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Market Research Report

Pakistan Defence and Security Report Q3 2009

Published by Business Monitor International Contact us : +1-860-674-8796
Published 2009/07 Content info Pages: 57
Product code BMI96997
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Description TOC

Abstract

Pakistan is facing its worst security crisis in 60 years. Its security offensive launched in April against the
Pakistani Taliban (the Tehrik-e-Taliban Pakistan) in the Swat province in the north west of the country
appears to have achieved its main object with the capture of the region’s biggest city and administrative
centre Mingora.
As of early June, some fighting continued in mountainous rural areas – particularly the Peochar valley,
the stronghold of the rebel forces. However, reports from Islamabad suggest that the Pakistan military is
now preparing to confront the Taliban in the tribal region of Waziristan, where clashes have already
erupted.
The Pakistan government has widespread political support for this action, except from the fundamentalist
party Islamist Jamaat-e-Islami. The US has also praised Islamabad’s ‘strong response’ to the militant
threat.
However, the fighting has caused a massive internal problem for the country with an estimated 2.4mn
people displaced by the fighting in the north west. The UNHCR on May 19 called for ‘urgent and
massive’ international help for displaced.
Violence has spread elsewhere in the country. In late-May, there was a suicide gun and bomb attack in
Lahore that killed 24 people and wounded nearly 300. The Pakistani Taliban claimed responsibility for
the attack, saying it was out of revenge for the army offensive in the Swat region.
In March 2009, a terrorist attack in Lahore on the visiting Sri Lankan cricket team left eight people dead
and eight Sri Lankan test players wounded.
Tensions remain high in Baluchistan, where the local tribesmen want the large military presence in the
area reduced, saying it undermines their autonomy. In April, at least eight were killed in rioting in the
region. The intervention of the government in these formerly autonomous tribal areas has ended their
isolation. The government maintains that any change in policy would mean allowing the region to once
again become a safe haven for smugglers, warlords and criminals. Baluchistan serves as a major route for
the smuggling of drugs produced in Afghanistan, and the government has asked for US help to prevent
the smuggling of weapons and drugs across the border.
The Baluchistan tribes want to participate in the local gas fields and other major projects there, with
access to jobs and profit-sharing.
The Mumbai terrorist attacks of November 2008 by members of Lashkar-e-Toiba, a Pakistani militant
organisation, rocked the region. Fears were held for an exacerbation of tensions between India and
Pakistan.
The Kashmir situation forms part of the composite dialogue that India has initiated with Pakistan. The
talks, which began in January 2004, were suspended by India after the Mumbai attacks, as they were
carried out by Pakistan-based terrorists. The External Affairs Minister did not specify the conditions, but
India has maintained that the dialogue can be resumed only after Pakistan takes what India considers to be
credible and transparent actions to bring to justice the perpetrators of Mumbai attacks, and dismantle the
terror infrastructure.
Pakistan’s defence industry comprises over 20 major public sector units (PSUs) and over 100 privatesector
firms. The state-owned PSUs dominate major weapons systems production and assembly, while the
private-sector supplies parts, components, bladed weapons and field equipment. Major PSUs include the
Pakistan Ordnance Factory (POF), Heavy Industries Taxila (HIT), Karachi Shipyard and Engineering
Works (KSEW) and the Pakistan Machine Tool Factory.
There are incipient signs of a stabilisation in the Pakistani economy, with inflation subsiding and the
twin-deficit problem slowly diminishing in magnitude. As reflected in the first IMF review under
Pakistan' s bail-out conditions, the authorities have thus far been successful in reining in some of the acute
macroeconomic imbalances built up in recent years.
This quarter, we have introduced a significant new aspect to BMI' s Defence reports, which is the City
Terrorism Rating (CTR). This assesses the risk of a terrorist attack. The CTR takes into account the
overall BMI Terrorism Rating for the country in question. It also incorporates the ‘prevalence’ of
terrorism, which recognises the frequency of attacks, and whether the city is a target for terrorists. The
CTR also recognises the ' threat' of terrorism in terms of the likely numbers of victims and the ability of
groups to launch sustained campaigns. In Pakistan, we assess the CTR in Islamabad, Lahore and Karachi.
The CTRs for these cities are 10, 25and 27.5 respectively. In the Asia Pacific region, these are the three
lowest ratings, apart from Colombo (Sri Lanka) at 2nd lowest, of the 31 cities surveyed in the region. They
reflect the dire security threats currently facing Pakistan.

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