BMI View: Though Kuwait's state revenues are feeling the effects of low oil prices , we forecast defence expenditure in the country to return to growth in 2016 amid growing security threats from Islamist extremism and sectarian tensions, both internally and externally. In addition to the national defence budget, the Kuwaiti parliament has approved USD10bn in defence modernisation funding over the next decade, covering the procurement of products such as fighter jets, tanks and air defence systems. Due to the highly limited size and capability of Kuwait ' s defence manufacturing base, such equipment will need to be sourced from abroad. We expect this to remain the case throughout the next decade, as government investment and foreign involvement in the domestic sector remains low. For these same reasons, Kuwait ' s defence exports will be negligible.
|e/f = BMI estimate/forecast. Source: BMI, US Dept. Of State WMEAT|
|Defence expenditure, USDmn||4,139.2||4,226.8||4,359.4||4,563.1||4,651.2||4,772.2|
|Defence expenditure, USD, % y-o-y||-25.1||2.1||3.1||4.7||1.9||2.6|
|Defence expenditure, % of GDP||3.3||3.3||3.2||3.2||3.2||3.1|
The Kuwaiti parliament in January 2016 announced it had approved an additional USD10bn in funding for defence modernisation over the next 10 years. Drawn from state reserves, this will be and used for the procurement of equipment such as fighter jets, tanks and air defence systems.
Kuwait Times reported in April 2015 that in order to ensure sufficient levels of personnel for the military, the country's National Assembly had passed a law to reinstate compulsory military service for men from 2017 onwards.
In early March 2016, Kuwait's parliament approved the purchase of 22 single-seat and six twin-seat Eurofighter Typhoon combat aircraft.
Abu Dhabi Shipbuilding announced in January 2016 that the Kuwaiti defence ministry had placed a USD71mn order for eight landing craft and high-speed protection vessels.
In October 2015, France and Kuwait signed a letter of acceptance (LoA) covering the latter's USD1.1bn order of Airbus Caracal helicopters. In addition, Kuwait signed LoAs with France for mid-life upgrades of its eight P37 fast attack craft, and delivery of 120 Renault Trucks Defence Sherpa light armoured 4x4 vehicles - as well as another protected vehicle model from the same company. The country will be ordering various missiles to equip the abovementioned vessels and helicopters.
In September 2015, Saab delivered an integrated chemical, biological, radiological, nuclear detection system to Kuwait.
In June 2015, Kuwait placed an order for 12 nuclear, biological, and chemical reconnaissance vehicles from Germany-based Rheinmetall MAN Military Vehicles.
In its World Report 2016, Human Rights Watch stated that the Kuwaiti government had 'aggressively cracked down on free speech throughout 2015'.
Kuwait experienced a terrorist attack on its Shi'a Imam al-Sadeq mosque in June 2015. The attack, which left 27 people dead, was claimed by Islamic State-affiliated Najd Province, based in Saudi Arabia. On November 20, Kuwaiti police arrested several people accused of transferring money and weapons to IS.
In September 2015, 24 people were arrested in Kuwait for allegedly 'spying for Iran and Hizbullah to carry out aggressive acts against Kuwait'. Two death sentences were handed down in this case in January 2016, prompting nine Shi'a MPs to temporarily boycott parliament.
Riyadh expelled Iranian envoys from Saudi Arabia in January 2016 after protesters in Tehran set fire to Saudi Arabia's embassy in response to the latter's execution of Shi'a cleric and activist Sheikh Nimr al-Nimr. This prompted Kuwait to recall its ambassador from Tehran in support of its fellow Gulf Cooperation Council member.
The Kuwait Defence & Security Report features BMI Research's independent forecasts for national and international security, the defence industry, military expenditure, employment in arms production, and arms imports and exports, as well as examining industry trends and prospects, national and multinational arms producers and the regulatory environment.
BMI's Kuwait Defence & Security Report provides professionals, consultancies, government departments, regulatory bodies and researchers with independent forecasts and regional competitive intelligence on the Kuwaiti defence and security industry.
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Global and Regional Political Outlooks
A strategic overview of the world’s major political risks, identifying countries facing leadership successions and nations at risk of upheaval, inter-state conflict, or separatism and insurgencies, plus a summary of the world’s ‘wild card’ low-probability high-impact risks.
Snapshot evaluation of the major issues affecting the defence and security sectors, economy and politics, with issues subdivided into strengths, weaknesses, opportunities and threats.
BMI Industry Forecast Scenario
Historic data series and forecasts to end-2019 for key industry indicators supported by explicit assumptions, plus analysis of key downside risks to the main forecast.
- Defence Expenditure: Defence expenditure (local currency and USDbn); defence expenditure (% of total budget); defence expenditure per capita (USD); defence budget (local currency and USDbn).
- Armed Forces (to 2012): Manpower available for military service, manpower fit for militaryservice, army personnel, navy personnel,air force personnel, total armed forces, (‘000) (% population).
- Arms Trade: Arms and ammunition exports and imports (USDmn); bombs, grenades and missiles exports and imports (USDmn); revolver and pistol exports and imports (USDmn); weapons excluding guns and swords exports and imports (USDmn).
Political Risk Assessment
Drawing on BMI’s heritage of more than 25 years of Country Risk analysis, this comprehensively evaluates the key risks to domestic politics and foreign relations, focusing on issues most likely to affect either domestic security or the defence sector.
Security Risk Analysis
BMI’s proprietary Security Risk Indices provide investors with a reliable and country-comparable guide to conflict, terrorism and criminal risk, backed up by our analyst’s latest assessment of each component. Furthermore, drawing on our Country Risk expertise, we assess the state’s vulnerability to a serious, or prolonged, terrorist campaign.
Armed Forces Spending/ Expenditure
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The domestic security overview lists the various potential internal security threats facing a country, ranging from internal security issues such as terrorism, cyber terrorism, crime and drugs, to external security issues including general defence procedures and potential threats from specific countries. The reports also provide a regional overview which details specific issues and flashpoints affecting the Americas, along with potential risks in the coming year.
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