What's new

PAKISTAN TO SPEND $12 BILLION ON ARMS IN 2016-2024

BetterPakistan

SENIOR MEMBER
Oct 30, 2014
2,907
-2
2,221
Country
Pakistan
Location
Pakistan
IHS Jane’s has projected that Pakistan could spend $12 billion U.S. on big-ticket weapon systems in the period of 2016 to 2024. For prospective arms vendors, the market of focus in Pakistan will likely center on a number of major land armament programs, such as main battle tanks (MBT), self-propelled howitzer (SPH), armoured personnel carriers (APC), and light armoured vehicles.

In terms of MBTs, the al-Khalid II is expected to be the leading program (at a projected value of $1 billion U.S.). The Talha tracked APC will continue to be inducted as well (at a value of $1.1 billion U.S.). According to Jane’s, possible “opportunities exist for a self-propelled mortar, an APC and a SPH” at values of $1.5 billion, $1.1 billion and $844 million, respectively.

Jane’s also noted that Pakistan’s economy is projected to continue struggling, with its GDP growth rate anchored to a little over 3.5% over the next five years. Despite that, Pakistan has increased its defence expenditure for the coming year from 2.3% of its GDP to 2.54%.

Comment and Analysis

Although Pakistan’s projected expenditure rate is on the lower side compared to that of other powers in Asia and the Middle East, it is a sizable amount in its own right. Pakistan is evidently looking to reinvest most of that money back into its domestic industry, specifically existing solutions.

The al-Khalid II main battle tank (MBT) has returned to the development pipeline. It is not a new program, but changes in the technology market will likely impact the improvements it will exhibit over the al-Khalid and al-Khalid I MBTs. For example, Pakistan could potentially consider acquiring Ukraine’s recently revealed 1500hp diesel engine, which is derived from the KMDB 6TD-2 currently used on the al-Khalid. Pakistan may also try to procure some of the technology onboard Turkey’s Altay MBT, most notably its electronics and Akkor self-protection suite, which is capable of soft and hard-kill defensive measures.

Regarding the possibility of Pakistan inducting another APC type. In 2015, Pakistan was looking to finalize the purchase of the NORINCO VN-1 8×8 wheeled APC with local licensed production from China. It is likely that Jane’s is referring to this program, though at this stage other companies, such as Paramount Group with its Mbombe 8, may be looking to make an entry.

The possible self-propelled howitzer (SPH) acquisition is interesting. The projected value of the program – at $844 million U.S. – suggests that around 200 machines could potentially be procured. NORINCO’s PLZ-52 or PLZ-05 would be the likely frontrunners of such a requirement, assuming a tracked system is being sought. Competitors could include the Turkish T-155 Firtina, which is derived from the South Korean K9 Thunder, and surplus American M109s (which would add to the Army’s existing force of M109A2/A5s).

In the less likely case that a wheeled SPH is being sought, the Army would be best served to bind such a decision to its selection of a wheeled APC, so as to achieve platform commonality and save in maintenance and logistical costs. In this case, it would basically need a vendor to provide the turret and cannon. It can source its entire set of solutions from China, though the South African industry could potentially offer a competing alternative. In the case of self-propelled mortar, if a wheeled system is being sought, then it would be best to base it on the wheeled APC platform. If a tracked system is on the cards instead, then the best course of action would be to acquire a turret for the Talha APC.

It is important to note that armour and vehicle programs will only take up a portion of the $12 billion U.S. that is expected to be spent. Most of this money has likely been locked to long-term programs, such as the Pakistan Air Force (PAF)’s JF-17 Thunder and the Pakistan Navy (PN)’s next-generation submarines.

That does not mean that there is a lack of opportunity for prospective defence vendors. For example, with the PAF not being able to procure new-built F-16s on a subsidized basis from the U.S., the JF-17 Block-III may be positioned as a far more critical acquisition. In turn, the PAF may be on the look for qualitatively stronger sub-system offerings that it could pair with the fighter. This could be an opportunity for the likes of Aselsan, Leonardo-Finmeccanica and Denel Dynamics.

