Market Report, "Pakistan Defence & Security Report Q4 2014", published

Following the collapse of peace talks between the government and the Pakistan Taliban, and the decision to begin a military offensive in North Waziristan, we expect an escalation in domestic security threats though 2014 and into 2015. The government plans to deploy 150,000 troops to the region until 2017, which will increase pressure on military resources. The government has increased the defence budget for the current financial year, but additional funds may be required to quell the heightened security threat. Meanwhile, the increased cost of supplying the army in its ground offensive could detract funds away from the military procurement programme.

Defence spending is highly skewed in favour of the Pakistan Army, which is the primary branch of the armed forces. Meanwhile, the Pakistan Navy and Pakistan Air Force play a smaller role in national defence given the nature of strategic threats, which are primarily land based. However, defence chiefs have highlighted weakness in air and naval hardware in Pakistan, which is losing ground to India with regards to overall military capability. As a result, aircraft, ship, and submarine purchases dominate the current procurement plan.

Full Report Details at
- http://www.fastmr.com/prod/872669_pakistan_defence_security_report_q4_2014.aspx?afid=301

The indigenous defence industry does not have the capacity to design and manufacture sophisticated weaponry such as this, and relies on international partnerships to supply the military. China is the main partner, supplying the majority of imported arms and licensing designs to Pakistani defence corporations which are manufacturing hardware, such as the JF-17 Thunder. The Pakistan Aeronautical Complex is manufacturing 50 Jets for the Pakistan Air Force, and is also looking to export to partners in Saudi Arabia, and potentially Myanmar. This will become the first major export for the Pakistani defence industry, which is largely geared towards supplying indigenous forces, with the exception of Heavy Industries Taxila (HIT) which has exported main battle tanks in the past.

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