Jane's Annual Defense Report 2012
IHS Jane's Annual Defence Report reviews the 2012 state of defence for several key regions; The Americas, Europe, Asia-Pacific, the Middle East and Africa, with outlook into the year ahead in 2013.
The 50-page guide also highlights changes and trends within the worldwide industry, including:
- Top-level consolidation
- Mergers and acquisitions
The military-geopolitical year in review.
The past 12 months have certainly served to reemphasise that the post-ColdWar global paradigm continues to shift – and not to a safer state. We thus head into 2013 with a North Korean satellite launch (read ‘ballistic missile test’) imminent, an ongoing and bloody conflict in Syria, and the potential for an Israeli attack on Iran’s nuclear facilities. The prospect of the latter, during that closing window of opportunity when it could still make a difference to whether Tehran becomes a nuclear-armed state or not, now seems to be beyond mere rhetoric. Of the military geopolitical red lines in the world, this is certainly one that is most clear cut.
The US military’s focus in 2012 has mainly been on preparing to transition the security lead in Afghanistan to local forces while looking ahead to a future beyond the war there and in Iraq. Pentagon officials are also working to effect a strategic rebalance towards the Asia-Pacific that could yet be undermined by budget cuts.
For the US armed forces, 2012 marked the beginning of some interesting and important strategic shifts, with the US Department of Defense (DoD) proactively seeking to re-align itself as it heads into a potentially very different era. For the past decade, theUS military has been engaged in a major ‘irregular’ war in Iraq, another in Afghanistan, a global counter-terrorism effort, and a relatively brief military intervention in Libya. During this time it has also been funded with defence budgets that steadily increased and readily bankrolled urgent needs such as unmanned systems, aerial intelligence, surveillance and reconnaissance (ISR) assets, and mine resistant ambush-protected (MRAP) vehicles. The next decade, however, could look quite different.......
Money, or the lack of it, continues to be Europe’s greatest concern, with defence coffers continuing to be raided to stave off sovereign debt troubles. However, adversity has engendered unity, with 2012 seeing many European nations looking to co-operate on issues ranging from policy to procurement.
Managing declining defence budgets remained the principal theme for a Europe in 2012 still struggling under the burden of severe economic pressures. Several elements were increasingly played upon, with NATO’s ‘SmartDefence’ and the European Union’s pooling and sharing (P&S)
initiatives coming to the fore asameans of trying to stem the potential haemorrhaging of European military capability that hangs over efforts to restrain defence spending. The
impending drawdown from Afghanistan also took on an increasing prominence this year, with some key European nations choosing to hasten their exit from the conflict.
TheWest’s stand-off with Russia over ballistic missile defence continued, despite European fears of being abandoned by a United States increasingly looking toward the Pacific rather than Europe. Meanwhile, the spectre of conflict onEurope’s borders – including in Syria and Nagorno-Karabakh – present challenges for Europe going into 2013.
Afghanistan continues to dominate European defence issues and, with the majority of Europe’s nations still deployed in theatre, the forthcoming end of the International Security Assistance Force (ISAF) mission in 2014 has been foremost on many leaders’ and defence ministers’ minds.
Financial concerns, meanwhile, had an impact ondefence budgets, leading to the cancellation and cutting back of several major equipment acquisitions.
It was a characteristically busy year in the Asia-Pacific, with North Korea’s failed satellite launch (and another attempt imminent as JDW closed for press), China’s commissioning of its first aircraft carrier and unveiling of a new stealthy fighter, territorial spats in the South and East China seas, and insider attacks in Afghanistan.
Every year one phrase comes to sum up NATO’s Afghanistan campaign for the previous 12 months. In 2012, the 11th year of the conflict, that phrase was ‘green-on-blue’. Attacks on NATO troops by disgruntled Afghan National Security Forces (ANSF) personnel – or insurgents masquerading as ANSF soldiers–were responsible for more than 50 deaths in 2012: an escalation
in casualties that undermined NATO’s plans to use its troops to mentor the fledgling Afghan National Army and directly led to the early withdrawal of all French troops following the deaths of 4 soldiers and injuries to 15 others in Kapisa province on 20 January.
NATO and its International Security Assistance Force (ISAF) responded first by suspending training, and then implementing a mixture of soft and hard solutions: cultural sensitivity training to avoid more Koran burnings, better intelligence and biometric checks on recruits, and a ‘guardian angel’ system, under which one ormore ISAF soldiers act as armed bodyguards when working with ANSF troops.
Questions also remain about how viable the new Afghan army is. A report by the US Special
Inspector General for Afghanistan Reconstruction published on 30 October found that “the
Afghan government will likely be incapable of fully sustaining ANSF facilities after the transition
in 2014 and the expected decrease in US and coalition support”.
The Middle East and Africa
The interplay between the often-competing demands of the Arab Spring, war on terrorism and the Sunni-Shia divide make it difficult to predict events in the Middle East and North Africa over the coming year. Nevertheless, the war in Syria and the stand-off over Iran’s nuclear programme look set to be the defining issues.
The Middle East andNorth Africa look set for more political upheaval and armed conflict in2013, most notably in Syria. Even if President Bashar al-Assad goes into exile, his countrywill still be awash with weapons and controlled by numerous militias, like Libya in thewake of its conflict last year.
With its ethnic and sectarian divisions, Syria is much more likely to become a proxy battleground for the region’s various competing powers and ideologies. This could help Al-Qaeda and its fellow travellers build on the comeback they have made in Iraq since the withdrawal of US forces.
At the same time, Israel is threatening an imminent attack on the Iranian nuclear programme: a move that risks provokingawider conflict in the Gulf, as well as between Israel and Tehran’s Palestinian and Lebanese allies.
Western austerity and emerging market growth continued to reshape the world defence landscapes in 2012 as Chinese, European and North American contractors in particular sought new horizons. Optimism, however, remained surprisingly high in the face of uncertainty.
Defence industries worldwide continued efforts to adapt to a shifting global market during 2012, with Western contractors seeking to mitigate against falling core market spending and emerging Eastern players pushing further onto the world stage. Chinese defence and aerospace companies
continued an acquisitions spree in theUnited States, while the North American and European
markets sawmerger efforts on a scale unprecedented in recent times.
Defence spending in the Western world contracted byUSD47 billion between 2011 and 2012, meanwhile, forcing the sector’s participants to redouble efforts to increase exposure to adjacent markets. Markets beyond Europe andNorthAmerica, in contrast, grew by USD38 billion, suggesting that the rebalancing of the world market is continuing (IHS Jane’sDefence Budgets figures – values constant 2012 USD).
Despite the bleak headwinds facing the world’s largest defence markets, there was a surprising degree of confidence evident during 2012. The IHS Jane’s 2012 Defence Industrial Survey revealed that the worst of the spending cuts, retrenchment and job losses may already have been experienced, leading industry to look towards the blue sky beyond the clouds.