Comment by Riaz Haq on January 24, 2017 at 3:47pm

In July 2016, British newspaper Financial Times report headlined "China urges Pakistan to give army lead role in Silk Road project (CPEC): Squabbles in Islamabad highlight obstacles to Beijing’s plans for transport and energy corridor" said as follows:

"Frustrated with the slow progress on a sprawling, $46bn infrastructure project stretching from China to south Asia, Beijing is seeking to give Pakistan’s army a lead role.... progress has stalled as the two sides work out how to turn the proposals into concrete projects, said Victor Gao, a former Chinese foreign ministry official, with some blaming Pakistan’s competing ministries"..... “Pakistani politicians have squabbled over the route for the CPEC and this may have made people nervous in Beijing,” said a Pakistan government official. “Pakistan is a noisy place politically while the Chinese are not used to harsh disagreements, especially over such a vital project.”

The Pakistan military has thousands of civil, mechanical and electrical engineers with decades of experience in building large infrastructure projects and analysts say the army is well placed to supervise the corridor, according to the Financial Times.

In fact, Pakistan Army's Frontier Works Organization (FWO) is building significant parts of the China-Pakistan Economic Corridor (CPEC). A July 2015 announcement is an illustration of what Frontier Works Organization is doing to advance CPEC:

“The Frontier Works Organization (FWO) has built roads with 502 kilometers length on the western alignment of China Pakistan Economic Corridor (CPEC) to link Gwadar with other parts of the country. The FWO took up the challenge to extend the benefits of Gwadar port to rest of the country by building roads in rugged mountainous terrain and highly inaccessible areas. The gigantic task was undertaken on the directives of Chief of Army Staff General Raheel Sharif."

http://www.riazhaq.com/2016/11/pakistan-army-chief-backer-guarantor...

Comment by Riaz Haq on April 4, 2019 at 11:07am

#Pakistan outlines 5th gen fighter #aircraft industrial aims. "Such large-scale (Project Azm) requires synergetic efforts from a number of #industrial (public and private) and #academic organizations to fulfill the enormous task." #jf17thunder |Jane's 360 https://www.janes.com/article/87669/pakistan-outlines-fgfa-industri...

The Pakistan Aeronautical Complex (PAC) has outlined ambitious plans to support its development of a fifth-generation fighter aircraft (FGFA) - otherwise known in Pakistan as Project AZM.

The PAC enterprise, which is owned and run by the Pakistan Air Force (PAF), has established a new office - the Aviation Research, Indigenization & Development (AvRID) unit - to lead the FGFA programme, it confirmed.

The development programme is supported through Pakistan's development of a new aerospace complex - named 'Aviation City' - that was launched in 2017 to support Project AZM and other national military aerospace requirements.

"The office of DG [Director General] AvRID has been established to transform into reality the [PAF's] air staff vision… with the long-term goal of developing our own fifth generation fighter aircraft (FGFA)," PAC said on its website.

"[The] development of [the] FGFA would be a major national programme that would entail a massive amount of work, not all of which may possibly be carried out within PAC or even within Pakistan.

"Such large-scale development requires synergetic efforts from a number of industrial (public and private) and academic organisations to fulfill the enormous task," it added.

In order to "manage an engineering development programme of this magnitude", effective technical, engineering, and project management processes need to be established, PAC said.

PAC also outlined several specialist project teams that it will establish in collaboration with other national agencies as part of the Aviation City initiative.

These include an engineering management and support office, an Aviation Design Institute, a Mission Electronics Design Institute, an Aero Structures Design Institute, an Advanced Technologies Centre, and a Flight Test Centre.

PAC states that AvRID will collaborate with and leverage the capabilities of these various Aviation City agencies in undertaking Project AZM. "This [will] put together components of industry and academia to build a high-end research centre to enhance indigenisation capability. 

Comment by Riaz Haq on September 15, 2019 at 4:21pm

#Pakistan to corporatize State #Defense Enterprise Heavy Industries #Taxila. The move to corporatize HIT will enable the enterprise to more easily enter joint ventures (JVs) with national and foreign firms.| Jane's 360 https://www.janes.com/article/90808/pakistan-to-corporatise-heavy-i...

Pakistan's Senate passed legislation in late August to support the transformation of state defence enterprise Heavy Industries Taxila (HIT) into a corporate entity. The move is in line with Pakistan's efforts to spur capability developments in its national defence industry.

The legislation - the Heavy Industries Taxila Board (Amendment) Bill 2019 - will result in HIT, a specialist in military land systems, becoming a limited company. The bill was approved earlier this year by Pakistan's National Assembly and was referred to the Senate for consideration in May.

In approving the bill, the Senate's Standing Committee on Defence Production said in a report that the move to corporatise HIT will enable the enterprise to more easily enter joint ventures (JVs) with national and foreign firms.

The committee said these JVs would be in commercial sectors - including the production of automobiles, trucks, and wagons - and that resulting revenues, investments, and technologies would benefit HIT's defence production activities. However, the committee also warned that such commercial activities should not be to the detriment of defence production.

