Pakistan Defence and Security Report Q3 2011
Includes 3 FREE quarterly updates
Pakistan's long-documented governance deficiency continues to aid the endurance of Islamist militancy. On April 5 2011, a report delivered to the US Congress described Pakistan’s military operation against insurgents in the northwest as lacking structure and lacking a capacity to hold areas that have been cleared of insurgents.
At a meeting on May 1 2011, Pakistan’s Senate Standing Committee on Defence described the Pakistan Air Force as obsolete and aged, and asked the government for essential funding to upgrade and rejuvenate the Pakistan Air Force (PAF).
Ilyas Kashmiri, an al-Qaeda commander and one of Pakistan's most senior insurgents, was killed in a US drone attack on South Waziristan in early June 2011. He was on the ‘most wanted’ list and has been blamed for organising attacks in Afghanistan and India, as well as in Pakistan.
The US military announced on May 25 2011 its plan to pull some of its troops out of Pakistan at the request of Pakistan’s government. The formal request came amid tensions over the unilateral raid by US Navy SEALs against al-Qaeda leader Osama bin Laden on May 2 in the Pakistani city of Abbottabad. Even before the US operation against bin Laden, Pakistan-US diplomatic relations had been souring.
Joint intelligence operations between Pakistan and the US have been put on hold since late-January2011. Relations started becoming worse after a series of diplomatic disputes, including a massive drone strike in March, as well as the case of US CIA operative Raymond Davis, charged with shooting and killing two armed men in Pakistan on January 27. The US' continued drone strikes in the Federally Administered Tribal Areas along Pakistan's northwest border with Afghanistan continue to cause widespread resentment.
Militant violence continues in Karachi. A raid on May 22-23 2011 by Pakistani Taliban militants on the Pakistan Naval Station Mehran naval aviation base in Karachi demonstrated how even secure military facilities can no longer be considered safe. As PNS Mehran is only 24km away from Masroor air base, which is believed to store nuclear weapons, there are concerns that militants could attempt to seize warheads in a future raid.
NATO chief Anders Fogh Rasmussen said that even though he was confident that Pakistan's nuclear arsenal is safe and well-protected, it is still a matter of serious concern. On February 25 2011, Dr Abdul Qadeer Khan claimed that Pakistan’s nuclear programme had been ‘running without any break’ for the past 10 years, and that this includes uranium enrichment activities. He said that the material produced could be incorporated into nuclear weapons at any time. He said that nuclear material is stored in a ‘highly secured system which has been improved gradually’.
India’s defence minister M M Pallam Raju said on June 4 2011 that if there were another terrorist attack in India that was linked to Pakistan’s security groups, then India would likely retaliate.
In June 2011, the Auditor General described a series of significant financial irregularities in the accounts of Pakistan Ordnance Factories (POF) – the largest armaments complex in Pakistan.
Pakistan is in a position to purchase weapons made in China at reduced prices, due to the special relationship between the two countries. In May 2011, Pakistani Prime Minister Yousuf Raza Gilani acknowledged China's support for Pakistan and described China as his country's true friend amid tensions with the US. Further, Gilani also pledged Pakistan's support to China at all times. Economically, Pakistan's development is already closely linked to China.
Pakistan's manufacturing sector is showing signs of a solid rebound, placing upside risk to our end- FY2010/11 real GDP growth forecast of 1.5%. Three short-term headwinds could hold manufacturing growth back – high inflation, high interest rates and energy shortages. However, over the long term the sector looks promising given Pakistan's strategic location, favourable demographics and sustained push for better international market access.
Pakistan's long-documented governance deficiency continues to aid the endurance of Islamist militancy. On April 5 2011, a report delivered to the US Congress described Pakistan’s military operation against insurgents in the northwest as lacking structure and lacking a capacity to hold areas that have been cleared of insurgents.
At a meeting on May 1 2011, Pakistan’s Senate Standing Committee on Defence described the Pakistan Air Force as obsolete and aged, and asked the government for essential funding to upgrade and rejuvenate the Pakistan Air Force (PAF).
Ilyas Kashmiri, an al-Qaeda commander and one of Pakistan's most senior insurgents, was killed in a US drone attack on South Waziristan in early June 2011. He was on the ‘most wanted’ list and has been blamed for organising attacks in Afghanistan and India, as well as in Pakistan.
The US military announced on May 25 2011 its plan to pull some of its troops out of Pakistan at the request of Pakistan’s government. The formal request came amid tensions over the unilateral raid by US Navy SEALs against al-Qaeda leader Osama bin Laden on May 2 in the Pakistani city of Abbottabad. Even before the US operation against bin Laden, Pakistan-US diplomatic relations had been souring.
