Pakistan: Defense Industry Struggles for Seif-Sumfeieru
Pakistan: Defense Indus fry Struggles for Setf-Sufficiency
Pakistani Government has consistently promoted the idea of self-
in conventional armament and will almost certainly continue
toward this goal under Prime Minisier Bhutto. Several wars with
India and arms embargoes by the West have persuaded Islamabad to rely on it; own resources to the greatest possible degree.esult, Islamabad hasefense industry that produces infantry weapons,and equipment. Public and private factories produce roughly one-firth of the military's required arms and equipment andodest amount of foreign exchange. Islamabad wants to increase the portion of arms made or reproduced in Pakistan because it believes its defense industry will gain technological expertise by building sophisticated foreign-designed items.hort war with India. Pakistan's factories could produce much of the ordnance that its forces would require after they draw down peacetime stockpiles.
The armed services arc expanding ihcir ability to service and rebuild foreign-made tanks and aircraft. The capability to rebuild major weapons will almost certainly help insulate Pakistan from foreign pressuresulure war with India be prolonged. Pakistan has probably achieved significant economics through these programs and has earnedgc and good will by rebuilding aircraft for other Muslim nations.
Islamabad has had less success developing advancedtanks, combat aircraft, and missiles. Pakistanmall pool of scientists and technicians available for research in conventional weapons and devotesmall fraction of its defense budget to research andPakistan will not be able to design and build its own tanks or combat aircraft in the foreseeable future. |
Self-sufficiency probably suffers because of Pakistan's perceived need for military preparedness. Convinced that Pakistan must be able to repel anby Indiaoment's notice, military planners have relied for more than three decodes on large standing forces maintained at high levels of readiness. Given Pakistan's poor economy, the resources devoted to maintaining this force leave few for building the nation's defense-industrial base and research establishment.esult. Pakistan'sFUHASl scientific and weapons research effort cannot develop sophiMcfccsfrMlft-ons without extensive foreign assistance. Pj^Pj^B
Pakistan's defense industry will increase theqiuuiiiiyand quality of 'vi^^miiypipdaCci over the next decade,but breakthroughs inor development capabilities ate not likely. The perennial problems of anoyfirly;Jiureaucratic management system artdian underfunded research establishment undoubtedly will persist.esul'titne defense industry will-continue to rely on foreign machinery and advanced technical
: Pakistani officials are sure to.seek reproduction.and rebuilding facilitieseapora already in Pakistan's arsenal and will argue* for fewer resiriciions on sales of high-technology equipment and processes for their jjj^ense industry. Islamabad docs not have incapability to reverse-engineer sophisticated US-made weapons in its arsenal, such as
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DefenMlnduitryGoair
Summary.
Scope
Production Decision Making Production and Coproduclion
Rfbuildinjind
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Outlook and
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ha* been committed to establishing andefense industry since independencehe partition of India left the new nation of Pakistan wiihraction of the British Indian Army's weapons and no capacity to ptoducc arms orPakistani decisionmakers quickly concluded that they needed atmall domestic arms industry. Using- surplus World Warachinery from the Unitedcaptured fromIhe first facilities of the Pakistan Ordnance Factories (POF) were established in tbe. Theindustry developed slowly over tbe next decade wiih assistance from the United Stales, ibe United Kingdom, and West Germany.
Two major wars with India reinforced ihe conviction held by Pakistani planners that national security depends on domestic production of militaryAfter3 war, in which the United States and the United Kingdom embargoed arms lothe Pakistanis turned to China for assistance in building their defense industry. The disastrousof1 conflict deepened Islamabad'son China. With Chineee assistance, iheinuill new arms factories and overhaul facilities for their Chinese-made tanks and aircraft. I
The desite for an indigenous defense industry has survived every change of regime in Pakistan. Prime Minister Bhutlo's new Minister of Slate for Defense, Ghulam Sarwar Cheema, sounded remarkably like ibe laie President Zia's appointees when he told an interviewer In February thai dependence on foreigners forfor state-of-the-artAccording to Cheema, supplying countries could charge exorbitant prices or impose dangerousCheema also worried that Western nations might use their leverage over Pakistan's military to twee an unfavorable settlementonfliit. fmWW
The Defense Industry in Pakistani Economy
Pakistani decisionmakers Justify thr resourcesto the defeme Industry by citing Its benefits for the overall economy. Islamabad can point to Jobs created and export sales at payoffs for ihe expense af seeking Independence in armament. Defense plants have trained tens of thousands of skilled workers and managers. Some have transferred these skills to the private sector. Plana such as those run by the Pakistan Ordnance Factories also producet uch as chemicals and machinebyindustries.
