Harnessing National Defence Industry for a resilient, sustainable economy

Conflicts that lead to economic and political instability affect nations globally.

The ‘DIME’ model developed by the United States military after the Second World War highlights the elements of national power that comprises Diplomatic, Information, Military, and Economics (DIME).

As such, national security and economics are inseparable. Nations would be wise to avoid any political or diplomatic upheavals that may hinder economic growth.

Under ‘Malaysia Madani’, people’s value in society must be uplifted and transformed.

The United Nations’ Sustainable Development Goals (SDG) under Pillar 8, states that economic growth is a priority area in achieving a progressive nation.

In this respect, it is vital for Malaysia to embark on a diversified and flexible industrial programme to promote a resilient and sustainable economy without neglecting national defence and security.

Malaysia’s National Defence Policy is promulgated with the main objectives of protecting and defending national interests, which is to safeguard the sovereignty, territorial integrity, and economic prosperity of the nation.

The fundamentals of Malaysia’s defence revolve around self-reliance, regional cooperation, and foreign aid.

In this regard, harnessing the National Defence Industry (NDI) is an important agenda for the nation.

The defence industry serving the defence sector creates spill-over effects on the economy through various channels that can potentially benefit society.

For instance, the defence industry helps in boosting job creation, and acts as a catalyst for new business opportunities, especially for small, and medium enterprises (SMEs). A well-developed NDI is an enabler to economic prosperity and the sustainable economic development of a nation.

Comparatively, Malaysia’s defence industry is behind several ASEAN members. Furthermore, Malaysia’s preparedness in NDI self-reliance is still in its infancy.

Malaysia’s current technological expertise and capabilities in this field are still scarce and limited.

Therefore, to build a sustainable and resilient NDI, the Defence Ministry (MINDEF) needs to take a strong stand in enhancing NDI. Equally important is the government’s clarity on the path ahead, moving forward.

The Malaysian Armed Forces has to gradually reduce its dependence on imported weapons systems and technologies, which are generally expensive, and are subject to the volatility of market prices, inflation, and foreign exchange.

To develop and uplift Malaysia’s NDI, the development of a new ecosystem is essential. The utilisation of local resources and capabilities may boost the industry’s potential, making it more competitive and sustainable.

Malaysia’s NDI is still at its nascent stages of development and requires strong government assistance, financial support, and good governance.

Also critical to its success is the creation of an NDI-centric workforce, an education system that will feed the demand for said workforce, and finally, the strategic and collaborative efforts with stakeholders, both domestically, and internationally.

Various approaches can be implemented through strategic cooperation between the government and defence industries in an effort to expand the domestic, and worldwide markets.

This effort also requires a solid support system for the SMEs, through special incentives, removing trade barriers, and facilitating international partnerships, especially at this early stage of development.

To oversee this, the government needs to establish an agency that will manage the processes, including research and development, the procurement process, training, support services, and maintenance, repair, and overhaul, among others.

The government can mirror the processes adopted by other nations. France for instance, has a Director-General of Armaments that is entrusted with this responsibility.

Good governance is a prerequisite and will result in a transparent and efficient process, without any political interference.

This new ecosystem will create more jobs and act as the spark for innovation in our national defence industry. Consequently, this will boost economic activity and establish a resilient, and prosperous economy. The new ecosystem will drive Malaysia’s NDI towards a sustainable future.

The fundamentals of Malaysia’s defence – which is a vital cog – revolves around self-reliance, and regional, and foreign cooperation. It is imperative for any nation, in order to achieve economic prosperity, to be supportive of this initiative.

Hence, the NDI is one way for Malaysia to drive economic growth, by leveraging on its own resources and capabilities.

The efforts of the government, in collaboration with strategic partners in developing NDI, coupled with new technologies and knowledge transfer, will greatly enhance the overall effect.

It is only when there is steady growth, that the people of a country will be able to enjoy higher real income.

The takeaway of NDI development is that it outweighs the extensive capital required in developing this industry.

Hence, the government and society must view the development of NDI as a crucial investment, rather than a financial burden.

It is a capital-intensive sector. The NDI should be treated as an important economic sector and a catalyst of national power.

First Admiral Dr Shaftdean Lufty Rusland is a Naval Aviator with the Royal Malaysian Navy, and a Course Member with the National Resilience College, Putrajaya. Dr Nur Surayya Mohd Saudi is currently the Director of Corporate Relations and a senior lecturer at the Faculty of Defence Studies and Management, National Defence University of Malaysia.