Joint intelligence operations between Pakistan and the US have been put on hold since late-January2011. Relations started becoming worse after a series of diplomatic disputes, including a massive drone strike in March, as well as the case of US CIA operative Raymond Davis, charged with shooting and killing two armed men in Pakistan on January 27. The US' continued drone strikes in the Federally Administered Tribal Areas along Pakistan's northwest border with Afghanistan continue to cause widespread resentment.
Militant violence continues in Karachi. A raid on May 22-23 2011 by Pakistani Taliban militants on the Pakistan Naval Station Mehran naval aviation base in Karachi demonstrated how even secure military facilities can no longer be considered safe. As PNS Mehran is only 24km away from Masroor air base, which is believed to store nuclear weapons, there are concerns that militants could attempt to seize warheads in a future raid.
NATO chief Anders Fogh Rasmussen said that even though he was confident that Pakistan's nuclear arsenal is safe and well-protected, it is still a matter of serious concern. On February 25 2011, Dr Abdul Qadeer Khan claimed that Pakistan’s nuclear programme had been ‘running without any break’ for the past 10 years, and that this includes uranium enrichment activities. He said that the material produced could be incorporated into nuclear weapons at any time. He said that nuclear material is stored in a ‘highly secured system which has been improved gradually’.
India’s defence minister M M Pallam Raju said on June 4 2011 that if there were another terrorist attack in India that was linked to Pakistan’s security groups, then India would likely retaliate.
In June 2011, the Auditor General described a series of significant financial irregularities in the accounts of Pakistan Ordnance Factories (POF) – the largest armaments complex in Pakistan.
Pakistan is in a position to purchase weapons made in China at reduced prices, due to the special relationship between the two countries. In May 2011, Pakistani Prime Minister Yousuf Raza Gilani acknowledged China's support for Pakistan and described China as his country's true friend amid tensions with the US. Further, Gilani also pledged Pakistan's support to China at all times. Economically, Pakistan's development is already closely linked to China.
Pakistan's manufacturing sector is showing signs of a solid rebound, placing upside risk to our end- FY2010/11 real GDP growth forecast of 1.5%. Three short-term headwinds could hold manufacturing growth back – high inflation, high interest rates and energy shortages. However, over the long term the sector looks promising given Pakistan's strategic location, favourable demographics and sustained push for better international market access.
Contents
Executive SummarySWOT Analysis
Pakistan Security SWOT
Pakistan Defence Industry SWOT
Pakistan Political SWOT
Pakistan Economic SWOT
Pakistan Business Environment SWOT
Global Political Outlook
Japan After The Quake
Global Hotspots: Libya, Iran, Afghanistan, Korea
Wild Cards To Watch
South Asia Security Overview
Security Risk Ratings
BMI’s Security Ratings
Table: Asia Pacific Regional Security Ratings
Table: Asia Pacific State Vulnerability To Terrorism Index
City Terrorism Rating
Table: BMI’s Asia City Terrorism Index
Political Overview
Domestic Politics
Foreign Politics
Long-Term Political Outlook
Table: Scenario Matrix – Evolution Of State
Table: Scenario Matrix – Centrifugal Versus Centripetal Forces
Security Overview
Internal Security Situation
Insurgency
Need For Police Reform
External Security Situation
Border Disputes
Afghanistan
Kashmir
Siachen Glacier Region
Armed Forces And Government Spending
Armed Forces
Deployments And Exercises
Table: Pakistan’s Deployments
Weapons Of Mass Destruction
Table: Pakistan’s Nuclear-Capable Ballistic Missile Arsenal
Nuclear Developments
Table: Exports From Pakistan
Market Overview
Arms Trade Overview
Industry Trends And Developments
Procurement Trends And Developments
Industry Forecast Scenario
Armed Forces
Table: Pakistan’s Defence Personnel, 2000-2008 (‘000, unless otherwise stated)
Table: Manpower Available For Military Services, 2008-2015 (aged 16-49, unless otherwise stated)
Defence Expenditure
Table: Pakistan’s Defence Expenditure, 2008-2015
Table: Pakistan’s Defence Expenditure – Changing Of GDP, 2008-2015 (US$mn)
Table: Pakistan’s Defence Exports, 2008-2015 (US$mn)
Table: Pakistan’s Defence Imports, 2008-2015 (US$mn)
Table: Pakistan’s Defence Trade Balance, 2008-2015 (US$mn)
Key Risks To BMI’s Forecast Scenario
Macroeconomic Outlook
Table: Pakistan - Economic Activity
Company Profiles
Air Weapons Complex
Dr AQ Khan Laboratories
Heavy Industries Taxila
Pakistan Aeronautical Complex
Pakistan Ordnance Factories
BMI Methodology
How We Generate Our Industry Forecasts
Defence Industry
City Terrorism Rating
Table: Methodology
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