Similar prospects could be present in the PN’s submarine program, especially since it is poised to contract the Turkish industry to upgrade its Agosta 90B submarines. It is almost certain that the upgrade will be in the area of electronics, which could potentially make their way onto the PN’s eight forthcoming Chinese origin submarines as well. The wild card in the PN’s case would be surface warships, an area which could result in a number of new vessels if long-term financing support is secured. It is also unclear to what extent Pakistan Army Aviation will figure in this expenditure run, though it does have 15 Bell AH-1Z Viper dedicated attack helicopters in the pipeline.

Although there has been some noise about Pakistan seeking a new fighter type in lieu of new-built F-16s, this idea is largely being pushed by the Pakistani government (via its statements to the effect). The PAF has not signalled such plans, at least in the current term (2016-2024). In other words, the prospect of the Su-35 or any other platform in the short and medium-term is a wild card bet, one dependent on numerous factors, such as Pakistan’s economic prospects and its foreign relations clout. That said, used F-16s will enter the pipeline, and a market for the American defence industry may emerge via the possible upgrades the PAF may implement onto those F-16s.

Besides the JF-17 and used F-16s, the one program of significance that will gradually gain momentum is the PAF’snext generation fighter, a program that the PAF leadership hopes will impart genuine research and development as well as advanced industry (e.g. manufacturing and materials fabrication) growth in Pakistan. Without a tangible design, the prospect of direct commercial engagement is limited, though depending on the PAF’s execution, ‘softer’ procurements in the form of capacity building, consulting and infrastructure development could be on the horizon. Large expenditure will likely be seen after 2020.

Finally, it must be noted that Pakistan’s projected expenditure is not set in stone. The country’s uncertain economic outlook and security climate can have significant impacts on the armed forces’ development goals. The spending potential could very well decline. Of course, one should also keep an eye on the necessary changes Pakistan would need in order to sustainably increase its defence expenditure.

With two major events occurring by 2024, i.e. the possible selection of a new Chief of Army Staff (or an extension of the current) and the 2018 general elections, reflection ought to be given to what is necessary for positive change. Significant direct expenditure is committed towards the counter-insurgency campaign in the Federally Administered Tribal Areas (FATA). A conclusion to the conflict would yield direct peace dividends. If compounded by a competent, forthright and nationally invested political leadership, one that succeeds in implementing strong anti-corruption policies, regulatory and bureaucratic efficiency, and a principled foreign relations strategy, Pakistan’s overall direction will improve substantially. Conversely, failure in these areas will have negative results.

Source
 

Zarvan

ELITE MEMBER
Apr 28, 2011
52,144
85
59,621
Country
Pakistan
Location
Pakistan
IHS Jane’s has projected that Pakistan could spend $12 billion U.S. on big-ticket weapon systems in the period of 2016 to 2024. For prospective arms vendors, the market of focus in Pakistan will likely center on a number of major land armament programs, such as main battle tanks (MBT), self-propelled howitzer (SPH), armoured personnel carriers (APC), and light armoured vehicles.

In terms of MBTs, the al-Khalid II is expected to be the leading program (at a projected value of $1 billion U.S.). The Talha tracked APC will continue to be inducted as well (at a value of $1.1 billion U.S.). According to Jane’s, possible “opportunities exist for a self-propelled mortar, an APC and a SPH” at values of $1.5 billion, $1.1 billion and $844 million, respectively.

Jane’s also noted that Pakistan’s economy is projected to continue struggling, with its GDP growth rate anchored to a little over 3.5% over the next five years. Despite that, Pakistan has increased its defence expenditure for the coming year from 2.3% of its GDP to 2.54%.

Comment and Analysis

Although Pakistan’s projected expenditure rate is on the lower side compared to that of other powers in Asia and the Middle East, it is a sizable amount in its own right. Pakistan is evidently looking to reinvest most of that money back into its domestic industry, specifically existing solutions.

