{"id":55370,"date":"2015-12-04T03:26:40","date_gmt":"2015-12-04T03:26:40","guid":{"rendered":"https:\/\/one.sightlinemg.com\/defensenews\/uncategorized\/2015\/12\/04\/pakistan-seeks-to-boost-private-industry-participation\/"},"modified":"2026-08-08T00:04:18","modified_gmt":"2026-08-08T00:04:18","slug":"pakistan-seeks-to-boost-private-industry-participation","status":"publish","type":"post","link":"https:\/\/one.sightlinemg.com\/defensenews\/industry\/2015\/12\/04\/pakistan-seeks-to-boost-private-industry-participation\/","title":{"rendered":"Pakistan Seeks To Boost Private Industry Participation"},"content":{"rendered":"\n<p>ISLAMABAD \u2014\u00a0Pakistan hopes more private sector participation in the defense industry will increase production and exports,\u00a0said\u00a0<span class=\"rte rte-comment\">in the sector. This was stated by <\/span>President Mamnoon Hussain at a seminar on public-private partnerships.<\/p>\n\n\n\n<p>The <span class=\"rte rte-comment\">as he addressed a <\/span>two-day seminar, <span class=\"rte rte-comment\">on<\/span>\u00a0&#8220;Public-Private Partnership in Defence Production and Export,&#8221;\u00a0was hosted by the Defence Export and Promotion Organization (DEPO) and <span class=\"rte rte-comment\">held here that <\/span>concluded Wednesday.\u00a0<\/p>\n\n\n\n<p>The seminar explored options for improving such a partnership and more effective related policies.<br\/> \u00a0<br\/> This is the latest effort by <span class=\"rte rte-comment\">endeavor of <\/span>DEPO and the government to increase defense exports. A new exhibition center featuring indigenous defense products was opened at DEPO&#8217;s Islamabad offices in September.<br\/> \u00a0<br\/> Addressing the seminar, <span class=\"rte rte-comment\">President <\/span>Hussain said there was a need to improve defense production capabilities to ensure economic stability. This is needed because of what he described as <span class=\"rte rte-comment\">, he said, He said this was necessitated by <\/span>aggressive military doctrines and the import\u00a0of high-tech weaponry into the region \u2014\u00a0<span class=\"rte rte-comment\">that threatened to disturb peace and stability, (<\/span>a thinly veiled reference to India&#8217;s military modernization and &#8220;Cold Start&#8221;\u00a0doctrine.<br\/> \u00a0<br\/> Hussain added that\u00a0a public-private partnership (PPP) between state-owned and private industry would improve <span class=\"rte rte-comment\">deliver the necessary improvements in <\/span>the industry. He cited the example of Turkey in implementing a more effective PPP and increasing defense exports.<br\/> \u00a0<br\/><span class=\"rte rte-comment\">He however partly blamed inadequate marketing for the underperformance of Pakistan&#8217;s defense industry to date.<\/span>Islamabad Chamber of Commerce &amp; Industry spokesman Mohammed Ramazan told Defense News the government could boost <span class=\"rte rte-comment\">allow more <\/span>private sector involvement by removing restrictions on manufacturing defense products to ensure the success of such a PPP.<br\/> \u00a0<br\/> &#8220;Presently, most defense production is in the public sector with very little in the private sector. This needs to be opened up, not 100 <span class=\"rte rte-comment\">one hundred <\/span>percent, but perhaps a little. The private sector has the best business practices and can contribute to defense exports,&#8221;\u00a0he said.<br\/> \u00a0<br\/> He cited the US as an example.<br\/> \u00a0<br\/> &#8220;In the US, for example, their private sector is fully involved and even making aircraft. &#8230; Restrictions need to be removed to allow the private sector to play its role as well.&#8221;<br\/> \u00a0<br\/> However, Haroon Qureshi, managing director of East West Infiniti, an Islamabad-based defense electronics and radio communications design and manufacturing company, who was present at the seminar, said <span class=\"rte rte-comment\">believes <\/span>many issues need to be addressed.<br\/> \u00a0<br\/> He has long highlighted inadequacies in project management as a restricting factor for the private sector.