2014-04-22 01:35:01 - Future of the Bruneian Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2018 - a new market research report on companiesandmarkets.com
Expenditure in the Brunei defence market registered a CAGR of 10.3% during the review period and values US$0.5 billion in 2013. The focus of the Bruneian government will be on modernization initiatives, border disputes, and the prevention of international terrorism.
Brunei´s defense budget is small compared to large defense spenders and even its neighboring countries. With US$0.5 billion set aside for its 2013 defense budget and projected figures of US$0.6 billion for 2018, the country will find it hard to convince investors and suppliers to treat Brunei as a preferred destination for investment. Moreover, the moderate security threat to the nation and a relatively small population do not warrant large capital or revenue defense expenditure. Consequently, the purchase of military equipment
and hi-tech arms and ammunition gets affected.]
[Brunei´s foreign investment policies are unclear, in particular, the limits on foreign equity participation and the sectors in which investment is restricted. In addition, military procurement is a closed process with no clear cut criteria to be met in order to secure an order. This creates uncertainty among investors and poses a serious challenge to foreign direct investment in the sector.]
The Brunei defense industry is mainly managed by RBTS which is a semi-government-owned firm and the participation from other domestic private companies is negligible. Therefore, the majority of its military equipment is purchased through import channels. Due to the lack of manufacturing capabilities, the nation has no export contracts. Furthermore, the country is still in its nascent stage and is expected to explore better procurement opportunities and to prioritize other major areas in order to enhance the country´s defense capabilities.
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