The al-Khalid II main battle tank (MBT) has returned to the development pipeline. It is not a new program, but changes in the technology market will likely impact the improvements it will exhibit over the al-Khalid and al-Khalid I MBTs. For example, Pakistan could potentially consider acquiring Ukraine’s recently revealed 1500hp diesel engine, which is derived from the KMDB 6TD-2 currently used on the al-Khalid. Pakistan may also try to procure some of the technology onboard Turkey’s Altay MBT, most notably its electronics and Akkor self-protection suite, which is capable of soft and hard-kill defensive measures.

Regarding the possibility of Pakistan inducting another APC type. In 2015, Pakistan was looking to finalize the purchase of the NORINCO VN-1 8×8 wheeled APC with local licensed production from China. It is likely that Jane’s is referring to this program, though at this stage other companies, such as Paramount Group with its Mbombe 8, may be looking to make an entry.

The possible self-propelled howitzer (SPH) acquisition is interesting. The projected value of the program – at $844 million U.S. – suggests that around 200 machines could potentially be procured. NORINCO’s PLZ-52 or PLZ-05 would be the likely frontrunners of such a requirement, assuming a tracked system is being sought. Competitors could include the Turkish T-155 Firtina, which is derived from the South Korean K9 Thunder, and surplus American M109s (which would add to the Army’s existing force of M109A2/A5s).

In the less likely case that a wheeled SPH is being sought, the Army would be best served to bind such a decision to its selection of a wheeled APC, so as to achieve platform commonality and save in maintenance and logistical costs. In this case, it would basically need a vendor to provide the turret and cannon. It can source its entire set of solutions from China, though the South African industry could potentially offer a competing alternative. In the case of self-propelled mortar, if a wheeled system is being sought, then it would be best to base it on the wheeled APC platform. If a tracked system is on the cards instead, then the best course of action would be to acquire a turret for the Talha APC.

It is important to note that armour and vehicle programs will only take up a portion of the $12 billion U.S. that is expected to be spent. Most of this money has likely been locked to long-term programs, such as the Pakistan Air Force (PAF)’s JF-17 Thunder and the Pakistan Navy (PN)’s next-generation submarines.

That does not mean that there is a lack of opportunity for prospective defence vendors. For example, with the PAF not being able to procure new-built F-16s on a subsidized basis from the U.S., the JF-17 Block-III may be positioned as a far more critical acquisition. In turn, the PAF may be on the look for qualitatively stronger sub-system offerings that it could pair with the fighter. This could be an opportunity for the likes of Aselsan, Leonardo-Finmeccanica and Denel Dynamics.

Similar prospects could be present in the PN’s submarine program, especially since it is poised to contract the Turkish industry to upgrade its Agosta 90B submarines. It is almost certain that the upgrade will be in the area of electronics, which could potentially make their way onto the PN’s eight forthcoming Chinese origin submarines as well. The wild card in the PN’s case would be surface warships, an area which could result in a number of new vessels if long-term financing support is secured. It is also unclear to what extent Pakistan Army Aviation will figure in this expenditure run, though it does have 15 Bell AH-1Z Viper dedicated attack helicopters in the pipeline.

Although there has been some noise about Pakistan seeking a new fighter type in lieu of new-built F-16s, this idea is largely being pushed by the Pakistani government (via its statements to the effect). The PAF has not signalled such plans, at least in the current term (2016-2024). In other words, the prospect of the Su-35 or any other platform in the short and medium-term is a wild card bet, one dependent on numerous factors, such as Pakistan’s economic prospects and its foreign relations clout. That said, used F-16s will enter the pipeline, and a market for the American defence industry may emerge via the possible upgrades the PAF may implement onto those F-16s.

Besides the JF-17 and used F-16s, the one program of significance that will gradually gain momentum is the PAF’snext generation fighter, a program that the PAF leadership hopes will impart genuine research and development as well as advanced industry (e.g. manufacturing and materials fabrication) growth in Pakistan. Without a tangible design, the prospect of direct commercial engagement is limited, though depending on the PAF’s execution, ‘softer’ procurements in the form of capacity building, consulting and infrastructure development could be on the horizon. Large expenditure will likely be seen after 2020.

