Bilal Khan (Quwa)
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It starts with instilling investor confidence.I think there needs to be a discussion on how exactly to "jumpstart" a private sector. Frankly, I have zero idea how to do this but perhaps a discussion can help.
You trigger enough investor confidence, the investors will figure out the funding, labor and all of the other inputs. But the key is instilling confidence.
Unfortunately, that's exactly where our armed forces have failed.
So, case in point, what kind of message did the Army send by ordering nearly $1b in arms from China? Well, they said, "let's help the Chinese industry." Thus, why would anyone in Pakistan invest in setting up that capacity if the Chinese can win?
If the armed forces had instead said, "we will now open a $10 billion program over 15 years to buy new-gen tanks, SPH and IFVs to the Pakistani private sector," then they'll see investor interest.
The next step is due diligence, which, again, our armed forces fails at.
But if it didn't, we'd write up an ironclad policy that requires a %-value of localization, and could break it down to part-by-part. It takes an insane amount of auditing, checks and accountability, which is where you have to give credit to India's CAG.
You then run a tender and see what options the local industry can bring.
In most cases, I suspect local investors will pair up with an outsider so that the latter accelerates the product development. So, for example, Turkey's Otokar could pair up with 'Hypothetical Sialkot Armor Company' to propose a localized variant of the Tulpar IFV. Together, they'd set up the manufacturing capacity, sort out the supply chain (to meet the localization requirement), and so on.
Whoever wins the contract, they'll start pumping the money to set up the capacity. They will use a mix of the Army's downpayment as well as loans, private investment and other funding means from their own end (they'll absorb the risk).
It's not as clean as I described it, the due diligence part can get messy and result in delays (due to back and forth with the industry). But it's doable. It's the model the Turks and Indians used to great effect, we can do so too.
Sadly, it's going to be harder I think, not only due to the malaise within the institutions, but the general disdain at which they've treated non-gov't/non-armed forces entities.
There's an irrational distrust of outsiders -- businesses, journos, analysts, etc alike -- and an aversion to the wider society. Coupled with a lack of mentorship, short-cut mentality, and all those other Pakistaniyat traits, it's tough, real tough.
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