Defence`s Feeds

Americas

• DARPA has awarded eight companies contracts to work on Phase 2 of the Collaborative Operations in Denied Environment (CODE) program. The Lockheed Martin and Raytheon led program aims to make unmanned systems perform sophisticated tasks both individually and in teams under the supervision of a single human mission commander. Joining Lockheed and Raytheon include Daniel H. Wagner Associates, Scientific Systems Company, Smart Information Flow Technologies, Soar Technology, SRI International, and Vencore Labs dba Applied Communication Sciences.

• The USAF has claimed it is not looking at a road-mobile option for its next-generation intercontinental ballistic missile (ICBM). Under the Ground-Based Strategic Deterrent (GBSD) program the aging Minuteman III ICBM fleet will be replaced. Speaking about the mobile option, a service official said “We want to make sure that as we look at GBSD, we’re building it modular so if changes need to be made in the weapon system you don’t have to open up, let’s say, the software to redo the entire software.”

• Canada’s Foreign Affairs Minister Stéphane Dion has insisted that the government still has leverage over the controversial contract to sell light armored vehicles (LAVs) to Saudi Arabia. It had been earlier reported that any cancellation of the sale by the Canadian government would see them liable for a multi-billion dollar cancellation penalty. Dion assured reporters that Canada’s hands are not tied when it comes to ensuring “that the military equipment that any Canadian company is selling abroad is not used against human rights and the interests of Canada and our allies.”

Middle East North Africa

• The newly appointed defense minister of Turkey, Fikri Isik and his Pakistani counterpart met to discuss increasing bilateral defense ties. Among last Friday’s discussions was the potential sale of Turkish developed T129 attack helicopters. Other potential deals include the purchase by Turkey of the Pakistani-made Super Mushshak basic trainer aircraft.

• Kilgore Flares has been awarded a $24.8 million contract modification from the US Army to provide infrared countermeasure flares to the governments of Qatar and UAE. Delivery of the stocks is expected to be completed by June 30, 2017. Kilgore Flares, which operates within the countermeasures business group of Chemring North America, manufactures expendable IR decoy flares and other countermeasure systems.

Europe

• Aermacchi unveiled the first M346 advanced jet trainer for Poland at its plant in Venegono-Superiore. The June 6 event was attended by Polish Deputy Defense Minister, Bartosz Kownacki, the Italian State Under Secretary to the Ministry of Defence, Gioacchino Alfano, and by the Managing Director of Leonardo-Finmeccanica Aircraft, Filippo Bagnato. Warsaw has ordered eight of the aircraft in total at a cost of $383 million.

• The French and German governments are currently in discussions over an inter-governmental arms export agreement. Such a bilateral pact for foreign sales of weapons is seen as key to the future of the 50/50 joint venture holding company created by France’s state-owned Nexter and family-controlled Krauss-Maffei Wegmann of Germany, two specialists in land systems. The partnership will have annual sales of almost $2.3 billion and an order book of $10.2 billion, and employ more than 6,000 staff, the companies said.

Asia Pacific

• An Indian order worth over $200 million for Black Shark torpedoes from WASS, a subsidiary of Leonardo-Finmeccanica, has been cancelled. News of the decision comes in the wake of corruption charges involving another subsidiary of Italy’s Leonardo-Finmeccanica, AgustaWestland, and the Indian National Congress political party. A ban on new deals with Leonardo and its subsidiaries was put in place in 2014 following the coming to power of the Indian People’s Party (BJP), although existing contracts continue. No alternative for the order is currently in place.

Today’s Video

• Collaborative Operations in Denied Environment (CODE) program:

Atlas Elektronik Canada has agreed to enter into a partnership with Canadian manufacturer Magellan Aerospace to co-develop the rocket motor and warhead sections of the SeaSpider anti-torpedo torpedo (ATT).

The US Navy's newest expeditionary fast transport (EPF) vessel, the future USNS Carson City (EPF 7), has completed acceptance trials during an underway period in the Gulf of Mexico.

A consortium of Airbus Defence and Space, and Telespazio France has been contracted to provide satellite-based maritime surveillance services for the French Navy.

Russian RPG-2 Anti-Tank Rocket Launcher

Since its founding in 1983, ITIM Systems has have developed a wealth of experience by working in close association with boat builders and survey authorities.

One trouble that many of us who work in and study security sector reform have is that we find actually measuring security a challenging concept. Due to a variety of factors – lack of good data, difficulty in operationalizing complicated social issues, and the specific aspects to focus on are just a few examples –

The European Defence Agency (EDA) collects defence data on an annual basis. The Ministries of Defence of the Agency’s 27 Member States (MS) provide the data. EDA acts as the custodian of the data and publishes the aggregated figures. The 2014 and estimated1 2015 figures refer to the total for all EDA Member States2, and if not otherwise stated, they are nominal.