We doubt thai Pakistanomparative advantage in arms production. Considerable subsidization, as well as outright corruption, characterize therelationship with the defense industry. For example, few Pakistani businesses can match the security, pay. and benefits provided by the defense industry. Pakistan Ordnance Factories. In particular, has used this advantage to attract skilledecent article reports that Pakistani workersa Job at POFplum, "probably acauired In part through political patronage. Many technicians spend their entire careers with the organisation, having little tncentire to work In the private sector. We believe subsidized salaries and benefits deplete the national treasury and deprive the private sector of manpower, money, talent and raw materials thai could be more productively employed elsewhere.
Pekiitaa't Military-Industrial Complex
procures arms and equipment fromquasi-private organisations andrivate firms, according to press reports. The private firms are based mainly in Karachi and Lahore and tend to devoteo SO percent of their overall business to defense production. Key institutions are:
/decision Engineering Complex. Karachi.by Pakistan Internationalrun by the Defense Ministry.
Pakistan Machine Tool Factory. Karachi.owned, privatelystablished with Swiss assistance in. advertisesofm recollless rifles.ocketbout IS percent of its capacity used in arms production, according to press reports.
Heavy Industry Complex, Taxlla. Run by Ministry ofncludes Heavy MechanicalHeavy Forge and Foundry, and HeavyFacility, where Army overhauls armoredanufactures machinery ond metal parts for military ond civilian uses, according to pressuilt by China in.
Pakistan Automobile Corporation. Karachi.Isuiu. Htno. and Susuki cars and trucks for military and civilianegun
National Radio Telecommunication Corporation, Haripur. Built. makes military radios, according to military periodicals.
Pakistan Railways. Lahore and Islamabad. Lahore workshop makes mobile bridges for thearnage Factory in Islamabad makes tanktrailers.
Institute of Optronics. Rawalpindi. Producesnight-vision devices and laser ore*'
reports indicate the institute is operated by the Defense Ministry.
Industry Goal*
The defense industry can help insulate Pakistan from the effects of an arms embargohort, intense conflict withtype of war Islamabadmostlthough public and private firms produce onlyercent of Pakisian's arms and
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ordnance factories assemble or
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hc country's ammunition slocks. WeoencvTthey drew upon stockpiled raw materials and movedhour production-could make most of the large quantities of ordnance thai Pakistani forces would need in wartime. In addition. Pakistani facilities can fabricate spare and perform most maintenance on major wea systems such as tanks and combat aircraft.
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Pakistan Ordnance Factories is aggressively seeking customers for Its arms and ammunition. Islamabad Mopes that low pricesno-auestlons-asked" sales policy will attract Third World countries. POP officials boast Pakistan has sold ammunition and infantry weapons to more thanountries. The list comprises mostly Middle Eastern and Asian nations, but the United States and France have alsoPakistani defense-related items, according to Islamabad.
Users of Pakistani ammunition like Its low cost but complain about its Quality.'
efense induMry thathe growth of Pakistan's miliary and civilian lechnological capability and productive capacity.journals report that the government expects that facilities established with foreign assistance willforeign ad vtscrs with aPskittdni tcchnictiint as quickly at possible to ensure technologicalPakistani officials also take pride In their ability to modify and improve foreign-designedas West German assaultsuit Pakistani needs. Islamabad doubtless hopes tbe knowledge gained through producing weapons will bolster the military's research and development and be diffused into the larger economy over the long term.
Pakistani planners view the defense industryaluable source of foreign exchange, and Islamabad aggressively markets its arms and ammunition in the Third World. Cheema said In Februaryurgeoning market for arms among Third World states looking for reliable suppliers of cheap and relatively simple weapons such as small arms ai ammunition.
