraf appointed Mr Aziz prime minister, Pakistan has enjoyed growth to rival its illustrious neighbours China and India.

Mr Aziz's pro-business, market-oriented reforms have pulled Pakistan back from near-collapse in 1999, no small feat in a country burdened by unremitting corruption and a moribund bureaucracy. September 11 and the "war on terror" helped too. The US and its allies have paid plenty for General Musharraf's support, cancelling debt and boosting aid.

"The Government has no business in business," Mr Aziz told me last year.

This makes him unpopular with old crony plutocrats hooked on the state drip, but genuine entrepreneurs have been unleashed to the point of mercantile mayhem. To stroll along Karachi's chaotic I.I. Chundrigar Road, Pakistan's Wall Street, is a near death-by-dealmaking experience.

Pakistan has been one of the world's most booming economies this decade. Its property market fizzes as Hong Kong-style off-the-plan complexes sprout. Karachi's stockmarket is 50 per cent up this year and one of the world's best performers this decade.

Foreign suitors like Australia's BHP Billiton, drilling for gas in Baluchistan, have expanded and are doing well, citing annual returns of 20 to 30 per cent and pleasing productivity. There is even a thriving Bangalore-style outsourcing industry. Infrastructure - freeways, airports, ports, electricity supply - would be a revelation in most parts of India. And it's all good for the military.

A plus is that Mr Aziz doesn't regard public office as a personal ATM machine. He was a self-made millionaire before he took office, trading an Upper East Side lifestyle in Manhattan for a beaten-up Toyota staff car and assassination attempts. Importantly, he wasn't a politician, a particularly putrid species in Pakistan. A contender for the post of Citibank chief executive worldwide before he was tapped by General Musharraf to be finance minister a week after the 1999 military coup, the urbane Mr Aziz headed Citi's corporate banking operation for Asia-Pacific and the Middle East through the '90s, and its private banking division.

Mr Aziz told me last year he had never heard of General Musharraf until he saw news of the putsch on CNN. He dismissed it as "another coup, another general", but was intrigued enough to take his call - and the job.

Officials here tend to specialise in oleaginousness, but Mr Aziz says he views his job as "volunteer national service". Few Pakistanis perceive him as corrupt, a first for their prime ministers.

The West prescribes job creation, a strong economy and fighting corruption as the antidotes for terror and Islamist radicalism.That Mr Aziz is delivering these should please Islamabad's Western patrons. But the West favours a feudal baroness twice ousted as prime minister for corruption, whose administrations were condemned as incompetent and on whose watch rose the Taliban.

In a decade of exile, Benazir Bhutto has clubbably presented herself in Western salons as a liberal democrat who can deliver Pakistan from the Taliban, while dodging hard questions about her competence. Her record isn't pretty, but her backers in Washington, London and Canberra seem to have developed an acute bout of amnesia about her abilities.

Witness Alexander Downer's unbounded regard for Bhutto, now angling for a third stint as prime minister. The Foreign Affairs Minister said last week that he thought Bhutto was "a good woman", someone who "stands for the things we stand for in Australia".

Perhaps Mr Downer sees in Bhutto shades of another irrepressible politician dear to him. Ambition also unbounded - or perhaps it's something else - Bhutto qualifies as a subcontinental "Lazarus with a Triple Bypass", in trademark white headscarf instead of a Wallabies tracksuit.

But Mr Downer is more correct than he might imagine. He claimed ignorance of the AWB oil-for-food scandal in his departmental backyard; Bhutto has a similar skeleton dangling in her closet. The same United Nations inquiry that fingered AWB alleged that her company made some $US144 million in dubious Iraqi oil trades when Saddam Hussein ruled in Baghdad. It could run in the family. Pakistanis know her husband, Asif Zardari, as "Mr Ten Per Cent".

Bhutto dismisses the corruption allegations that plague her as political. But funny money aside, many say a third Bhutto term is about the worst thing that could happen to Pakistan, bearing in mind that it was during her second term that the Pakistan-raised and funded Taliban consumed Afghanistan.

The conservative American historian and South Asia specialist Arthur Herman describes Bhutto as "one of the most incompetent leaders in the history of South Asia". Jemima Khan, former wife of the cricketer-turned-politician Imran, has described her as "a kleptocrat in a Hermes scarf" and the country's "most self-enriching leader".

The Asian Development Bank says Pakistan's economy is now five times bigger than it was under Bhutto in 1996. Foreign reserves are 15 times what they were in 1990, when her first term ended, and 10 times those of 1996, when her second term ended.

The corruption watchdog Transparency International ranks Pakistan 138th of 179 countries surveyed. It is hardly Scandinavian-style probity, but it's cleaner than Indonesia and some distance from being the second-most corrupt country on Transparency International's list, as it was when Bhutto last ran the place.

Pakistan is dismissed as a near failure where only the foolhardy would invest, but it generates some of Asia's best returns for foreign investors, and the country's generals.

Mr Aziz's Achilles heel is that he is beholden to the uniforms, as Bhutto will be should she achieve power again. The military, after all, killed her father, which gives her moral authority among the poor of the country's populous rural south.

However efficient, the generals' grip on Pakistan is a burden on the country Mr Aziz says he wants to make "normal".

His lip noticeably curled on Sunday when executive responsibility fell to him to arrest hundreds of General Musharraf's opponents. But, short of resign, he can do little about the brass, which he needs to back his separate run against Bhutto for office. Not when his patron is a determinedly uniformed dictator who resides in Rawalpindi's Army House and doesn't know how - or when - to leave.

Eric Ellis is South-East Asia Correspondent of Fortune magazine.