Defence Industry In Malaysia And Turkey- A Comparative Study - by Lt Col Dr Maimunah Omar
30th January 2020-
DEFENCE INDUSTRY IN MALAYSIA AND TURKEY- A COMPARATIVE STUDY
by LT COL DR MAIMUNAH OMAR
Why are defence industries very important? Malaysia is not excluded as it was mentioned specifically in its defence white paper and given special chapter as elaboration. Basically, the defence industry contributes towards job creation, savings in the foreign exchange, technology transfer, foreign direct investment, dual-used technology and the development of downstream industries for other economic sectors. For example in 2018, the global defence industry makes a revenue of 645,000 billion dollar and 193,000 billion working opportunities around the world.
TURKEY DEFENCE INDUSTRY
Turkey is able to provide itself with the defence industry products accordingly. The country that was previously almost completely dependent on other countries in the defence industry provides itself with the defence industry products by almost 70 percent.
Turkey defence industry itself has generated it economy through its exported products. From January through September 2019, the export of the Turkish defence industry products to the US amounted to $675.6 million (an increase of 16.69 percent), to Israel - $15.6 million (an increase of 19.2 times), to Russia - $17.7 million (an increase of 2.2 times) compared to the same period of 2018.
The export volume of the Turkish defence industry products increased by 37.5 percent and reached $2.1 billion from January through October 2019 compared to the same period of 2018. Turkey will soon produce and improve the production of military equipment used for onshore, offshore and air operations, as well as develop and improve the production of domestic weapons.
FNSS – THE FIRST TURKEY DEFENCE INDUSTRY COMPANY
Taking an example of one of Turkey’s defence industry companies, the globally recognized land systems company, FNSS that specializes in designing and producing the wheeled and tracked armoured combat the company has delivered more than 4000 Armoured combat vehicles so far, worldwide. Other than receiving strong support from Turkish government, the secret of their success lies in the competency and dynamic workforce where the company has continuously improved its vehicle design and production capabilities in line with the requirements of its users.
FNSS designs and develops customized solutions to meet the requirements of each user. The key to FNSS’ success in delivering tailored products within requested time frames lies in its flexible approach to project management. This is complemented by its ability to orchestrate an extensive supply chain and a wide range of global partnerships. FNSS views user satisfaction as a permanent concept, addressing new needs that may emerge throughout the product`s lifecycle and offers sustainable solutions that extend throughout the overall lifecycle. They also generate value for its international users through localization packages that include employing local labour.
THE DEFENCE INDUSTRY IN MALAYSIA-ASPECTS TO EXAMINE
In Malaysia, the defence industry has grown somewhat steadily until now but it is still in need of a structured development along with greater involvement by the government.
Even though the Malaysian government has formulated and outlined the strategy and policies in defence white paper for development in five areas such as in human resources and competencies, technology development, industrial development, self-sufficiency and international marketing, the government must also emphasise other issues related to capability development levels such as new approaches to the offset programme and technology transfer, new approaches to defence acquisition, industry incentive, role of government agencies and the Malaysian Council for the Defence and Security industry, R&D activities, bilateral defence industry cooperation, the establishment of strategic business alliances and smart partnership, marketing enhancement, human resource and competency development and the different levels of the defence industry development.
Other than strong funding and budget and also the current ongoing innovation, the government also needs to have a better examination of the issues of R&D across universities and research institutes. Currently, most of them work in silos. Currently R&D does not appear to work with the users closely enough. To add, the security and defence users (the three services in the armed forces, police and other enforcement agencies) must not work in silos to procure items that each prefer but they cannot operate in harmony and even more importantly, they cannot help the overall industrial policy. Some policy issues on R&D defence are not clearly defined and addressed. There is no National Defence Research Policy. As such, the government has to look deeply into it.
The government also has to be alert over some of the major changes in the defence industry landscape that drives these industries to reform on the emergence of new threats such as cyber threats, disruptive technologies (the optimisation of artificial intelligence), climate change and space military.
A special fund (Defence Industry Capability Fund) is created for building the capacity and strengthening the existing defence industry’s capability and the global defence industry’s competitiveness. Financial access and support should not only be given to existing players such as those enjoying long terms contracts but also SMEs that demonstrate a strong entrepreneurial spirit of the defence industry.
Hiring manpower and skilled workers from the veterans also a good move. This is because some of them are highly trained and highly skilled in the technical field before they are retired. Thus, this can give an opportunity to help the veterans obtain second careers.
In conclusion, the contribution of the defence industry to the national defence capability development is very significant and meaningful. Taking Turkey as an example, a highly developed local defence industry will reduce the country’s dependence on original equipment manufacturers overseas. Malaysia’s defence industry is still at its infancy when we compare with other well established foreign defence industries, but it will grow steadily and move forward on the right path with the guidance from the government and cooperation from the defence industry, either local or foreign one.