According to the Pakistan Ministry of Defence Production’s (MoDP) “First Year Performance Report,” the country had registered $212.6 million US in defence exports from August 2018 to August 2019.
Pakistan Aeronautical Complex (PAC) booked the highest value at $184.38 million US, which was followed by Pakistan Ordnance Factories (POF) at $7.13 million US and Heavy Industries Taxila (HIT) at $1.3 million US. In addition, private sector firms booked $19.36 million US in sales.
No additional breakdowns were provided by the MoDP.
It is likely that PAC’s exports were fueled by co-production work for FC-1/JF-17 sales to Myanmar and/or Nigeria. Though an agreement was signed with Turkey for the sale of 52 Super Mushshak basic trainers, it is unclear if PAC has started manufacturing these aircraft.
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It is also unclear if PAC is registering the sale of Boeing 777 and 737 as ‘defence exports,’ which it has been manufacturing under an offset agreement with the US aerospace and defence giant since 2006.
POF had suffered a sharp collapse from its exports between 2017-2018 and 2018-2019.
According to the MoDP’s yearbook for 2017-2018, POF had registered sales of $58.15 million US (including a contract with Turkey for the sale of 1,000 PK-83 general purpose bombs). In 2016-2017, POF registered sales worth $67.8 million US, and in 2015-2016, it exported $93.68 million US in defence goods.
No explanation was provided as to why POF only achieved 12.3% of its export figures from the previous year, or, more alarmingly, the cause for the downward trend in exports since 2015-2016.
HIT’s exports likely comprised of the six ‘Interceptor’ light armoured vehicles it supplied to Bahrain.
The MoDP did not record export figures were recorded for Karachi Shipyard & Engineering Works (KSEW) or the National Radio Telecommunication Corporation (NRTC).
Notes & Comments:
Relative to capacity, Pakistan’s defence suppliers categorically underperformed. In fact, Bulgaria exported $844.3 million US in goods in 2018, while India booked $621 million US in sales for 2019-2020.
Though plagued with many constraints and challenges, the root cause of Pakistan’s lack of defence exports could be traced to a lack of institutional interest. This is apparent in the quality of the marketing, outreach, and lack of coherent product development and prioritization.
Be it deflating the efforts of the private sector or binding the modernization of defence production assets, such as POF’s small arms manufacturing, to armed forces requirements, Pakistani defence manufacturers will find it increasingly difficult to compete against more agile competitors.
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Moreover, the armed forces’ general lack of interest in research and development (R&D), and alarmingly, joint R&D ventures with South Africa, Ukraine, and/or Turkey, will prevent the domestic industry from at any point offering its own competitive solutions.
The solution will ultimately have to start with changing the business leadership and management of these organizations to individuals with genuine product design, development, marketing and sales experience.
Under the current – yet slow and rigid – administration, change is not tenable, nor will Pakistan’s defence exports climb to figures that better suit the country’s heavy investment in the infrastructure.