Malaysia’s National Defence Industry (NDI) has grown significantly since the 1990s.
However, despite being in business for over three decades, it seems to have sputtered and stalled.
The five biggest hurdles are copious sums of money (or lack thereof), the lack of a clear, comprehensive blueprint, inadequate infrastructure, the lack of a robust, supporting ecosystem, and a shortage of skilled manpower.
While Malaysia’s defence industry has grown steadily since the early 2000s, comparatively speaking, it’s still significantly behind several Asean member countries, notably Singapore and Indonesia.
To illustrate this point, both nations have fielded their own indigenously designed and built assault rifles – ST Kinetics’ SAR-21, and Pindad’s SS1. Malaysia, in contrast, is still assembling the American M-4 Carbine under licence from Colt Firearms.
Malaysia’s defence allocation hovers at around US$3.8 billion, or roughly 1 per cent of its GDP. Last year, Singapore’s defence budget saw an increase of 7.4 per cent compared to 2021, to US$12.3 billion. Even Brunei spends more on defence than Malaysia, at 2.3 per cent of its GDP.
Malaysia’s defence industry falls under the aegis of the Malaysian Defence Industry Council (MDIC), created in August 1999 to serve as a forum for the defence industry and to oversee the orderly development of Malaysia’s National Defence Industry.
The council has six working groups dealing with the six defence sectors the Malaysian government has classified as “strategic” – Aerospace, Maritime, Weaponry, Automotive, Information Communications Technology (ICT) and Common-user Equipment.
Each is led by a representative from companies in the defence industry. The defence minister chairs MDIC, which has 56 members from the private sector and the government.
It is supposed to support the local development sector, is tasked with marketing Malaysian defence products to overseas buyers and helps companies access foreign markets.
To try and further enhance the local defence industry, the government broadened the council’s goals in 2010 by renaming it the Malaysian Industry Council for Defence Enforcement and Security (MIDES).
Aside from the council, the government also formulated the Defence Industry Blueprint, which laid down the strategy and policies for development in the six defence sectors, of which there are five areas of common emphasis for each, namely:
i) development of human resources and competencies
ii) technology development
iii) industrial development
iv) self-sufficiency, and
v) international marketing.
On paper, the foundations laid out by the government seem impressive, and make perfect sense.
“However, the reality is that we lack the drive, energy, vigour, and the money, to make it happen. Most of the work is still being done in silos,” said an industry expert.
In their article published by Twentytwo13 recently, First Admiral Dr Shaftdean Lufty Rusland of the Royal Malaysian Navy, and Dr Nur Surayya Mohd Saudi, a senior lecturer at the Faculty of Defence Studies and Management, National Defence University of Malaysia, said that harnessing the National Defence Industry (NDI) is an important national agenda.
“Equally important is the government’s clarity on the path ahead, moving forward,” they wrote.
Therein lies the problem. Even after decades of being in the business, Malaysia still lacks a single, holistic roadmap – a structured development plan – for a workable NDI.
“It’s a chicken and egg thing… without a huge injection of capital, nothing will move. And without a viable roadmap, you’re not going to get that money,” added the industry expert.
Another issue with funding is that the government’s support is often limited, and unevenly distributed, leading to inadequate development in some sectors. Therefore, a significant focus is required to ensure the financial investment to stimulate the industry’s development.
Inadequate infrastructure and the lack of a robust supporting ecosystem pose another challenge for Malaysia. Infrastructure development in sectors such as defence manufacturing, and research and development is essential to facilitate the industry’s growth.
There is a need to develop well-equipped facilities, laboratories, and manufacturing centres that incorporate state-of-the-art technologies.
Indonesia’s PT Pindad is a good example of a company with a clear vision of what it wants to accomplish. The company is a state-owned enterprise specialising in military and commercial products. It supplies weapons and munitions for the Indonesian Armed Forces and other uniformed agencies.
Initially, PT Pindad manufactured weapons and munitions under licence for domestic use, but over the years, it used that knowledge as the building blocks and built up its product development and manufacturing capabilities, adding improvements, and refining its line-up.
Its research and development department is robust and forward-thinking, constantly talking to field operators and boots on the ground, getting feedback from actual field experience, honing, refining, and field testing their products to their breaking point and then going back to the drawing board to find solutions to the problems.
Today, it has expanded its product line to cover everything from assault rifles to trucks, armoured vehicles, bullets, grenades, scopes and optics, and mortar shells, and supplies the bulk of Indonesia’s military and paramilitary units.
“One of the biggest hurdles in Malaysia is good governance, which forms a key element in the NDI ecosystem. We are all aware that corruption in Malaysia is endemic. It is deeply entrenched. Look at the OPV (Offshore Patrol Vessel) programme. Look at the LCS (Littoral Combat Ship) scandal… This is a multi-trillion-dollar industry, and everyone wants a piece of this lucrative pie,” said a defence analyst.
“Safeguards against corruption need to be in place, and systemic weaknesses need to be addressed before we can talk of roadmaps and being as competitive and self-reliant as our Asean neighbours. We need to get our house in order first,” he added.
All this is moot, however, if Malaysia does not overhaul its national education policy. As it now stands, there is a huge vacuum of skilled manpower in the country’s defence industry. A significant boost in education and skills development in the defence sector is essential to bridge the skills gap.
On May 26, Deputy Defence Minister Adly Zahari said the ministry would launch another national defence industry policy this year to expand the industry by creating more jobs in the field.
Adly said the ministry was preparing documents relating to the policy and expressed confidence that the defence industry could produce high-income jobs for locals.
The policy would also help in producing more students from the National Defence University of Malaysia (UPNM) with expertise in operating high-tech national defence assets in the future.
“If we look at cybersecurity, it’s a new aspect in the defence world, that’s why we want to prepare for this capability in students, and at the same time, we will try to match it to the needs of Mindef,” said Adly.
Like the besieged German 6th Army in the Battle of Stalingrad during World War II, the odds seem stacked against Malaysia, with battles waged on multiple fronts.
But if we are serious about making the National Defence Industry a reality, we must take a long hard look at where we stand, figure out where we went wrong, and pivot back to a position of strength.
Main image: Defence Ministry, Malaysia
