At a recent seminar in Islamabad, the president made a convincing case for the virtues of

engaging the private sector in defence production. The Minister for Defence Production
was equally enthusiastic about a close relationship developing between the public and
private sectors. Serving and retired senior military officers also endorsed this viewpoint
and General Tanveer, who recently retired as secretary of Defence Production, read an
elaborate paper on the merits of this partnership. It is heartening to know that there is a
major shift from the mindset of the past and a growing realisation regarding the
advantages of this partnership. I distinctly recall that as chairman of the Pakistan
Ordnance Factories Board and later as secretary of Defence Production, there was a lot of
resistance from the top brass with respect to involvement of the private sector in defence
production. There was a mistaken belief in the military hierarchy that by involving the
private sector, it would lose control over state-owned defence installations. To some
extent, that impression still persists.
Indeed, Pakistan has come a long way in indigenous defence production, considering that
at the time of Partition, it did not have any defence industrial units. All the defence
industries built by the British to serve their war machine were located in India. To add to
the challenges of a young nation, we had practically no civil industries either, apart from
a few sugar mills and textile spinning units. The technological and industrial base was
extremely weak and the military was dependent on weapons and equipment inherited
from the British or imports from Western sources. But soon after the major skirmish with
India in Kashmir in 1948, Prime Minister Liaquat Ali Khan decided to set up an ordnance
factory to produce small arms. Initially, it was located in Rawalpindi, but later shifted to
Wah where it has developed into a huge complex. Over the years, Pakistans defence
industries have grown significantly and boast of a wide range of military hardware. This
includes major weapon systems, such as armoured fighting vehicles, fighter and trainer
aircraft, frigates, patrol boats, cruise missiles, intermediate range missiles, electronic and
optronic devices and communication equipment. Pakistani products command the
confidence of our military and have also found limited markets abroad. However, there
are still major challenges that confront defence production.
The most glaring weakness of our leadership is that it lacks a clear vision regarding the
integration of the private sector as a partner. Pakistan clearly needs an internationally
competitive private sector participation to ensure a reliable domestic supply of
technology and systems, and to contribute to the countrys overall industrial and
technological development. Involvement of the private sector will also help in sustaining
political support for defence production. Pakistans military industrial complex needs to
work more closely with the private sector and build on some of its strengths. That would

include employing a more rigorous methodology in production processes, as well as

better costing, accounting and budgeting methods. This should be accompanied by
stronger oversight and quality assurance and a concentrated effort to translate best
practices into the makings of a more export-oriented defence production sector. Research
and development is another critical area that the defence sector has ignored or given scant
attention to. It is a short- sighted approach to merely rely on transfers of foreign
technology and base the entire indigenous production on drawings and specifications
supplied by foreign countries. The most critical areas for domestic research and
development are communications and related equipment, explosives and propellants, the
manufacture of specialised materials (such as carbon fibre, exotic alloys and hardened
steels), avionics, electronics, lasers and computation.
Strategic vision demands that our leaders comprehend the importance of the defence
economy in the context of the national economy and exploit its potential. This, however,
would only be feasible provided our defence organisations undergo a major restructuring,
become more quality sensitive, financially cost-conscious and fully utilise the potential of
the private sector, which can play a major role in introducing the latest technologies,
modern management practices and contemporary financial management.
The private sector should also benefit from a cross-flow of technologies from the public
sector defence industries. The military spends precious foreign exchange to acquire
cutting-edge technologies or spends considerable state resources in generating them inhouse. Most of these technologies have common usage, but remain quarantined and the
civil sectors of the economy fail to benefit fully from them. All this is only possible if
there is a change in mindset in the military bureaucracy, wherein the private sector is
treated as an equal partner.
Current procedures for participation of the private sector are archaic and a major revision
is necessary. There are several countries that have integrated the private sector in defence
production and have institutionalized interaction at regular intervals. The US, Sweden
and Germany are classic examples of the success of the private sector. In these countries
the private sector is producing highly sophisticated weapon systems, making these
nations leaders in research and development. Singapore, Malaysia, Indonesia and India
also have robust defence industries, producing fairly advanced military hardware and
software. Most of these foreign firms are producing both military and civilian products
and thereby optimising their output and reducing overhead costs. The defence economy
should be directed in a way that it becomes the engine of growth rather than a drain on
the already emaciated national economy.

Another major weakness in our system has been that at times, the top postings in defence
production entities have not been on the basis of individuals suitability, but more so as a
parking place before retirement. This practice, obviously, has had a corrosive effect on
the organisations. I am confident that the present military leadership fully realizes the key
role defense production and procurement plays in strengthening national defence. Career
prospects of civilian technical and administrative cadres in Pakistans defence industrial
establishment also need to be revisited. Many of these civilians are highly professional
and have devoted their lives to defence production. Recognition of their merit will attract
better talent to defence establishments. The future of Pakistans defence industrial and
technological capability lies in addressing these multiple problems satisfactorily, so that
we can move towards maximum self-reliance.