Thailand Defence & Security Report

Published 29 December 2014

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Thailand Defence & Security Report

BMI View: A military coup in 2014 has successfully imposed a short-term solution to restore order and stability under General Prayuth Chan-ocha. This interim government is set to remain in place until October 2015 at the earliest, but the army will continue to play a major role in domestic politics beyond the transition to civilian rule. Inefficient allocation of resources hampers development, but will not be addressed by any government in the near future.

The ouster of Prime Minister Yingluck Shinawatra on constitutional grounds in May 2014 triggered a rapid escalation in civil tensions across Thailand, pitting her 'red shirt' supporters against the largely urban, pro-establishment, 'yellow shirts'. With the caretaker government unable to calm tensions, the military stepped in and dismissed the interim administration. Temporarily imposing martial law and a curfew, as well as suspending much of the constitution, the head of the Royal Thai Army, General Prayuth insisted that the move was designed solely to restore order.

While there have not been any major new defence deals during 2014, in part due to overseas reluctance in the wake of the coup, there have been a number of small but significant developments. Thailand's Navy is currently in talks with US defence contractor Havelsan over upgrades for its FFGs, or Oliver Hazard Perry guided missile frigates. These upgrades will see Thailand's fleet of FFGs better suited for modern combat with new sensors and weapons all of which will be integrated into a central command system. However, the military's intervention in domestic politics has jeopardised international deals and co-operation, particularly those involving the US.

In Q214, Thailand completed the acquisition of the last of its 12 Gripen fighter jets from Swedish manufacturer Saab. This offers a more affordable fighter jet option, which remains an important consideration, in spite of the generous defence budget, owing to inefficient expenditure processes.

In...

Table of Contents

BMI Industry View
7
SWOT
9
Thailand Security SWOT
9
Thailand Defence & Security SWOT
11
Political
13
Economic
14
Business Environment
16
Industry Forecast
18
Defence Expenditure
18
Table: Thailand's Government Defence Expenditure, 2012-2018
18
Table: Thailand's Defence Expenditure Scenario - Changing % Of GDP, 2014-2018 (USDmn)
20
Table: Thailand's Armed Forces ('000 personnel, unless otherwise stated)
21
Defence Trade
21
Table: Thailand's Defence Trade Balance, 2012-2018 (USDmn)
23
Imports
23
Table: Thailand's Defence Imports, 2012-2018 (USDmn)
24
Exports
25
Table: Thailand's Defence Exports, 2012-2018 (USDmn)
25
Macroeconomic Forecasts
26
Economic Analysis
26
Table: Macroeconomic Forecasts (Thailand 2010-2016)
30
Industry Risk Reward Ratings
31
Asia Security Risk Ratings
31
Table: Asia Security Risk Ratings
31
Table: Asia State Vulnerability To Terrorism Index
32
Thailand Security Risk Ratings
33
Market Overview
35
Thailand Defence Market Overview
35
Recent Developments
35
Armed Forces
35
Domestic Industries
37
Imports
38
Exports
43
Thailand Security Overview
43
Domestic Threats
43
Table: Thai Muslim Insurgents
46
Regional threats
49
International Threats
49
Company Profile
52
Loxley
52
Minebea
54
Regional Overview
56
South East Asia Security Overview
56
Global Industry Overview
69
Political Risk Analysis
69
Methodology
74
Industry Forecast Methodology
74
Sector-Specific Methodology
75
Sources
76
Security Risk Ratings Methodology
76
Table: Indicators And Weighting
77

The Thailand Defence & Security Report features Business Monitor International (BMI)'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 Thailand Defence & Security Report provides professionals, consultancies, government departments, regulatory bodies and researchers with independent forecasts and regional competitive intelligence on the Thai defence and security industry.

Key Benefits

  • Benchmark BMI's independent defence and security industry forecasts on Thailand to test other views - a key input for successful budgetary and strategic business planning in the Thai 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