Key findings:

• Defence expenditure increased for the first time after six years of continuous decline
• Operation and maintenance expenditure further increased, while investment further decreased
• Defence R&T expenditure at its lowest level
• Collaboration increased in equipment procurement and European defence R&T
• Defence personnel decline slowed down
• Deployment figures noticeably decreased
• Slight progress recorded on two out of four collective benchmarks

 

Defence expenditure increased for the first time after six years of continuous decline

The year 2014 marked a turning point for the European defence expenditure, the results of the EDA 2014 Defence Data gathering exercise reveal. After a continuous six-year decline, which started in 2008 following the outbreak of the global economic and financial crises, total defence expenditure of the 27 EDA Member States increased in 2014 by 2.3% from EUR 190 billion to EUR 195 billion, compared to the previous year. This was sufficient to overcome inflation and achieve a 0.6% or EUR 1.1 billion real-term3 growth. 2015 estimates suggest a further nominal increase of 2.6% or EUR 5 billion to EUR 200 billion, the level comparable to that before the crisis. In real terms, however, this increase translates into a 0.2% or EUR 0.33 billion decrease.

This is the first time to have a decade’s perspective on the European defence spending, starting with 2005 data gathered through the pilot defence data exercise. From 2005 to 2015, although in nominal terms defence expenditure increased by 3.6% from EUR 193 billion to EUR 200 billion, in real terms there was a 10.7% or EUR 22 billion decrease.

Counting from the peak of expenditure reached in 2007 with the EDA Member States collectively spending EUR 204 billion on defence to the lowest point of EUR 190 billion in 2013, total defence spending reduced by 6.8% (EUR 14 billion) in nominal terms or by nearly 12% (EUR 24 billion) in real terms. The share of defence expenditure in GDP4 and in total government spending being as high as 1.81% and 3.86% in 2005, has been steadily decreasing since then, and in 2015, it is estimated to have dropped to the lowest recorded level of 1.40% and 2.95%, respectively.

 

Operation and maintenance expenditure further increased, while investment further decreased

As regards defence expenditure structure, the year 2014 further highlighted the trend that began to emerge back in 2011, namely that of increasing expenditure on operation and maintenance and decreasing investment. Operation and maintenance - the second largest component of total defence spend with the average share of 23% – appears to be on an upward trajectory as of 2011. During the years 2011 to 2013, it grew at an average annual rate of 2.3%, and in 2014, it jumped by 11.7% (9.8% real increase) to EUR 52.2 billion, the highest absolute and relative (26.8% of total expenditure) value since 2006. Overall, operation and maintenance expenditure increased in real terms by EUR 4.6 billion or 10.3% from 2006 to 2014.

By contrast, defence investment, comprising equipment procurement and R&D (including R&T), continues to decline – a trend that started with a sharp 11.6% real decrease in 2011 and was reinforced with another significant real fall of 9.1% in 2014. Given a relatively small volume of R&D expenditure, this result was largely driven by another component of investment – equipment procurement – which in 2014 dropped by EUR 4.3 billion or 15.0%, compared to the previous year, the largest real decrease since 2006. R&D expenditure that has been declining as well, appears to be on an upward trend since 2012. In 2013, it achieved a 1.5% increase, and in 2014, it jumped by another 16.0% to EUR 8.8 billion, the biggest nominal increase observed so far. A real increase was slightly smaller, 0.8% in 2013 and 14.1% in 2014. From 2006 to 2014, R&D expenditure decreased by almost EUR 2 billion or 18.5% in real terms.

The share of investment in total defence expenditure, traditionally accounting for around 20%, shrank in 2014 by almost two percentage points to 17.8%. Within the investment category, the share of equipment procurement, amounting to around 16% on average, reduced by over two percentage points to 13.3%, while the share of R&D increased by 0.5 percentage points to 4.5% between 2013 and 2014. On average, R&D share in total investment stood at around 4.3% between 2006 and 2014, with the highest value of 4.9% reached in 2006, and the lowest – 3.9% – in 2012.

Personnel expenditure remains the largest component accounting for slightly above half – 51.2% – of total defence spend. Despite decreasing personnel numbers, personnel expenditure increased in some countries. At the aggregate EDA level, personnel expenditure has been gradually decreasing since 2006, but in 2014, it increased by 4.1% (2.4% real increase) to EUR 99.8 billion. During the entire period from 2006 to 2014, Member States’ real expenses dedicated to personnel reduced by over EUR 19 billion or almost 17%.

