I've been reading opinions on the Internet and members on this forum who have worked in defence industry who all claim it'd flourish if privatised.
State should set laws against foreign ownership though
Thing is, when most people say, "privatize POF/HIT/PAC, etc" they don't do it without articulating the exact problems with those state-owned enterprises (SOE) and how private ownership would solve them.
That's why I take the "middle road" approach.
Let's keep POF, HIT, PAC, KSEW, etc, as SOEs, but put their day-to-day management in the hands of industry professionals.
Use legislation to create a wall that prevents the armed forces from interfering in the SOEs' leadership and, instead, have the SOEs accountable to tangible KPIs. These KPIs should be: cost control (not cost reduction, but control to ensure that the money is all going into strategically valuable projects), profitability, talent development, etc.
The Turkish model is pretty good.
Their big hitters -- e.g., TAI, Aselsan, Havelsan, etc -- are state-owned, but the military leadership doesn't run the day-to-day. Instead, SOE management is done by industrial experts (often engineers) like Dr. Ismail Demir and Dr. Temel Kotil.
Basically, the Turkish generals realized they don't need to run the defence industry directly. They can leave it to the experts who, in turn, will drive profitability and growth. Then that growth benefits the Turkish generals by driving more capital into the military's pension fund which, in turn, re-invests that money into other ventures (like buying British steel IP). As these ventures grow, the cheques Turkey's military officers cash each gets bigger, more Turks get high-value employment, Turkey's exports go up, etc, etc.
That said, we should also integrate the private sector into our industry. If we leave our SOEs in the hands of experts with a cost-control focus, they'll defer a lot of work to private companies. We'd reach point where PAC might only assemble a fighter plane, but all of the aerostructures, inputs, etc, are coming from various privately-owned Pakistani companies. That's the goal.