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production and has sold ammonitton to nations in Asia and the Middle East.
|POF earned about SOTniffionTom
arms exports5 and planned to triple this figure over the next few years. We believe.RELEASE export earnings fluctuate from year loQUt IHMM not be increasing. Lt. Gen. Tatai Masood, at the u'me
bead of POF. said the organization earned only SIS millionfrom exportsccordingress report
press
reports indicate Pakistan and Iran agreed in9 tooint ministerial commission lo expand cooperation in defense production andtraining. We believe Islamabad is trying to revive the close military lie* between Pakistan and Iran that existed before tbe Iranian revolution and seesmilitary production and overhaul capabilities as an incentive to improve relations.
Production Decision Making
Pakistan's defense industry is under the overallof ibe Ministry of Defense. The Secretary for Defense Production heads the Defense Productionoversight body for Pakistan's arms factories, overhaul facilities, and researchPress reports indicate the division projects future procurement requirements and oversees both production and procurement of arms and equipment.
Islamabad has long paid llpservice to the Deed io restructure tbe defense industry to spur greaterand creativity, but it has done Utile lo bring this about. Callsreater reliance on market incentivesllocate cos is and production have been made by Pakistani officials for years. Talat Masood said4 thai Pakistan Ordnance Factories should be run more like commercial enterprises to spur innovation and allocate cats better. I
We estimate thai Ihe defense industry receives abouterceni of Ihe defense budgetimilar share of ihe military's foreign exchangehis nearly equals the share India allocates for arms production and for weapons research andwhich allocation we estimate aterceni of New Delhi's much larger defense budget. Roughly half of Pakistan's defense industry funds go to POF. in our judgment.he last year for which such numbers areerceni of Pakistan's defense budgei went toe'
recent press ankle stated that POFs budget was moreillionOut we believe the published figure excluded POFs foreign exchange allocations.
Pakistan plans to devote about IS percent of itsSin US Foreign Military Sales (FMS)
memorandum of understanding on defense production
cooperation wiih Ihe United Statesj
ikistan hopes to spend some
acility to overhaul iu US-made armored vehicles and on coprodBCtion of2 armored personnel carriers.ntitank missiles, and various types of ammunition.^
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and Coprodactioa
eminar sponsored by the Karachi Chamber of Commerce, according to press reports. Nonetheless, private enterprises produceercent of the arms and equipment manufactured in Pakistan,io press reports. Masood has publiclythat bureaucratic obstacles and theover the sire and duration of orders discourage lone-term business investment j
For their part, [iiincssmen oiamc tne aimculiy of breaking into the industry.8 speech, the president of Ibe Lahore Chamber of Commerce noted the numerous barriers toecent press article claimed the business sector's historically low level* of investment would also limit private defense production. Weall of these problems coniribuie io Ihe private sector's small share of defense production.
Pakistan Ordnancehe heart of the nation's defense industry. Although it is located at several sites, the organization's headquarters is inompany town thai is home to most of the0 POFilitary journal reports POF treats its workers well by Pakistani standards, providing comparatively good pay and benefits. The employees repay POFs benevolentwithecent press article reports lhai many skilled technicians and engineers spend Iheir entire careers wiih ihe organization. Although
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td Pakistan Ordnance Factories is the largest Industrial enterprise In Pakistan. It controlsactories, employsndillion worth of products annually, according to pressreports. Most of the foctc-riesisreatwoh^unton-mem. Others are nearby in thearea. The POP complex Includes:
his facility has produced rifles and machineguns under license from Heckler and Koch of West Germany for more thanean. The Weapons Factory is POF-sboasting com-puter-aiied design processes and computercontrolled machinery.
Small.Arms Ammunition Factory. Makes rifle and pistol rounds and rifle grenades. POF Isotary ammunition plantS firm to replace the aging equipment In this facility.
Mackinegun Factory. This plant makesmm machineguns under license from China, according to press reports.
Artillery Ammunition Factory. Manufactures medh um-eallber artillery ammunition, as well asand aircraft bombs.
