Pakistan aims to boost defence exports with new government body

Pakistan intends to bolster its arms exports through a new government body meant to attract foreign direct investment and ease the manner of doing business, according to Federal Planning Minister Ahsan Iqbal.

A key aspect of this approach was to use a single body, instead of multiple organizations, in order to cut down red tape, Defense News reports.

Iqbal spoke Wednesday at a news conference in Pakistan about the Special Investment Facilitation Council, or SIFC, which was formed in June to establish economic policies to “ensure policy predictability, continuity and effective implementation to revive the economy.”

Alongside defense production, SIFC will also focus on agricultural, energy, information technology, minerals and mining sectors.

Defense manufacturing is handled by the Ministry of Defence Production, which previously proposed similar measures to boost private sector participation.

A spokeswoman with the ministry told Defense News that the local defense sector is “considering joint projects and collaborations with international partners in government-to-government and business-to-business models. She also said private sector startups would be “facilitated through [a] one-window approach.”

The spokeswoman declined to provide additional details of the SIFC proposal or what has already been done in this regard, instead directing Defense News to the SIFC Secretariat.

Fida Muhammad Khan, an analyst and lecturer at the Pakistan Institute of Development Economics think tank, expressed skepticism of the SIFC endeavor.

Claiming regulatory bodies “don’t solve problems,” he highlighted the large number that previously existed and primarily served to put pressure on the exchequer. He also said SIFC is likely to be “hijacked” by military personnel on deputation to them.

He also questioned what the existing Defence Export Promotion Organisation — which claims to “provide active support to our defence manufacturing/service sector and the export chain” — has done to date, and noted bodies already exist to promote defense exports, including the Defence Production and Foreign Affairs ministries, the Pakistan Aeronautical Complex, the Pakistan Ordnance Factories, and Heavy Industries Taxila.

Pakistan should look to France as an example, he added, as the president there travels extensively in support of defense deals — something Pakistan’s political leadership should do to demonstrate similar commitment in an environment of quid pro quo arrangements and incentives.

The analyst also recommended a wider effort involving economists, social scientists, and think tanks to ensure policy is informed by research and specialists, as well as a looser grip by the state on the defense industry in order to attract new investments.