Finally, it must be noted that Pakistan’s projected expenditure is not set in stone. The country’s uncertain economic outlook and security climate can have significant impacts on the armed forces’ development goals. The spending potential could very well decline. Of course, one should also keep an eye on the necessary changes Pakistan would need in order to sustainably increase its defence expenditure.

With two major events occurring by 2024, i.e. the possible selection of a new Chief of Army Staff (or an extension of the current) and the 2018 general elections, reflection ought to be given to what is necessary for positive change. Significant direct expenditure is committed towards the counter-insurgency campaign in the Federally Administered Tribal Areas (FATA). A conclusion to the conflict would yield direct peace dividends. If compounded by a competent, forthright and nationally invested political leadership, one that succeeds in implementing strong anti-corruption policies, regulatory and bureaucratic efficiency, and a principled foreign relations strategy, Pakistan’s overall direction will improve substantially. Conversely, failure in these areas will have negative results.

Source
Countries spend 12 billion dollars on one deal and we would spend it on various deals
 

BetterPakistan

SENIOR MEMBER
Oct 30, 2014
2,907
-2
2,221
Country
Pakistan
Location
Pakistan
Countries spend 12 billion dollars on one deal and we would spend it on various deals
Who has gonna pay for it? Govt? or military will pay for it from defense budget?

Is defense budget used to procure defense equipments?
 

Black Mamba1

BANNED
Jan 1, 2014
509
-3
487
Country
India
Location
Thailand
Feeling bad to see the price Pakistani (and Indian) people are paying for not having cordial relationship bilaterally . When would we understand that this will only add to the wealth of army men and political people at the expense of our kids' wellbeing :(

Hope we will understand it soon, and compel out govt together to spend these money for welfare instead of animosity :cheers:. At the end of the day, this is our hard earned tax money yaar

Keep minimum deterrence and go for all out development----- this should be policy of both the countries
 

Muhammad Omar

ELITE MEMBER
Feb 3, 2014
13,553
15
20,857
Country
Pakistan
Location
Pakistan
Well in this Budget The Procurement budget was $5.6 Billion isn't it?? our total budget is now $8.6 Billion
 

Max Pain

FULL MEMBER
Aug 14, 2014
1,362
0
954
Country
Pakistan
Location
Pakistan
Feeling bad to see the price Pakistani (and Indian) people are paying for not having cordial relationship bilaterally . When would we understand that this will only add to the wealth of army men and political people at the expense of our kids' wellbeing :(

Hope we will understand it soon, and compel out govt together to spend these money for welfare instead of animosity :cheers:. At the end of the day, this is our hard earned tax money yaar

Keep minimum deterrence and go for all out development----- this should be policy of both the countries
the way I see it, there only shall be peace when the literacy rate of both countries will be above 95 percent,
we'll then think beyond our issues over a piece of land.
as of now , we and our generations will keep on hating each other and spend $$ in the name of defense.
 

BetterPakistan

SENIOR MEMBER
Oct 30, 2014
2,907
-2
2,221
Country
Pakistan
Location
Pakistan
those $5.6 Billion are for procurement and are different from $8.6 billions..
$5.6 billion is a lot of amount and i don't see that much spending because there is not a single news of defense procurement except for used f-16s from jordan
 

PDF

STAFF
May 1, 2015
2,989
13
4,393
Country
Pakistan
Location
Pakistan
Not a lot of amount keeping in view our threats. We have also to fight terrorists, as well as not to be a headache for our economy. Hope everything turns out well...
 

Muhammad Omar

ELITE MEMBER
Feb 3, 2014
13,553
15
20,857
Country
Pakistan
Location
Pakistan
that $5.6 billion will be used from $8.6 billion? What?



not $7 billion, $8.6 billion for fiscal year 2016-17
ISLAMABAD: The federal cabinet on Monday approved a deficit budget of Rs4.42 trillion which, like proposals in previous years, lacks major policy initiatives to put the country on the path to sustainable economic growth.

The proposals appear to strike a balance between fiscal consolidation, imposed by the International Monetary Fund, and some incentives for the industrial sector. It was approved by the cabinet during a meeting which was presided over by Prime Minister Nawaz Sharif via video link from the Pakistan High Commission in London, a first in the country’s history.