' Tank and Antitank Ammunition Factory. Produces lank and antitank munitionsm and larger, according to press reports. Located at Gadwal.
Taagsien Alley Factory. Uses computerisedlo produce penetrators form tank roundm round designed by POF.
Ammunition Factory. Produces artillery and mortar rounds, and fuses for antitank rounds. The facility was built with Ciechoslovak assistance but Is Installing computerised machinery. Located at Sonjwal.
' Eaplealteswo plants at Wnh and Hnvel-Itan make explosives for POF munitions
Propellamt Factory. Producesons of single-base and double-base ammunition propetlant annually witk Chinese assistance, according to press reports. Has static test stands for rocket motors and artillery. Located at Hoveilton.
Clothing Factory. Makes uniforms /or Pakistan's armed services. I
Bran Mill. Produces brass sheets and otherfor ammunition manufactuHng.
Filling Factory. Manufactures explosives andi ammunition.
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lack of belter opportunities in tbe private sector probably helps POF retain its skilled employees, we believe iheir loyaltyey factor in POFs|
POF is undergoing gradual expansion and moderniza-tion. ll grew steadily during the last decade under Talat Masood.l
Press reports say POFs showcase plant, the Weapons Factory, recently attained greater capabilities and efficiency by installing computer numerically controlled machinery. Military journals report thai other POFsome observers have compared with Western facilities in efficiency andbeing modernized or expanded. In the latl few years new capacity has been added several plants, according to press fer.
Several other public and quasi-private organizations produce weapons, equipment, and ammunition. The most modern is the Precision Engineering Complex in
overnment-run research organization and producer of weapons and electronic gear. Another is ihe quasi-private Pakistan Machine Tool Factory, also located in Karachi, which advertises Itsof mortars, recoilleu rifles, and rocket grenade launchers. |
Virtually all of Ihe weapon systems and equipmem produced in Pakistan are made under coproduction agreements, according to open sources. Defense plants have licenses to manufacture orariety of products, including West German small arms;training aircraft, surface-to-air missiles, and air defense radars; Chineseanks and Red Arrow antitanknd US night vision sights. The Heavy Rebuild Facility at Taxila wpj soon2 armored personnel carriers under licenseS firm, according lo press reports.
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Islamabad has been disappointed by it*to find foreign buyers of coproduccd Items, such as Iherainer
has notomplete nice cm In pari becausehortage of scientist) and skilledPakistan has not been able to translate ihe capabilities acquired in coproducing arms into an indigenous capability to acre lop and produce its own weapons. For example. Pakistan bat produced Cobra antitank missiles4 under West German license but has been unable to copy and improve upon Ihe technology embodied in thb obsolescent rJcaiga. PakistaB's -new. indigenously rxwluted- weapons-such as the Half short-range ballot ie missile and the Aua inrface-to-aircopies or modiftca-tiosu of foreign systems and were probably produced with Chinese assistance. In addition, prou report*
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Rebulldiag and Upgrading
Unable to overcome iu dependence on foreignas suppliers of major weapons, Islamabad is seeking increased capabilities to maintain and modify them. Repairs lo foreign weapons are costly and lime consuming when performed in ihe country of origin. Pakistani officials have publicly claimed thatChinese-made aircraft in China routinely takesonths. We believe Pakistan savessums by overhauling tanks and combat aircraft itself. Press reports indicate Pakistani officials hope to2 million by rebuilding their fleet of Chinese-made aircraft. The overall proficiency of Pakistan's
rebuilding facilities is attested to by the fact that Islamabad earns needed foreign exchange by rebuild* ing aircraft for several Arab nations.'H
The Heavy Rebuild Facility at Taxila was built with Chinese assists nee io overhaul Ihe Army's Chinese-madeanks. The plant has rebuiltanksaking or reclaiming most of tbe required pa rut, BBgggggggggggggggggggfJf
Army initially disliked the ideaentral lank overhaul facility, preferring lo perform the work in the armor garrisons, but the quality of Taxila's work has convinced armor officers of ihe plant's usefulness.
