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Analyzing the SIPRI Report on Pakistani Defence Procurement

The Stockholm International Peace Research Institute (SIPRI) released its research on worldwide defence procurement activities from 2013 to 2017. SIPRI found that the Middle East had fuelled the bulk – i.e. 49% — of US armament exports, which accounted 34% of all arms sales in 2013-2017. The US was followed by Russia, France, Germany and China as the second, third, fourth and fifth leading exporters, respectively.

Pakistan was the ninth largest arms importer in that period, with China being its leading supplier (and with Pakistan being China’s top customer). SIPRI also found that Pakistan’s arms imports in 2013-2017 dropped compared to 2008-2012, despite a period of significant uptake in India’s procurement, including big-ticket imports from the US, France, Russia and Israel.

In terms of SIPRI’s technical observations, there are many caveats. First, the opaqueness of Pakistani arms procurement processes – especially in terms of tendering or releasing bids – makes it difficult to verify its specifics, such as procurement of munitions and subsystems. Second, some of SIPRI’s details are, at best, to be interpreted as tentative details, not firm contracts put into effect.

For example, SIPRI has listed the purchase of four MILGEM corvettes from Turkey in Pakistan’s trade register along with plans to procure 76mm guns from Leonardo and MTU Friedrichshafen diesel engines to arm and power the ship, respectively. However, the MILGEM’s main contractor – Savunma Teknolojileri Mühendislik (STM) – has yet to announce such an event.

However, the details aside, SIPRI’s overarching solutions correspond with observable trends. Since 2013, Pakistan had finalized few big-ticket orders – among them the purchase of eight submarines from China and three airborne early warning and control (AEW&C) aircraft from Sweden – and relied on incremental batch orders from its domestic industry to resolve its near-term defence needs.

Periods of low expenditure followed by high-spending periods is not new to Pakistan. For example, there had been a dearth of big-ticket arms purchases in the 1990s, but these were followed by a spate of them – i.e. 18 Lockheed Martin F-16C/D Block-52+, Erieye AEW&C, F-22P frigates and others – in the 2000s.

However, worsening structural economic woes looming until at least 2019 and a broad shift in national security messaging – which had favoured ‘sub-conventional warfare’ with lesser focus on conventional threats – can, rightfully, be viewed as indicators for a consecutive ‘down period’ in big-ticket procurement.

Economic Outlook

Pakistan’s federal exchequer must have ample fiscal space to sustain big-ticket procurement. However, when the $43 billion US state budget of 2017-2018 drains 34.5% to repaying domestic and foreign debt (i.e. $11.14 billion), it is evident that expenses are straining.[1][2] Pakistan’s budget deficit also grew to $7.5 billion US, amounting to 2.3% of its gross domestic product (GDP).[3] The likely outcome of such pressure will be to curb major expenses, and it is likely that Pakistan’s big-ticket arms procurement plans will be at the forefront of this reality. In fact, incessant fiscal constraints were the primary cause of pulling Pakistan’s imports in the previous SIPRI period, there is little to suggest change for the next SIPRI period.

The impact of precious finances is several-fold. First, it certainly limits the armed forces’ options in terms of suppliers. The majority of big-ticket items from the US and Western Europe are high in cost, at least in terms of upfront procurement cost. Thus, Pakistan’s pool of options in the way of suppliers is limited, and this trend has been evident in the previous SIPRI period, with China securing two big-ticket programs: the Pakistan Navy submarine program and the Pakistan Army low-to-medium air defence system (HQ-16). Second, Pakistan is risk-laden; creditors will be hesitant to extend loans to Pakistan on account of possible repayment lapses and that will also confine Pakistan’s options, leaving it suppliers willing to extend loans.

Improvement in the fiscal exchequer primarily stems from the government increasing its collection from the total GDP (i.e. total economic production in Pakistan). This can occur through tax revenues, profit from state-owned enterprises (SOE) and interest-on-loans (issued by the government). However, achieving this is contingent on competent, long-term and foresight-driven public policymaking, with special attention to building high-value products (e.g. machinery, technology development and engineering services, mineral and raw materials processing, etc) and securing strong export markets for those products.

Sub Conventional Warfare

Since 2013, Pakistan’s security establishment has been emphasizing the importance of ‘sub conventional warfare’ – i.e. the apparent involvement of adversarial states in the insurgencies and other asymmetrical threats facing Pakistan. Recently, the Director General of Inter Services Public Relations (ISPR), Maj. Gen. Asif Ghafoor stated: “India is […] busy in fomenting unrest through terrorism using Afghan soil”.[4]

It would be disingenuous to suggest that such machinations – on both sides – have not been in play; rather, it has been a constant exchange, with Islamabad and New Delhi alike looking to exploit one another’s vulnerabilities for their respective strategic interests. Likewise, it is important to build internal capacity – from a healthy stock of specially trained security forces to robust intelligence to concerted foreign policy efforts to effect change in the international environment to one’s favour.

Unfortunately, the events that had unfolded in Pakistan through the previous decade show that the main focus of efforts to subvert such ‘sub conventional’ threats have occurred internally. Granted, there is little else one can do in the near-term to subvert an insurgency than to execute a counterinsurgency (COIN) campaign, yet Pakistan’s security establishment appears to have no plan for external factors.

Is the solution simply to keep fighting COIN as new threats supposedly enter through Afghanistan? If this is the case, then how does Pakistan intend to balance the cost of maintaining a conventional military with the direct and indirect costs of COIN? The National Defence University’s (NDU) Maria Effendi found that Zarb-e-Azb had cost $1.9 billion US to the exchequer.[5] Surely, this is a zero-sum factor – i.e. expenditure in COIN is coming at a cost, evidently the cost of procurement. Extrapolate this to another three or four large-scale COIN engagements over 15-20 years, and that would amount to $8+ billion in cost that might have otherwise been spent on ships, aircraft and/or armoured vehicles.

