Vietnam Defence & Security Report

Published 22 December 2014

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Vietnam Defence & Security Report

We forecast that Vietnam will spend up to USD7.7bn on defence in 2015. This is a notable increase from the USD6.7bn which the country spent on defence last year. On average, Vietnamese defence expenditure has risen since the commencement of the decade. Up to and including 2019, we expect Vietnam to spend an average of USD9.3bn on defence annually, with defence spending reaching USD11.1bn in 2019.

We have given Vietnam an overall security risk index of 75 for Q115. On average, the country has scored an overall security risk index of 76 for the period February 2009 up to and including Q115. As the discussion below will illustrate, we believe that Vietnam faces a moderate risk of becoming involved in a major interstate conflict. That said, we believe that the country has a low risk of experiencing a major terrorist attack, although it does face a moderate risk of experiencing major criminal activity.

Key Risks To Outlook

Vietnam faces a number of security issues. Cambodia has accused Vietnam of performing border violations, with maritime disputes between the two countries also existing. Similarly, tensions exist with China which occupies the Paracel Islands, which are claimed by Vietnam. In addition, Vietnam continues the construction of facilities in the disputed Spratly Islands, while occasional tensions have existed in the past with Indonesia regarding illegal fishing.

Recent Developments

In October 2014, the United States took the decision to authorise the sale of lethal military equipment to Vietnam. The US has performed this change of policy to strengthen Vietnamese maritime security in the face of security threats from China. Equipment mooted for possible future sale to Vietnam include Lockheed Martin P-3 Orion maritime patrol aircraft and C-130 turboprop freighters from the same company.

Table of Contents

BMI Industry View
Key BMI Forecasts
Recent Developments
Vietnam Security SWOT
Vietnam Defence SWOT
Business Environment
Industry Forecast
Defence Expenditure
Table: Defence Expenditure (Vietnam 2011-2018)
Table: Defence Expenditure Scenario - Changing % Of GDP (Vietnam 2011-2018)
Armed Forces
Table: Armed Forces Personnel (Vietnam 2004-2011)
Table: Manpower Available For Military Service (Vietnam 2011-2018)
Defence Trade
Table: Defence Trade Balance (Vietnam 2011-2018)
Table: Defence Imports (Vietnam 2011-2018)
Table: Defence Exports (Vietnam 2011-2018)
Macroeconomic Forecasts
Economic Analysis
Table: Economic Activity (Vietnam 2009-2018)
Industry Risk Reward Ratings
Asia Security Risk Ratings
Table: Asia Security Risk Ratings
Table: Asia State Vulnerability To Terrorism Index
Vietnam Security Risk Ratings
Market Overview
Vietnam Defence Market Overview
Recent Developments
Armed Forces
Domestic Industries
Vietnam Security Overview
Domestic Threats
Regional Threats
International Threats
Regional Overview
South East Asia Security Overview
Global Industry Overview
Political Risk Analysis
Industry Forecast Methodology
Sector-Specific Methodology
Security Risk Ratings Methodology
Table: Indicators And Weighting

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

Key Benefits

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

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.


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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'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