Islamabad is0 million to expand tbe TaxiU plant to overhaul and upgrade its US-madeself-propelled artillery, and armored personnel Uf rim>schedule calls for the new facility to beby
For several yean Islamabad has advertised plans lo upgrade most of its early-modelanasS-mm guns and modern sights aad fire-control systems, but we doubt this project- -which would be performed alimminent. In the. Pakistan sought bids for upgrade packages from Western and Cbiacaa firms and held an ineooelusive firing competition among the four team entries in7 Islamabad did notontractor loiuo*
Pakisun Aeronaullcal Complex at KamraFrench- and Chinese-built combat aircraft, aseH as manufacturingrainers underlicense, according io openhe facility was originally established under the CENTO treaty io repair Pakistan's6which have long since been retired. Theis now rebuildinghinese-made aircraft annually, and it make* many of the components used in aircraft overhauls. Pakistan plans to rebuild itsnterceptors al Kamra and,.
In com last io tbe modest ptcAcicncy of Pakistan's arms production and rebuilding efforts, the Pakistanis have accomplished li tile in their research andVirtually all work is conducted by government-runforemost is the Defense Science and Technology Organisation (DESTOJ. Otherorganizations, such as Khan Researchalso engage in research and development work on conventional weapon systems, apparentlyof DESTO. RjaM
The Army and Navy operate other overhaul and upgrade facilities. The Navy's Karachi dockyard overhauls Pakistan's warships and assembled several mini submarines purchased as kits from Italy
Pakistani Research and Development Organization!
Science and Technology Or sanitation (DESTOX CreatedESTO Has three applied science laboratories located in Karachi and the Islamabad area. Most of Its projects Involved reverse-engineering cf foreign weapons and equip-
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rom effectively designing and developing products for mass productlon. H
and Upper Atmosphere Research Commission
(SUPARCOX This entity was formerly port of DESTO but now answers directly to the Defense
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rocket propellants. and lis crowning effort to date has been the Hatf missile, which may soon be placed In series production. SUPARCO also makes chaff dispensing rockets and electronic countergear for the Navy and rockets for the Air Force. It Is headquartered inKarachi andest range near Sonmiani. H
Research Laboratories. Dr. A. Q.akistani publication that his facility has ventured beyond nuclear-related activities to reverse-engineer the Chinese HNS surface-to-air missile and develop other military hardware such as laser rangefinders and unspecified antitank weapons.
. Islamabad's development effort* achieved several minor successes. Khan Research Laboratories finally began producing iu version of the Chinesean-porubk surface-to-air missile system and presented the firat production copies to Ihe Army with
Fanfare.r^ Pakistani innovationsecent military parade,3 armored personnel carriers tilted with Chinese-designedntiaircraft missiles and Red Arrow aniiiank missilesruck-mounted copy of the SovietBM-ZI multiple rocket Uuncher. called the Azar. I
Despite recent successes, there arc seriousia Pakistan's ambitious research andeffort. For exnmple. Islamabad wants to raami-facture its own main battle tank|akBura oeiensecall the tank thend indicate it willam gun, excellent armor, high speed, and an advanced fire-control system.]
Western countries ordinarily take moreecade to develop main battle tanks. Although Talat Masood has said publicly that Pakistan would develop the Unk in partDersbipuropean or Chinese firm, the characteristics of theuch as high speed with sophisiicated armor, would demand production and design capabilities that Pakistan does not have.
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spends little money onecent press article reported that Pakistanercent of its annual defense budget to research and envelopment. We believe thb figure accurate!
ing in annual spending on research and development of leuillion. By comparison, official Indian figures indicate Ihe Indian militaryerceni of iuesearch and development iniscal year.
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PakbUfli commentators publiclyerennial resistance to research ra the military and imcrtiiiiv-ity to the needs and advice of soentbu.believe Islamabad's penchant for concent rating weapons research and de-retoproenl la governmeni agaaoaa may stifle innovation and risk taking on the pan of Pakisuni scieniisU and i
at the Expense of Sell-Sureties* y
Pakistanis are convinced tbey must be ready to repel an attack from Indiaoment's notice,olicy of constant preparedness. To deler New Delhi. Islamabad relies on large standing forces maintained at high levels of readinessuclear weapons program. Moreover, the resource drain is worsened, in our judgment, by Islamabad's goal ofualitative edge over India's numerically stronger forces by acquiring expensive, ilate of-ihe-art
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Why Doefense Industries Lag Bfhind India's?