<br\/> \u00a0<br\/><span class=\"rte rte-comment\">He believes <\/span>A model based more on the US practice of requesting for tenders, and then selecting two for prototype manufacture in a &#8220;playoff&#8221;\u00a0is far more efficient than the current practice, which does not fund private sector defense equipment development initiatives.<br\/> \u00a0<br\/> He also sees <span class=\"rte rte-comment\">does though see <\/span>merit in the Turkish experience. <span class=\"rte rte-comment\">(outlined in the seminar) that Pakistan can emulate.<\/span><br\/> \u00a0<br\/> &#8220;The Turks said special rules had to be made for Turkish private sector involvement several years ago that actually gave the private sector reasons to come into the military sector. Current Turkish defense industry rules state that\u00a020 percent of all military industrial participation must go to SMEs.&#8221;<br\/> \u00a0<br\/> Furthermore, Qureshi said <span class=\"rte rte-comment\">believes <\/span>there needs to be a shakeup at the helm of the defense promotion effort.<br\/> \u00a0<br\/> &#8220;Our [strategy for]<span class=\"rte rte-comment\">capability of<\/span> exports is misdirected. Most of this is because export efforts are all being manned by people in uniform; if we were to capitalize the worth of our conventional defense industry, <span class=\"rte rte-comment\">i.e. [aircraft manufacturing factory], [Air Weapons Complex], [Pakistan Ordnance Factories], [Pakistan Navy Dockyard] <\/span>they should be exporting over <span class=\"rte rte-comment\">US<\/span>$2 billion-$3 billion per year. But none are exporting anything worth writing,&#8221;\u00a0he said.<\/p>\n\n\n\n<p>Adding, &#8220;Most news reports are for internal consumption and possible promotion to the next rank.&#8221;<br\/> \u00a0<br\/><span class=\"rte rte-comment\">He says <\/span>Deep-seated reform <span class=\"rte rte-comment\">is <\/span>also is required in the design cycle and long-term investment.<br\/> \u00a0<br\/> &#8220;Even in the design cycle, the capability of equipment at the correct price with competitive features and reliability, and delivery in a realistic time frame, need to be worked with the commercial marketing network &#8230; the list of what needs to be done to achieve exports needs to be done,&#8221;\u00a0he said.<br\/> \u00a0<br\/> &#8220;Most long-term investment by the private sector is not forthcoming as the government and even the public sector defense industry, who subcontract work, look at the entire matter as supply orders\u00a0governed by the Public Procurement Regulatory Authority, which provides guidelines for procurement\u00a0by public entities; it does not cover development and production for military subsystems or the end product,&#8221;\u00a0he said.<br\/> \u00a0<br\/> As such &#8220;the current purchase regulations do not allow establishment of an inland letter of credit for orders placed with local industry.&#8221;<br\/> \u00a0<br\/><span class=\"rte rte-comment\">Qureshi highlighted there had been <\/span>Attempts at reform have been unsuccessful, Qureshi said.\u00a0<span class=\"rte rte-comment\">to change matters, but they were unsuccessful due to entrenched government practice.<\/span><br\/> \u00a0<br\/> &#8220;Recently retired Secretary of Defense Production Lt. Gen Tanvir Tahir, in his answers to questions, said he was unable to get any rules changed or modified in the procurement process to entice Pakistan&#8217;s industry to produce goods for military applications, due to very bad government rules of engagement.&#8221;<br\/> \u00a0<span class=\"rte rte-comment\">Unfortunately, Qureshi says he does not expect anything to change and this was echoed in the seminar.<br\/> \u00a0<br\/> &#8220;Dr. Ishrat Hussain, ex-governor state bank, head of the Institute of Business Administration Karachi was very well aware of the Pakistani engineering scenario, and said words in his speech that almost meant &#8216;nothing will change&#8217; unless rules of engagement and payments are changed. These sentiments were shared by all from the private sector.&#8221;<\/span><br\/> \u00a0<br\/> Email:\u00a0<a href=\"mailto:uansari@defensenews.com\">uansari@defensenews.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Pakistan hopes more private sector participation in the defense industry will increase production and 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