Malaysia Defence & Security Report Q4 2014
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 11thMalaysia 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...
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.
- 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).
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.
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.
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.
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.
BMI Industry View
Malaysia Security SWOT
Malaysia Defence SWOT
Table: Defence Expenditure (Malaysia 2011-2018)
Table: Armed Forces Personnel (Malaysia 2004-2011)
Table: Manpower Available For Military Service (Malaysia 2011-2018)
Defence Sector Production
Table: Defence Trade Balance (Malaysia 2011-2018)
Table: Defence Imports (Malaysia 2011-2018)
Table: Defence Exports (Malaysia 2011-2018)
Key risks to our forecast
Table: Malaysia - Economic Activity
Industry Risk Reward Ratings
Asia Security Risk Ratings
Table: Asia Pacific Security Risk Ratings
Table: Asia Pacific State Vulnerability To Terrorism Index
Malaysia Security Risk Ratings
Malaysia Defence Market Overview
Malaysia Security Overview
Composite Technology Research Malaysia (CTRM)
Malaysia Marine and Heavy Engineering (MMHE)
Political Risk Analysis
Global Industry Overview
Global Political Outlook
Industry Forecast Methodology
Security Risk Ratings Methodology
Table: Indicators And Weighting
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