Building defence industry in Bangladesh

— BMTF Facebook page

THE defence industry is a commercial enterprise involved in research and development, engineering, production, servicing military materials, equipment and facilities. A military establishment, an entrepreneur or a joint venture, can hold the ownership of a manufacturing facility. There are many companies that produce dual-use items for the military and civilian population.

For example, medicine produced in pharmaceutical factories has both civilian and military uses. But a pharmaceutical factory, whoever holds the ownership, is not called a ‘defence enterprise’. Factories producing materials or equipment for sole military purposes are included in the defence industry. In Bangladesh, there are a couple of commercial enterprises, but all of them are not typical ‘defence industry.’

Industrial enterprises owned by the military are the Bangladesh Ordnance Factory, Bangladesh Machine Tools Factory, Bangladesh Diesel Plant, Khulna Shipyard Ltd, Chattogram Dry Dock Ltd and the Dockyard Engineering Works in Narayanganj. These are state-owned enterprises managed and operated by the army and the navy.

The Bangladesh Ordnance Factory is the only factory that manufactures products for military use only. The Ordnance Factory has been in production since 1977. After its modernisation in 1982, the annual production target was set at 2,500 rifles and 15 million rounds of ammunition. In 2005, the Ordnance Factory set up three production plants: the TNT filling plant, the grenade production plant and the induction furnace plant. The Automatic Assault Rifle (BD 08) plant was set up in 2008. Today, the Ordnance Factory has the capacity to produce 90 million rounds of small-arms ammunition. It also has the capacity to produce grenades and high-calibre munition (www.bof.gov.bd, accessed July 19, 2023).

The Bangladesh Machine Tools Factory is one of the largest commercial enterprises in the country. It was built in 1967 ‘with the objective of functioning as the mother industry to support small enterprises dealing with minor engineering products.’ The Machine Tools Factory produces a range of commercial products. Its major products having relevance to the defence use are military vehicles, military, para-military, formal, casual and sports footgear as well as leather products, metallic and non-metallic craft, decorative items (ie military ranks, badges), sports items (ie medals, crests, trophies), gift items (ie lapel pins, key rings, souvenir items) etc, tools and spares and so forth (www.bmtf.com.bd, accessed July 20, 2023).

The shipyards managed by the navy produce ships and components for both military and civilian purposes. Military products built in the Khulna Shipyard are patrol craft, tug and hydrographic survey vessel, etc, repairing warship, merchant ship, etc. The shipyard’s most notable achievement in warship construction was in 2011 and 2023 with China’s technical assistance. The Chattogram Dry Dock and the Dockyard Engineering Works also build small-to-medium commercial ships and service naval vessels.

Analysis of open source information reveals that Bangladesh’s domestic industrial capacity to produce defence hardware and software is far less than the ‘demand fulfilled through import.’ Bangladesh’s defence development and modernisation is import-dependent. Defence industrial enterprises can secure a very small part of defence allocations for acquisition. The fundamental reason is that the industry’s present capacity is not adequate to meet large and diverse defence demands.

Bangladesh adopted a military modernisation programme in 2009 called Forces Goal 2030. ‘The primary focus of the modernisation programme is the reformation of the military organisation, expansion of the forces, the transformation of the indigenous defence sector to support research and manufacturing, and acquisition of modern military weapons’ (Wikipedia, accessed July 21, 2023).

Since the launch of the programme, the navy is yet make major breakthrough in modern warship programmes. The air force’s programme has been a combination of import-based third and fourth generation aircraft and with eyes on fifth generation platforms and avionics.

The Ordnance Factory and the Machine Tools Factory need wider capacities to support the army’s diverse material needs. ‘The transformation of the indigenous defence sector’ with research and manufacturing needs an added impetus. Indigenous arms production under certain conditions is cost-effective compared with foreign purchase. While indigenous arms industries could reduce developing countries’ import dependence, many could not adopt or sustain long term consistent indigenisation policy. According to Professor E Looney, development of the defence industrial base grows through seven stages of development.

Stage 1: Arms are imported, but are serviced and maintained domestically.

Stage 2: A license to produce arms is required and production facilities are built, but requiring huge technical and personal assistance from supplier.

Stage 3: Production starts and to begin with, involves local assembly of imported sub-assemblies.

Stage 4: Sub-assemblies are assembled locally from imported components and sometimes re-exported to the licenser.

Stage 5: Components are manufactured locally from imported raw materials.

Stage 6: Local production of raw materials.

Stage 7: A complete indigenous production including design, raw materials and manufacture.

Stage 1 has been the most common form of development and modernisation in majority of countries around the world. Stage 2 to Stage 7 need SMART (specific, measurable, achievable, realistic and time-bound) planning backed by immutable political resolve and robust defence industrial policy because defence modernisation in any form faces multi-pronged challenges from both internal and external actors.

The initiative of transforming the indigenous defence sector taken in 2009 looks relevant in socio-economic and military context. The predicted domestic market size is likely to be strong enough for the survival of a growing defence industry. To move things on track, any potential disconnect between components of development approaches and links between the transformation plans and entrepreneurship, investment, technology collaboration, research, academicians and the military — the end user of defence articles — should be shored up.

Last but not the least, the application of ‘defence off-set contract’ in defence acquisition programmes could be an ‘initiative multiplier’ towards building a defence industry in Bangladesh.

Mohammad Abdur Razzak, a retired commodore of the Bangladesh navy, is a security analyst.

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