Resolving insurgencies require a cohesive understanding of the causes and a comprehensive effort to also remove those causes. For example, if Pakistan on one hand tells its domestic audience that India and the US are colluding to destabilize the China Pakistan Economic Corridor (CPEC) from Afghanistan, then it is of incredibly limited sense why the ISPR will reiterate how the US and Pakistan are “allies”.[6] Or why the outgoing Chief of Air Staff (CAS) of the Pakistan Air Force (PAF) would publicly accept an award from the US Air Force when the PAF CAS voiced consternation of US drone strikes in Pakistan months earlier.[7][8]

Clearly, there is a lack of cohesion, which does nothing to instil confidence of there being a comprehensive plan to address the root-causes. Such a plan would require Pakistan to ask itself questions such as: (1) is there any interest in supporting a long-term US presence in Afghanistan, and if not, what can realistically be done to separate Pakistan from such activity; (2) is there enough attention being paid to the Pakistani state’s vulnerabilities – e.g. lack of socio-economic support, insufficient avenues for remediation (such as judicial and police services) – and apparent lack of legitimacy in some quarters; and (3) strong efforts to forge bilateral relationships with key markets to offset economic dependence on the US, among others.

The tangent was necessary to establish that the building and sustainment of a strong conventional force is tied to the economic and political elements of the state. In a sense, the three are interdependent: the strong military and economy support political weight, the political weight supports economic stability and can elevate the military’s image, the economy feeds the military and political establishments. If Pakistan’s economic and political pillars corrode or stagnate, then so will the military. The extension of quiet-periods in Pakistani procurement is a result of the now longstanding political and economic stagnation.


It should be noted that Pakistan’s domestic industry is a prominent source for certain big-ticket items: the al-Khalid main battle tank (MBT) and the JF-17 Thunder multi-role fighter being among the most notable. However, to consider the JF-17 as the sole method of modernization for the PAF would be revisionist – it was to be a piece among other pieces (i.e. F-16 and FC-20), the latter failing due to insufficient funds. The production output of the al-Khalid MBT is also low relative to Heavy Industries Taxila’s (HIT) capacity, but it might be a victim of shifting technological realities as much as limited funds.[9]

Nonetheless, while the JF-17 and al-Khalid-series provide strong baseline or core elements, it would be false to suggest that Pakistan would not augment them with strong qualitative drivers from abroad if given the opportunity. Furthermore, these domestic programs rely on significant imports – e.g. electronics, propulsion and structural materials – to support them. Short of a genuine industrial effort at the national level to indigenize the contributing inputs, Pakistan will remain a defence importer, if not in terms of final outputs, then as an importer of inputs. In the near-term, Pakistan’s defence planners will have to identify their options for lowering their defence costs without critically compromising their needs.

This optimization would necessitate building a network of suppliers for inputs and subsystems, leveraging the domestic production base efficiently to reduce costs, and staging procurement such that it balances issues such as maintaining active production lines through the long-term, meeting defence needs in a timely fashion, and ‘future-proofing’ core designs to delay obsolescence during long-term production. If little can be done about the structural economic and overarching political challenges, then emphasis must be laid on operations – i.e. optimizing procurement to be as efficient and effective as possible.

China will be at the center of these efforts and, to Pakistan’s credit, there are few – if arguably any – others better suited to balance cost with capability in most respects than China.[10] Thus, attention should be paid to how far Chinese technology advances permeate into Pakistani programs, especially in terms of drones, stand-off range weaponry and other asymmetrical means (i.e. using specific kinds of weapons to mitigate the advantages available to a generally better-equipped advanced foe). China could factor in a market of off-the-shelf goods and development partner/engineering services provider, enabling Pakistan to benefit from China’s research and development investment and scale.

However, returning to the issue of political and economic realities, it is vital that Pakistan be cognizant of its increasingly apparent position of relying on China, which could imbue Beijing with the ability to dictate terms and pricing (in lieu of alternatives). Yes, the commercial element would see Pakistan engage other suppliers – e.g. in Turkey, South Africa, Ukraine and Italy – but defining shared interests with China is also essential, so as to broaden the pool of support (e.g. access to technology, credit, etc).

[1] “PML-N government unveils Federal Budget 2017-18 with Rs4.75tr outlay.” Dawn News. 27 May 2017. URL:

[2] “Budget in Brief 2017-2018.” Ministry of Finance Pakistan. URL:

[3] Shahbaz Rana. “Pakistan’s budget deficit increase to Rs826b”. The Express Tribune. 06 January 2018. URL:

[4] “India is busy in fomenting unrest through terrorism using Afghan soil: DG ISPR”. Dawn. 18 March 2018. URL:

[5] “Zarb-i-Azb in North Waziristan cost $1.9 billion: expert”. Dawn. 18 January 2017. URL:

[6] “In case of US action, Pakistan is ready: DG ISPR.” The Express Tribune. 03 January 2018. URL:

[7] “Air Chief Marshal Sohail Aman accorded with US Legion Of Merit”. Dawn. 12 March 2018. URL:

[8] “PAF can shoot down any drone violating Pakistani airspace, says air chief”. The Express Tribune. 07 December 2017. URL:

[9] “Why is Pakistan procuring an off-the-shelf tank?” Quwa Premium. 12 January 2018. URL:

[10] “China’s scale gives flexibility for high-tech arms development”. Quwa Premium. 09 February 2018. URL:

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