Most recently, Pakistan's main customers for 2001-02 were Sri Lanka and Bangladesh. However, it hopes that sales will materialize from several memorandum of understanding that have been signed with a number of countries including Iran and Romania.

It also hopes to sell major weapon systems like the Agosta 90B submarine, mine hunters, tanks, armored personnel carriers, missile and gun boats, jet trainers and propeller driven aircraft to non-traditional customers like Algeria, Congo, Indonesia, Kenya, Libya, Nigeria, Sri Lanka, Sudan and Zimbabwe.

With these ambitions in mind, Islamabad has hosted two international exhibitions and is planning a third in September, the report says.

Islamabad has also established a Defense Export Promotion Organization (Depo) to provide impetus to its export objectives, the report said.

With an original goal of disposing of $1 billion worth of excess inventory, the Depo, headed by Maj Gen Ali Hamid not only represents the 17 public sector production units or departments, but also 32 private sector companies.

The Depo plans to target a number of Persian Gulf and South Asian countries for the sales. Countries like Egypt, Kuwait, Malaysia, Saudi Arabia, Syria, Turkey and the United Arab Emirates (UAE) are considered traditional customers and viewed as potential buyers for equipment and services.

Despite these ambitions, Pakistan's indigenous arms manufacturing and export strategies have some inherent problems that will shackle efforts to significantly boost exports, the report says.

Placing Pakistan's average arms sale for the last decade at around $20 million, the report says that after a high in 1998 when Pakistan Ordnance Factory (POF), the country's oldest defense production establishment, alone exported arms worth $35 million, the figures have dropped.

Many observers believe that Islamabad can attract low and medium income countries to buy its defense products.

Nevertheless, the POF has endeavored to attract customers through product innovation like the modifications it made in the German Heckler and Koch MP5A2 sub-machine gun that makes it smaller and attractive enough to sell to countries like Uruguay.

The report says that POF also hopes to sell arms and ammunition such as surface to air missiles, anti-tank guided missiles, cluster bombs, recoilless rifles and rocket launchers.

End.