Singapore Defence & Security Report

Published 31 October 2014

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Singapore Defence & Security Report

BMI View:   Defence spending remains a top priority for the Singaporean government which is executing a prudent military procurement agenda with a long-term outlook that will transcend the Singapore Armed Forces (SAF) into a third generation fighting force. In the future, we expect to see sustained levels of weapons imports from American and European arms manufacturers, as well as continued support for domestic defence company, ST Engineering. The key downside risk Singapore's defence expenditure stems from a GDP downturn, but we forecast positive and stable economic growth through to 2018. 

BMI forecasts Singaporean defence expenditure to reach USD11.6bn in 2015 as the Ministry of Defence upholds its commitment to steady and sustained spending policy, which is focused on hi-tech weaponry. This bodes well for domestic and international security and defence firms, which will see Singapore to maintain its position as a top five global arms importer. Singapore is investing in submarines, unmanned aerial vehicles (UAVs), and new fighter jets. The city-state is tipped as one of the leading customers for the Lockheed Martin F-35 fighter programme, however fresh reports indicating further F-15 acquisitions have raised question marks over Singapore's commitment.

Other important acquisitions made in the past 12 months include orders for two Type-218SG submarines, two Sikorsky S-70B Naval Helicopters, Joint Direct Attack Munitions (JDAM) kits, SPYDER and ASTER-30 Surface-to-Air Missile Systems. This array of systems are expected to improve synergy between air, sea, and land forces, and strengthen defensive and offensive capabilities as SAF operates a pre-emptive defence policy - similar to that of Israel. There have also been further investments in personnel training, including a new live-firing training facility, designed to enhance urban warfare and close-quarters combat capabilities.  ST Electronics has taken delivery of a Cyber Security Simulator, which will...

Table of Contents

BMI Industry View
7
Key BMI Forecasts
8
Recent Developments
8
SWOT
9
Singapore Security SWOT
9
Singapore Defence & Security SWOT
12
Political
15
Economic
16
Business Environment
17
Industry Forecast
18
Defence Expenditure
18
Table: Defence Expenditure (Singapore 2011-2018)
18
Armed Forces
20
Table: Armed Forces Personnel (Singapore 2004-2011)
21
Table: Manpower Available For Military Service (Singapore 2011-2018)
22
Defence Trade
22
Table: Defence Trade Balance (Singapore 2011-2018)
23
Table: Defence Exports (Singapore 2011-2018)
25
Macroeconomic Forecasts
27
Economic Analysis
27
Labour Restructuring A Notable Headwind
28
Industry Risk Reward Ratings
30
Singapore Security Risk Ratings
30
Market Overview
32
Singapore Defence Market Overview
32
Arms Trade Overview
33
Armed Forces And Government Spending
37
Industry Trends And Developments
40
Singapore Security Overview
41
Domestic Threats
42
Regional Threats
42
International Security
46
Company Profile
47
Singapore Technologies Aero
47
Singapore Technologies Electronics
49
Singapore Technologies Kinetics
51
Singapore Technologies Marine
53
Regional Overview
55
South East Asia Security Overview
55
Challenges And Threats To Stability And Security
55
Global Industry Overview
67
Political Risk Analysis
67
Methodology
73
Industry Forecast Methodology
73
Sector-Specific Methodology
74
Sources
75
Security Risk Index Methodology
75
Table: Indicators And Weighting
76

The Singapore 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 Singapore Defence & Security Report provides professionals, consultancies, government departments, regulatory bodies and researchers with independent forecasts and regional competitive intelligence on the Singaporean defence and security industry.

Key Benefits

  • Benchmark BMI's independent defence and security industry forecasts on Singapore to test other views - a key input for successful budgetary and strategic business planning in the Singaporean defence and security market.
  • Target business opportunities and risks in the Asia defence and security sector through reviews of latest industry trends, regulatory changes and major deals, projects and investments in Asia.
  • Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. KPIs and latest activity).

Coverage

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.

SWOT Analysis

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

The reports contain a detailed breakdown of areas of expenditure by the armed forces, these include spending on international deployments, WMDs and missile defence systems as well as individual breakdowns of the cost-per-soldier.

Competitive Landscape

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.

Company Profiles*

Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.

Sources

The Defence & Security Market reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.

*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.

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Testimonials

'An essential, multi-faceted research tool. BMI’s thorough understanding of the major market players enables an informed – and informative – review of the sector’s actual performance, together with useful insights into current industry issues, which are topped-off with detailed and invaluable forecasts of industry and macroeconomic trends.’

Senior Research Analyst, ABC International Bank plc