Indiats existenceation7 with large stores of arms and the coreodem defenst Industry left behind by the United Kingdom. Only after5 Indo-Paklstani war did Pakistan seek to expand the cepabilltlrs of lis small defenseBy lhat time Indiaead over Pakistan that II has no:
India's larger scientific community, combined with farsighted policies, did much to ensure its superiority over Pakistan In defense production. As early as, It placed more emphasis on technical and scientific education than did Pakistan. In addition. Pakistani officials have publicly noted that India has longreater percentage of Its much larger defense budget on research. India has produced and deployed serviceable (although not state-of-the-art) aircraft and worships, and it Is developing ballistic missilesew tank. Pakistan is far behind In all of these areas. I
India's defense Industry has also benefited more from foreign allies than has Pakistan's. Indian factoriesariety of Soviet weapons, including the relatively modernighter-bomber2 lank.
Jy in recent years has Islamabad it IC tHe West for the capability lo coproduce major sophisticated weapons.^
We believe sdf-sufficiency suffers from Pakistan's perception of imminent peril. The resources devoted lo purchasing foreign weapons andtanding military have been diverted from the task of building the defense industry and researchThe military has been forced to choose between purchases of foreign arms and investment in tbe defense industry. The perceived need to match Indian acquisitions has outweighed the desire to build up domestic production. Finally, the nation's moatscientists and engineers are almost certainly drawn
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into nuclear weapons and ballistic missileprograms rather than developing
Outlook and Implications
Over the next decade Pakistan will increase the output and perhaps expand the variety of light arms and equipment produced by its defense industry. In doing so. we believe Islamabad will continueforeign-made machinery and make greater use of computers for design work and other tasks. Pakistan will almost certainly continue to allocate betweenndercent of its military budget to the defense industry. With expanded output and the savings from modernized and more efficient productionwell aa expanded capabilities to rebuild and upgrade foreign-madeshould gain more independencem mem.
Nevertheless, the defense industry is likely to continue lo face many of the problems it has today:
entrenched bureaucracies in the Ministry of DqXPPROVEO FOR RELEASE fense. armed services, and defense industry willQflTfc0 resist reforms that impose greater accountability orarger share of funds to the private sector.
Pakistan's research and development esublislwttnt ti weak and will rem*in ao, and Pakistan is unlikely lo be able io build lit own major weapoa systems or to rerem-eniineer Kipiu ilka ted foreign-made weapons;
Competition froiri other Third World countries thai can match Paiifuui in price and qaalily will limit
^slarn^bad's talcs beyond its present custom-
es jit. wr belief Pa tulan'i defense industry will not tookTcrcnt it the tarn of the century. Islamabad will txaole intake salisfaction bi gaining somewhat more iisdcper^nce from foreign suppliers. Newnheiesa; we bell eve. Pakistan will pay adirect costs as well at higher-prices for weaponry and reduced oulpol in "tbe civilianthis modi-cam of success
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Pakisiani planaers will continue lo seek US assistance in developint^ilKir defense'Industry, as well asat US defense pUnls. We believe Islamabad -ill aagresaively seek USf boirt wtapoas and equiprncni because West European countries rarely offer credits and assistance as good as tboae offered under tbe US Foreign Military Sales program. Islamabad, in our judgment, will also seek additional coproductSonand uSaMtSiaoee In enabling Pakistanis to repair and service US weapons in country. I
Islamabad wffl probably seek ibe most capable US-made equipment available. Pskisianis are likely to protest proposed exponcoolrols on US rrsanulactur-ing machiixry and capaUiiiies. arguing ihatood security rnk and that it is.in Washington's interest tolrortg Pakistani military. We do not believe Pakhtaa will be "hie to reverse-engineer sophisticated USmadeweapons. iuch as6 aircraft or the Harpoon
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