Business Monitor International


Malaysia Defence & Security Report

Published 08 October 2014

  • 89 pages
  • Instant access to your report online and PDF format through your account library
  • Includes 3 free updated quarterly reports
 
$1,295.00
Malaysia Defence & Security Report

BMI View:   As Malaysia enters a new financial year, we expect to see an upward trend in military and defence procurement. 2014 saw very little activity in the defence sector as the government reviewed its defence procurement strategy. The release of a new five year development plan and a review of Malaysia's defence offsetting programme could yield changes for the indigenous defence sector in 2015. However, we forecast a marginal rise in defence spending, which remains a low priority for the government which is trying to address a budget deficit. Meanwhile, Malaysia enjoys peace and stability with regards to internal and external security threats. Key concerns include continued incursions by Filipino groups and rising piracy in regional waters.

We expect defence spending to remain a low priority under the 2015 budget, which will focus on economic growth, improving the fiscal position, and raising living standards. BMI forecasts a small increase in defence spending through 2015, rising in line with national GDP growth. This will leave the budget allocation to the defence sector unchanged as a percentage of GDP, dropping marginally from 1.5% in 2014 to 1.4% in 2015.

Defence spending was a low priority under the 2014 budget which was tailored by the ruling party to secure popular support ahead of the 2014 general election. As a result, various requests for financing by the armed forces have been denied and many programmes, such as the multirole combat fighter programme, have been put on hold while the government has been working on a new five-year national development plan which will be released in June 2015. New defence procurement strategies will therefore be announced in line with the 11 th Malaysia Plan (2016-2020). Defence officials have also ordered a review of the defence offsetting programme, which has so far failed to drive meaningful development of the indigenous defence sector. Local defence firms under-invest in research and development, and...

Table of Contents

BMI Industry View
7
SWOT
9
Malaysia Security SWOT
9
Malaysia Defence SWOT
12
Political
14
Economic
16
Business Environment
18
Industry Forecast
20
Defence Budget
20
Table: Defence Expenditure (Malaysia 2011-2018)
20
Armed Forces
21
Table: Armed Forces Personnel (Malaysia 2004-2011)
22
Table: Manpower Available For Military Service (Malaysia 2011-2018)
23
Defence Sector Production
23
Table: Defence Trade Balance (Malaysia 2011-2018)
26
Imports
26
Table: Defence Imports (Malaysia 2011-2018)
26
Exports
28
Table: Defence Exports (Malaysia 2011-2018)
28
Key Risks To Our Forecast
29
Macroeconomic Forecasts
30
Table: Economic Activity (Malaysia 2009-2018)
35
Industry Risk Reward Ratings
36
Asia Security Risk Ratings
36
Table: Asia Security Risk Ratings
36
Table: Asia State Vulnerability To Terrorism Index
37
Malaysia Security Risk Ratings
38
Market Overview
41
Malaysia Defence Market Overview
41
Armed Forces
41
Domestic Industries
42
Imports
43
Corruption Scandals
47
Malaysia Security Overview
47
Domestic Threats
47
Regional Threats
49
International Threats
51
Company Profile
53
AIROD
53
Composite Technology Research Malaysia (CTRM)
55
Deftech
57
EADS
59
Malaysia Marine and Heavy Engineering (MMHE)
60
SME Ordnance
62
Regional Overview
63
South East Asia Security Overview
63
Global Industry Overview
76
Political Risk Analysis
76
Methodology
81
Industry Forecast Methodology
81
Sector-Specific Methodology
82
Sources
83
Security Risk Ratings Methodology
83
Table: Indicators And Weighting
84

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

Key Benefits

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

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