Malaysia can use future Lima events to offer great products to the world

For items that we are not capable of producing now, we should procure them in the cleanest possible ways. But if there is any opportunity to nurture local producers, we should seize these chances.

When I visited Australia last year, I was told by defence officials that for the longest time, the Department of Defence procures from everywhere in the world and with an arms-length attitude to ensure no collusion or corruption.

But there has been a major shift in thinking in the past few years to develop a strong domestic defence industry to provide jobs and technological depth for the Australian economy. Australia’s government has a defence minister and a defence industry minister, both cabinet ranked.

If we agreed that an industrial policy is needed for the defence industry, then we will have to get it right. An industrial policy with a carrot-and-stick approach is more likely to succeed than just carrot only, as the other name of this is “corporate welfare” or, worse, cronyism.

The defence industry must not just aim to sell to the Malaysian government but to aim to be an exporter. So there must be ways to measure successes and also impose penalty for failures, like letting go of poor performers.

Admittedly, the time needed to nurture a genuine defence industry is probably longer than other industries. But if it is done right, we will see clear results in a decade or so, which is why I told the audience at a dialogue at Lima that many of us in this government are thinking not just about the next 20 days of firefighting, which we will have to do as politicians, but we are also thinking about the next 20 years.

For industrial policy to succeed, the government will have to organise R&D in universities and research institutes better.

Most of them work in silos. R&D doesn’t work with the users close enough. And 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 can’t operate in sync and can’t help the overall industrial policy.

Funding will be an important subject. If all is state-driven with no market signal, it may go to the other extreme.

A mixture of state funding as angel investor will be helpful. It is in this context that when I visited Lembaga Tabung Angkatan Tentera in January, I suggested to the new management to forget about becoming a housing developer, which the last man-agement pursued, but to be a strategic investor in the defence industry.

During Lima, I had an interesting meeting with Dr Ajay Kumar, India’s secretary of defence production (India’s Defence Ministry has four secretaries-general responsible for strategic matters, defence R&D, defence production, and veteran affairs). According to him, revolutions in information technology have brought many formerly civilian ICT companies into defence industries.

At the same time, as technological revolution creates a levelplaying field, start-ups are competing with big boys in the defence industry, which inevitably becomes more technological driven. It is my fervent hope that Lima 2021 and the subsequent ones would be transformative with many more Malaysian innovations and products so that we are not just being asked to buy from foreign corporations but we have something great to offer to the world as well.