Rs1.67 trillion development budget approved

The government expects tax revenues to climb to Rs3.635 trillion, a new historical level, thanks to heavy indirect taxation.

To boost earnings for next year, the budget proposes Rs170 billion in new taxes which will largely overburden existing taxpayers.

Further, the government is proposing to increase defence spending by over one-tenth to Rs860 billion, up by Rs79 billion from last year.

The federal cabinet has also approved measures to further limit tax-free cash withdrawals from banks by linking the Rs50,000 limit to one identity card against the current practice of unlimited banks accounts.

Other measures approved will see tax hikes on a string of consumer items. The super tax has also been extended for another year.

Tax reliefs, albeit for select sectors, include lower rates for Pakistan Cricket Board. Tax benefits will also be extended for industrialists.

While Nawaz specially asked for a special package for farmers including substantial subsidy on urea, budgetary proposal for abolishing sales tax on pesticides has been approved.

Rs1.7t development budget proposed for upcoming fiscal

After the federal cabinet’s approval, Finance Minister Ishaq Dar will present the budget in the National Assembly on Friday.

Expenditure

The total estimated size of federal expenditures is over Rs4.42 trillion, around 8% higher than last year’s budget of Rs4.1 trillion. The government will borrow Rs1.6 trillion, 4.8% of Pakistan’s gross domestic product (GDP), to run the country.

Despite the large deficit, the four provinces are expected to save about Rs335 billion or 1% of GDP from their incomes. This will bring down the national budget gap to Rs1.28 trillion or 3.8% of GDP. This is in line with targets set by the IMF for fiscal year 2016-17, including a special waiver of 0.3% due to one-off spending of Rs100 billion on Temporarily Displaced Persons (TDPs).

Listing expenditures at Rs3.4 trillion, the federal cabinet has decided to maintain subsidies for the incoming fiscal year at Rs169 billion.

With local government elections being held late last year, the cabinet has increased the budget of running the government by 6.8% to Rs348 billion.

The government has set aside Rs245 billion to pay pensions, to military and civilians. However, a major chunk worth Rs542 billion has been allocated as ‘grants’, which usually is provided to the military for defense procurements.

Taxation

The government has proposed to remove limitations on taxing unexplained assets of non-filers while transactions up to year 2002 can be investigated.

The cabinet approved advance tax on Alternate Corporate Tax. It also approved a proposal to levy 1% minimum tax on companies that are declaring gross losses.

Pakistan’s development budget to undergo Rs402 billion cut

It approved to increase dividend income tax rate to 20% for non-filers of income tax returns against the existing rates of 17.5%. It also approved 3% withholding tax on cars leased by banks and such companies. Raising taxes on consumer items, the government is proposing to increase federal excise duty on cigarettes from Rs3,030 per thousand sticks to Rs4,500 for cigarettes with printed sales price of over Rs3,350. Those with sales price below Rs3,350, federal excise duty rates have been raised from Rs1,320 to Rs2,000.

The cabinet has approved 10% sales tax on meat, poultry. The poultry and animal feed to be charged 5% sales tax. A 17% tax is approved on soya bean meal, sunflower seed.

http://tribune.com.pk/story/1113256/cabinet-green-lights-rs4-42tr-deficit-budget/
 

ACE OF THE AIR

SENIOR MEMBER
Jan 6, 2014
3,302
4
2,519
Country
Pakistan
Location
Pakistan
Just 12 Billion in 8 years ???? isn't 7 billion our annual defence budget?
This years budget is almost 9 Billion. If we take the figure of 7 billion and multiply it with 8 years a total of 56 billion. Paying 12 billion from 56 billion is possible.

Lot of speculation from Aunt Jane
Some are reality and some stuff has not been mentioned at all.

The things that are possible are Turkish weapon systems but from where did the next generation sub procurement come up? These have already been ordered and the deal is of 3-4 billion which was signed last year. More over there is no mention of Mirrage V replacement...
 

Users Who Are Viewing This Thread (Total: 1, Members: 0, Guests: 1)


Top Bottom