IHS Jane’s has projected that Pakistan could spend $12 billion U.S. on big-ticket weapon systems in the period of 2016 to 2024. For prospective arms vendors, the market of focus in Pakistan will likely center on a number of major land armament programs, such as main battle tanks (MBT), self-propelled howitzer (SPH), armoured personnel carriers (APC), and light armoured vehicles.
In terms of MBTs, the al-Khalid II is expected to be the leading program (at a projected value of $1 billion U.S.). The Talha tracked APC will continue to be inducted as well (at a value of $1.1 billion U.S.). According to Jane’s, possible “opportunities exist for a self-propelled mortar, an APC and a SPH” at values of $1.5 billion, $1.1 billion and $844 million, respectively.
Jane’s also noted that Pakistan’s economy is projected to continue struggling, with its GDP growth rate anchored to a little over 3.5% over the next five years. Despite that, Pakistan has increased its defence expenditure for the coming year from 2.3% of its GDP to 2.54%.
Comment and Analysis
Although Pakistan’s projected expenditure rate is on the lower side compared to that of other powers in Asia and the Middle East, it is a sizable amount in its own right. Pakistan is evidently looking to reinvest most of that money back into its domestic industry, specifically existing solutions.
The al-Khalid II main battle tank (MBT) has returned to the development pipeline. It is not a new program, but changes in the technology market will likely impact the improvements it will exhibit over the al-Khalid and al-Khalid I MBTs. For example, Pakistan could potentially consider acquiring Ukraine’s recently revealed 1500hp diesel engine, which is derived from the KMDB 6TD-2 currently used on the al-Khalid. Pakistan may also try to procure some of the technology onboard Turkey’s Altay MBT, most notably its electronics and Akkor self-protection suite, which is capable of soft and hard-kill defensive measures.
Regarding the possibility of Pakistan inducting another APC type. In 2015, Pakistan was looking to finalize the purchase of the NORINCO VN-1 8×8 wheeled APC with local licensed production from China. It is likely that Jane’s is referring to this program, though at this stage other companies, such as Paramount Group with its Mbombe 8, may be looking to make an entry.
The possible self-propelled howitzer (SPH) acquisition is interesting. The projected value of the program – at $844 million U.S. – suggests that around 200 machines could potentially be procured. NORINCO’s PLZ-52 or PLZ-05 would be the likely frontrunners of such a requirement, assuming a tracked system is being sought. Competitors could include the Turkish T-155 Firtina, which is derived from the South Korean K9 Thunder, and surplus American M109s (which would add to the Army’s existing force of M109A2/A5s).
In the less likely case that a wheeled SPH is being sought, the Army would be best served to bind such a decision to its selection of a wheeled APC, so as to achieve platform commonality and save in maintenance and logistical costs. In this case, it would basically need a vendor to provide the turret and cannon. It can source its entire set of solutions from China, though the South African industry could potentially offer a competing alternative. In the case of self-propelled mortar, if a wheeled system is being sought, then it would be best to base it on the wheeled APC platform. If a tracked system is on the cards instead, then the best course of action would be to acquire a turret for the Talha APC.
It is important to note that armour and vehicle programs will only take up a portion of the $12 billion U.S. that is expected to be spent. Most of this money has likely been locked to long-term programs, such as the Pakistan Air Force (PAF)’s JF-17 Thunder and the Pakistan Navy (PN)’s next-generation submarines.
That does not mean that there is a lack of opportunity for prospective defence vendors. For example, with the PAF not being able to procure new-built F-16s on a subsidized basis from the U.S., the JF-17 Block-III may be positioned as a far more critical acquisition. In turn, the PAF may be on the look for qualitatively stronger sub-system offerings that it could pair with the fighter. This could be an opportunity for the likes of Aselsan, Leonardo-Finmeccanica and Denel Dynamics.
Similar prospects could be present in the PN’s submarine program, especially since it is poised to contract the Turkish industry to upgrade its Agosta 90B submarines. It is almost certain that the upgrade will be in the area of electronics, which could potentially make their way onto the PN’s eight forthcoming Chinese origin submarines as well. The wild card in the PN’s case would be surface warships, an area which could result in a number of new vessels if long-term financing support is secured. It is also unclear to what extent Pakistan Army Aviation will figure in this expenditure run, though it does have 15 Bell AH-1Z Viper dedicated attack helicopters in the pipeline.
Although there has been some noise about Pakistan seeking a new fighter type in lieu of new-built F-16s, this idea is largely being pushed by the Pakistani government (via its statements to the effect). The PAF has not signalled such plans, at least in the current term (2016-2024). In other words, the prospect of the Su-35 or any other platform in the short and medium-term is a wild card bet, one dependent on numerous factors, such as Pakistan’s economic prospects and its foreign relations clout. That said, used F-16s will enter the pipeline, and a market for the American defence industry may emerge via the possible upgrades the PAF may implement onto those F-16s.
Besides the JF-17 and used F-16s, the one program of significance that will gradually gain momentum is the PAF’s next generation fighter, a program that the PAF leadership hopes will impart genuine research and development as well as advanced industry (e.g. manufacturing and materials fabrication) growth in Pakistan. Without a tangible design, the prospect of direct commercial engagement is limited, though depending on the PAF’s execution, ‘softer’ procurements in the form of capacity building, consulting and infrastructure development could be on the horizon. Large expenditure will likely be seen after 2020.
Finally, it must be noted that Pakistan’s projected expenditure is not set in stone. The country’s uncertain economic outlook and security climate can have significant impacts on the armed forces’ development goals. The spending potential could very well decline. Of course, one should also keep an eye on the necessary changes Pakistan would need in order to sustainably increase its defence expenditure.
With two major events occurring by 2024, i.e. the possible selection of a new Chief of Army Staff (or an extension of the current) and the 2018 general elections, reflection ought to be given to what is necessary for positive change. Significant direct expenditure is committed towards the counter-insurgency campaign in the Federally Administered Tribal Areas (FATA). A conclusion to the conflict would yield direct peace dividends. If compounded by a competent, forthright and nationally invested political leadership, one that succeeds in implementing strong anti-corruption policies, regulatory and bureaucratic efficiency, and a principled foreign relations strategy, Pakistan’s overall direction will improve substantially. Conversely, failure in these areas will have negative results.