DEPO’s Call for Coherent Export Policy & Pakistan’s Defence Product Development (FREE SAMPLE) Plus

The Defence Export Promotion Organization (DEPO) called upon the Government of Pakistan to establish a coherent policy framework for exporting defence products. The statement was conveyed by the Director of Coordination Brig. Gen. Waheed Mumtaz in the context of discussing Pakistan’s defence export efforts. Overall, Mumtaz called for focus on achievable markets, such as Africa, and effective messaging, stating that maintaining cordial foreign relations ties with a certain market need not translate into sales.[1]

On 28-29 November 2017, DEPO co-hosted a seminar, titled, “Pakistan’s Defence Industry: Export Potential, Challenges and Prospects,” with the Sustainable Development Policy Institute (SDPI) to begin the process of formulating a “draft strategy framework to secure (sic) desired share of defence industry products in global arms export market.” Though Pakistan managed securing defence exports worth $270 million U.S. in 2016-2017, it is a minute fraction of the $1.69 trillion in total global defence expenditure.[2]

Being a state with a national security-centric outlook, one focused on external threats and – since 2001 – internal threats, defence is an integral piece of Pakistani policy and economic development. To sustain its long-term procurement plans and keep its inventory serviceable, Pakistan invested considerably in raising production and maintenance facilities for armoured vehicles, aircraft and naval vessels. Marquee entities include Pakistan Ordnance Factories (POF), Heavy Industries Taxila (HIT), Karachi Shipyard & Engineering Works (KSEW), Pakistan Aeronautical Complex (PAC) and others.

Although it is true that commercial endeavours were not the primary purpose of these industry pieces, the reality that HIT, POF, KSEW, PAC and others are relatively minor players in the commercial market is on notice. With an uncertain near-term economic outlook, especially in terms of trade balance and foreign currency stock, it appears that for Pakistan’s defence planners, the high cost of modernizing for domestic needs requires an offsetting force of fiscal gain for sustainability.

However, although the requirement for an overarching policy will provide direction, it is important to understand the nature of Pakistan’s defence industry – i.e. it being granularly directed by the armed forces to support the armed forces. This is a factor in determining Pakistan’s product catalogue and investment in commercial activity (e.g. dedicated marketing and messaging), and an issue that must be examined as part of any substantive effort for increasing defence exports.

It is important to preface this discussion by acknowledging that the design, development and production of weapon systems necessitate layers of industry inputs, from surface level design that could involve the integration of various subsystems to the requisite human and technology capital to develop subsystems, especially complex technology, such as engines. When referring to products, Quwa is describing the final or resulting product of amalgamating subsystems and work that are both Pakistani and foreign. However, in a later portion of this article Quwa discusses various issues relating to domestic subsystem production.

Product Development in Pakistan

The primary purpose of HIT and PAC products, such as the al-Khalid main battle tank (MBT) and PAC JF-17 Thunder multi-role fighter, is to provide the Pakistani armed forces with affordable solutions to fulfil their mainstay inventory requirements over the long-term. Domestically producing the al-Khalid MBT and JF-17 allows Pakistan to channel a substantial portion of its defence expenditure in its local economy, thus saving on foreign-currency outflows and (where local labour and material costs are a factor) direct cost.