Business Monitor International


Jordan Defence & Security Report

Published 20 November 2013

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Jordan Defence & Security Report

Amidst regional instability, BMI is forecasting Jordan's defence spending to grow in 2014. In the increasingly volatile Middle East, Jordan is facing an active threat from the civil war in Syria. We are estimating that defence spending will grow by 12.0% over 2014 to US$1.73bn. This follows rather slower growth of 8.1% over 2013, when the budget has totalled US$1.55bn. Although strong ties link the Jordanian regime and US and UK defence sectors, a stagnating economy and ongoing political risks mitigate against a wholly positive 2014 outlook.

Jordan's security threats are primarily regional. Following the defeat of the Muslim Brotherhood-led regime in Egypt in 2013, domestic Jordanian Islamists have been significantly weakened. The ruling regime - headed by King Abdullah II - enjoys good relations with the US and UK (as reflected in significant military cooperation and sales). However, despite having a peace treaty with Israel, tensions caused by the Syrian civil war and US-Iran diplomacy place the kingdom in a precarious geopolitical position.

That said, Jordan has seen some significant defence developments in 2013, including:

  • A major border-security defence contract signed with US firm, Raytheon

  • Ongoing participation in UN-lead peacekeeping efforts, making Jordan the eighth-biggest contributor internationally.

  • A large-scale joint-forces exercise with US and other nations on Jordanian soil in mid-2013 ('Operation Eager Lion'). Hundreds of US troops have remained in the country since; something which could prove a liability if the US becomes more involved in the Syrian conflict.

Table of Contents

Executive Summary
5
SWOT Analysis
7
Jordan Security SWOT
7
Jordan Defence Industry SWOT
8
Jordan Political SWOT
9
Jordan Economic SWOT
9
Jordan Business Environment SWOT
10
Global Political Outlook
11
Middle East Security Overview
14
The Strategic Outlook For The 2010s
14
The Middle East In A Global Context
14
Challenges And Threats To Stability And Security
15
Regional Power Dynamics
25
Nuclear Proliferation
27
External Powers
28
Scenarios For The Middle East
30
Scenario Three: Political Liberalisation Takes Hold
31
Security Risk Ratings
32
Table: Middle East And Africa Defence & Security Ratings
32
Table: Middle East And Africa State Vulnerability To Terrorism Index
33
Jordan's Security Risk Ratings
33
Political Overview
35
Domestic Politics I
35
More Of The Same, For Now
35
Domestic Politics II
38
Prime Minister Set To Resign-
38
Long-Term Political Outlook
40
Long-Term Political Outlook - Further Reforms On The Horizon-
40
Jordan Security Overview
43
Internal Security Situation
43
Terrorism
46
Ongoing Threats
48
Southern Dissent
49
Latest Developments
49
Regional External Security Situation
51
International
52
Latest Developments
54
Armed Forces And Government Spending
56
Armed Forces
56
Defence Equipment
57
International Deployments
57
Table: Jordan's Foreign Deployments
58
Market Overview
59
Arms Trade Overview
60
Industry Trends And Developments
63
Procurement Trends And Developments
65
Latest Developments
66
Industry Forecast Scenario
68
Armed Forces
68
Table: Armed Forces, 2002-2008 ('000 personnel, unless otherwise stated)
68
Table: Manpower Available For Military Service, 2010-2017 (aged 16-49, unless otherwise stated)
68
Defence Expenditure
68
Table: Jordan's Defence Expenditure, 2010-2017
69
Table: Expenditure Scenario - Changing % Of GDP, 2010-2017
70
Defence Trade
71
Key Risks To BMI's Forecast Scenario
71
Macroeconomic Forecast
71
Slowdown Ahead
71
Table: Jordan - Economic Activity, 2011-2016
74
Company Profiles
75
Indigenous Manufacturers
75
King Abdullah II Design and Development Bureau (KADDB)
75
Joint Ventures
77
Jordan Light Vehicle Manufacturing (JLVM)
77
Foreign Manufacturers
78
Raytheon Technical Services Company (RTSC)
78
RUAG Land Systems
79
General Dynamics Land Systems (GDLS)
80
United Defense
80
BMI Methodology
81
How We Generate Our Industry Forecasts
81
Defence Industry
81
Sources
82

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

Key Benefits

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

    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 Rankings provide 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.

    Domestic Security Overview

    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.

    BMI Industry Forecast Scenario

    Historic data series and forecasts to end-2018 for key industry indicators supported by explicit assumptions, plus analysis of key downside risks to the main forecast.

    Budgets & Expenditure: Defence expenditure (local currency and US$bn); defence expenditure (% of total budget); defence expenditure (% of GDP); defence expenditure per capita, US$; defence budget (local currency and US$bn).

    Employment: Employment in arms production (`000s); employment in arms production (% of labour force).

    Macroeconomic: BMI's forecasts and analysis of all headline macroeconomic indicators, including real GDP growth, inflation, fiscal balance, trade balance, current account and external debt.

    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.

    Domestic Security Overview

    The reports also provide a regional overview which details specific issues and flashpoints affecting , along with potential risks in the coming year.

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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