Rapid Fire June 26, 2013: Global Defense Spending to Face Tectonic Shifts?

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Forecast Me Not * IHS Jane’s is making the bold prediction that aggregated Asian defense budgets will supersede North America’s by 2021. Maybe. They don’t share their methodology but from their release it appears that by “forecast” they mean “project recent past trends for straight 8 years regardless of likely disruptions.” Whether China, India or […]
Forecast Me Not

* IHS Jane’s is making the bold prediction that aggregated Asian defense budgets will supersede North America’s by 2021. Maybe. They don’t share their methodology but from their release it appears that by “forecast” they mean “project recent past trends for straight 8 years regardless of likely disruptions.” Whether China, India or Russia will really be able to grow as much as Jane’s analysts expect is subject to financial constraints and social difficulties of a different nature, but probably as strong as in the West. The IISS came up with an even bolder scenario a few months ago, but defense budget forecasts 10 years out have a tendency to end up widely off the mark.

* Granted, the following gives fuel to the idea that American spending will wane significantly for the foreseeable future: the US Army will reorganize 10 brigade combat teams (BCTs) based in the US by the end of fiscal year 2017. BCTs will become bigger to 4,500 soldiers on average, but the end strength will drop by 80,000 to 490,000 troops, with 33 BCTs down from 45. That is not a reaction to sequestration, said Army Chief of staff Odierno.

* As UK Defence Secretary Philip Hammond says in the video below, things get tough when you are at the point where debt repayments take a bigger chunk of a nation’s budget than defense. Mr Hammond has reached an agreement with his colleagues at Treasury in the context of Britain’s 2013 Spending Review.

* That Western defense spending cuts are baked in because of demographics and welfare structural trends is hard to challenge. But this doesn’t mean emerging countries can grow their military spending indefinitely. From Russia to Brazil to the Middle East, for many that depends on sustaining a “commodity supercycle” that might well be in its closing phase. Meanwhile China and India face huge imbalances that should not be papered over.

* One prediction that seems even more likely to be true if emerging military spending ends up not all what it’s cracked up to be: competition will continue to become more global and intense. Western manufacturers need the new business to compensate for diminishing orders at home, while emerging players are improving, and their governments want to prop them up.

Back to Ground Level

* India sent tenders to local-foreign teams for $300M+ in surface surveillance radars.

* France is likely to modernize its Mirage multirole jets and keep them longer than expected: Senate hearing | Zone Militaire [both in French].

* The cost of France’s Operation Serval in Mali will likely exceed 400 million euros ($520+M) by the end of 2013 according to a recent parliamentary report [PDF, in French].

* The US Army is surveying industry capabilities to provide devices that allow the collection of biometric information at a tactical level.

* The London-based International Centre for the Study of Radicalisation, in cooperation with the US-based New America Foundation, inject a dose of reality [PDF] into the prospect of succeeding at “talking with the Taliban.”

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