BMI View: Singapore will remain an attractive defence market over the coming decade, as regional tensions, transnational terrorism, cyberthreats and maritime piracy continue to drive military spending by the city-state. While the number of Singaporean military personnel is set to decline, spending on training, activities and equipment will rise, as the government works to strengthen the SAF's capabilities, and provide the force with a qualitative edge over potential enemies. Singapore's defence trade balance will remain in deficit for the foreseeable future - though this will narrow gradually long term as local manufacturers develop capabilities and thus become increasingly capable of capturing both local and international procurement contracts.
|f = BMI forecast. Source: BMI, US WMEAT|
|Defence expenditure, % of GDP||3.4||3.3||3.3||3.3||3.2|
|Defence expenditure, USDmn||9,491.9||9,677.6||10,370.5||11,161.0||12,067.1|
|Defence expenditure, USD, % y-o-y||-2.7||2.0||7.2||7.6||8.1|
Singapore's government announced in March, a FY2016/17 defence budget of SGD13.97bn - a significant increase on the FY2015/16 budget figure. We forecast total defence spending to come in at USD9.49bn for the full year 2016.
In August 2016, Indonesian security forces announced the arrest of five members of local Islamist extremist group Kitabah Gonggong Rebus - an IS affiliate - at Batam Island, accused of planning a rocket attack on Singapore from across the Singapore Strait.
In H116, IMB reported a sharp drop in the number of piracy and armed robbery incidents - globally and regionally. In the straits of Malacca and Singapore, only one incident was recorded in that period.
Singapore signed an enhanced defence pact with the US in December 2015.
In April 2016, Defence Minister Ng Eng Hen announced that the number of SAF personnel at the Cyber Defence Operations Hub (CDOH) would be doubled by 2020.
In July 2016, a new, battalion-sized Army Deployment Force (ADF) was inaugurated, intended for response to terrorist threats in urban settings.
Singapore's defence ministry has announced it is planning for a fully unmanned fleet to replace its mine counter-measure (MCM) vessels.
In May 2016, Reuters reported that Singapore's defence ministry had down-selected helicopters from Airbus and Leonardo-Finmeccanica for its Super Puma replacement programme.
In April 2016, Singapore's defence ministry confirmed its acquisition of the Elta EL/M-2084 multi-mission radar from Israeli Aerospace Industries.
Lockheed Martin won a USD914mn contract in December 2015 for the upgrade of the Singaporean air force's F-16C/D aircraft.
ST Kinetics launched a third version of its Terrex IFV in June 2016. It also unveiled a new version of its ARIELE soldier system in February 2016.
ST Aerospace has announced it is developing a new UAV designed for both air and underwater operations.
ST Electronics revealed a new lightweight HALE UAV radio-frequency payload in June 2016.
Safran Helicopter Engines reported in May 2016 it had opened a new facility in Singapore.
In the same month, Finmeccanica and Singapore's Nanyang Technological University (NTU) signed an agreement to collaborate on helicopter-related R&D.
In February 2016, NTU and BAE Systems signed an agreement to jointly develop cybersecurity technologies.
In January 2016, Japan's NEC Corporation established a facility in Singapore to expand its cybersecurity offerings in the city-state and wider region.
Defence Industry Risk Reward Index
Singapore's business environment is among the most attractive in the world, with high levels of economic and investment openness, low levels of corruption, a skilled labour force and developed infrastructure. This means the city-state performs well for Country Risks and Rewards in our Risk/Reward Index (RRI). Singapore's military is small in terms of personnel numbers and threats to its security environment are relatively low - weighing on the country's score in the Industry Rewards segment. That said, we forecast steady growth in Singaporean defence spending throughout the next decade. We also expect local defence companies to develop and expand capabilities in coming years - leading to gradual increases in Singaporean defence exports, and thus raising the city-state's score in the Industry Risks category. Overall, Singapore scores 51 out of 100 in our RRI, ranking eighth out of 14 states in the Asia Pacific.
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.
- 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).
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
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.
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.
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.
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.