According to the committee, other objectives of the move to corporatise HIT include enabling the enterprise to earn revenues to subsidise Pakistan's defence budget; support national efforts to "move incrementally towards self-sustenance" in the defence sector; support private-sector defence industrial expansion in Pakistan; and "help bring in the latest technologies" into the country to benefit defence.

HIT is one of Pakistan's most important defence enterprises. The organisation specialises in upgrades and manufacturing a range of military vehicles including main battle tanks (MBTs), armoured personnel carriers, and artillery, as well as military vehicle engines and related components and associated equipment.

Its most important programmes include the production of Al-Khalid-I MBTs and the development of Al-Khalid-II MBTs, both for the Pakistan Army.

Comment by Riaz Haq on July 22, 2022 at 6:15pm

Pakistan's military-run enterprises need upgrade to revive economy
Corporate empire has potential to be globally competitive

By Uzair Younus


https://asia.nikkei.com/Opinion/Pakistan-s-military-run-enterprises...


Pakistan's economy is facing another crisis as the country reaches a staff-level agreement with the International Monetary Fund to resume the support program that was suspended earlier this year. The finalization of the agreement will unlock inflows of almost $1.2 billion, critical to helping stabilize the country's economy.

This latest crisis is part of the decades-long economic decline of the country, which has been captured by a kleptocratic elite. This system is underpinned by Pakistan's powerful military, which operates a multibillion-dollar corporate empire across various sectors.

To many observers, the military's dominant role in the economy must be curtailed if Pakistan is to achieve sustainable growth. But well-meaning as they might be, these efforts have consistently failed to date, meaning that Military Inc. continues to be the dominant player in Pakistan's economy.

It is time to accept that rather than trying to cut this empire down to size, it may be more fruitful to develop Military Inc. 2.0: a corporate empire that is globally competitive.

Pakistan's military began playing a role in the economy soon after independence. The construction of the 805-km cross-border Karakoram Highway in the Himalayas was a major inflection point. The Frontier Works Organization was formed then with the mission to construct the highway on the Pakistani side.

Today, military-run organizations have their tentacles spread across the entire economy, with the military-owned Fauji Foundation being one of the largest conglomerates in the country. The government has exempted both the Army Welfare Trust and the Fauji Foundation from income taxes, giving them an edge over privately owned companies.

The military also operates housing developments across the country, with the Defence Housing Authority (DHA) a dominant force in the country's real estate sector. While the initial aim was to develop homes for serving and retired military personnel, DHA has since evolved into a multibillion-dollar entity with a presence in all major cities.

The military's economic footprint, however, is indicative of broader economic issues plaguing Pakistan. For decades, Pakistan's civilian and military elites have extracted wealth by engaging in highly protected, low-productivity sectors. As a result, Pakistani businesses are both globally uncompetitive and provide shoddy services to domestic consumers.

An example is the DHA project in Karachi, built on land reclaimed from the Arabian Sea. The predominant role enjoyed by the military meant that development of the DHA site occurred without proper access to proper stormwater drainage, resulting in multimillion-dollar homes, paid for in cash, routinely being flooded during monsoon rains.

Political volatility and instability have further compounded the problems, leading to an anemic rate of foreign direct investment, particularly in export-oriented sectors. The result: recurring balance of payments crises that require bailouts.

To emerge from this crisis, Pakistan's military must learn from its strategic ally China. While the Chinese regime also began with military-run organizations developing public infrastructure, over the decades, it has developed companies that have a more global outlook.

In addition, China focused on improving quality by leveraging technology while also investing in global best practices. This ensured that the country built globally competitive businesses that enhanced China's technological reach, such as telecommunications group Huawei Technologies.

Comment by Riaz Haq on July 22, 2022 at 6:15pm

Pakistan's military-run enterprises need upgrade to revive economy
Corporate empire has potential to be globally competitive

By Uzair Younus


https://asia.nikkei.com/Opinion/Pakistan-s-military-run-enterprises...


Pakistan's military would do well to mimic China's strategy to become globally connected, competitive and innovative.

Such a reconfiguration may solve Pakistan's macroeconomic challenges and recurring external crises, as the military is finding it difficult to muster resources required to compete with an India that is growing at a faster pace and rapidly modernizing its military. This is tilting the balance of power in the region toward India, creating national security risks for Pakistan.

Critics will argue that reorienting the military's corporate empire will only worsen the challenges facing Pakistan's floundering democracy. This concern is valid, but Pakistan's growing economic challenges mean that it is time to prioritize sustainable growth and socioeconomic development.

Changing the military's corporate approach is likely to create the space for broader economic reforms that are urgently needed to end Pakistan's protracted economic decline.

The experience of the last few years shows that there is, at least in the near term, no political party capable of challenging and dislodging the military from its dominant role.

The next best alternative is to leverage the military's economic empire to transform the country's economy. But the question is: Do Pakistan's generals have it in them to reform in a way that generates wealth for their country?

With millions of younger Pakistanis joining the workforce and failing to find jobs, the time for a different approach is now.

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