 

Defence R&T expenditure at its lowest level

A slight increase (+3.2%) in R&T expenditure achieved in 2013, was lost the year after, as R&T spending dropped by 4.6% (-6.1% in real terms) back to 2012 level of EUR 2.0 billion, the lowest since 2006. R&T expenditure was highest in 2006 amounting to EUR 2.7 billion – the expected response to the ambitious goal set by the EU leaders at the Hampton Court summit in 2005 to achieve a paradigm shift in defence R&T by spending more and spending more together. However, it has been gradually decreasing since then, despite the repeated urge to invest in defence R&T now to have effective and credible defence capabilities in the future. A real-term decrease in R&T expenditure was rather dramatic, amounting to nearly EUR 1 billion or 32% from 2006 to 2014. The share of R&T in total defence spend has been gradually shrinking as well, from the biggest of 1.32% in 2006, to the smallest of 1.02% in 2014.

 

Collaboration increased in equipment procurement and European defence R&T5

Since 2012, it has not been possible to have a comprehensive picture of the total Member States’ expenditure on collaborative (including European collaboration) defence equipment procurement and R&T projects and programmes, as several Member States were not in a position to provide this data. Nevertheless, although incomplete, 2014 data suggests slight improvements on three out of four collaborative expenditure categories, namely collaborative and European collaborative defence equipment procurement and European collaborative defence R&T.

Collaborative defence equipment procurement of the reporting EDA Member States increased by almost EUR 1 billion or 20.5%, compared to 2013, to EUR 5.7 billion. The share of European collaboration within this category increased in absolute terms – from EUR 4.5 billion to EUR 5.1 billion – but decreased in relative terms – from 94.6% to 89.8% of total collaborative procurement – during the same period. In relation to total defence equipment procurement expenditure, the share of collaborative equipment procurement increased from 15.9% to 22.1%, suggesting that the remaining 77.9% were directed to non-collaborative procurements. The share of European collaborative equipment procurement in total defence equipment procurement grew from 15.0% to 19.9%, an achievement of almost five percentage points with respect to the corresponding benchmark.

As regards R&T, total collaborative defence R&T expenditure of the reporting Member States decreased by EUR 18.6 million or 9.2% to EUR 185 million from 2013 to 2014, while European collaboration part within this category increased in both absolute – from EUR 168 million to EUR 172 million – and relative – from 82.5% to 93.3% of total collaborative R&T – terms. In relation to total defence R&T, the share of collaborative R&T decreased from 9.7% to 9.3%, indicating that 90.7% were non-collaborative expenditure. Meanwhile, the share of European collaborative R&T in total defence R&T increased from 8.0% to 8.6% during the same period, signalling a minor progress in terms of the respective benchmark.

 

Defence personnel decline slowed down

Since 2006, defence personnel (military and civilian) has been steadily declining, mainly due to internal restructuring processes. Between 2008 and 2011, this was more evident (-4.9% annual average decrease), possibly due to unfavourable economic conditions. Thereafter personnel numbers continued to fall, thought at a slower pace, a rate of -1.7% per year on average. From 2013 to 2014, total civilian personnel reduced by almost 2% to 400,000, whereas military personnel - by half that (almost 1%) to 1,423,000. During the entire period from 2006 to 2014, total defence personnel shrank by almost 500,000 or 21.4%, where civilian personnel decreased by almost 85,000 or 17.5%, and military personnel – by almost 411,000 or 22.4%.

As total military personnel decreased, so did the numbers in each military personnel breakdown category. During the 2006-2014 period, Army reduced by 209,000 or 22.5% to 720,000, Maritime – by 36,000 or 16.0% to 191,000, Air Force – by 96,000 or 28.4% to 241,000, and military personnel not assigned to any of the above categories and nominated as “Other” – by 72,000 or 21.3% to 268,000. In relative terms, the shares of military personnel categories remained to a greater or lesser extent stable, with Army accounting for 52%, Maritime – for 13%, Air Force – for 18%, and Other – for 17% of the total military personnel, on average.

Investment (equipment procurement and R&D) per military has been increasing since 2006 (except in 2011) – a growth caused more by decreasing military personnel numbers, than increasing Member States’ investment – but the last two years witnessed a decline resulting from faster diminishing overall investment. In 2014, investment per military stood at around EUR 24,000, a 6.8% reduction on the 2013 figure of EUR 26,000.

 

Deployment figures noticeably decreased

The average number of troops deployed outside the European Union territory decreased by almost 46%, from 58,000 in 2013 to 32,000 in 2014, mainly due to disbanded ISAF6  security mission at the end of 2014 and withdrawal of participating Member States’ troops from Afghanistan. In relation to the overall strength of the 27 Member States’ military personnel, the share of deployed troops almost halved, from 4.0% in 2013 to 2.2% in 2014. During the period from 2006, when deployment figures were the highest, to 2014, the average number of troops deployed decreased by over 62% in absolute terms, and from 4.6% to 2.2% in relation to the total military personnel.

Total number of deployable (land) and sustainable (land) forces also decreased between 2013 and 2014 by over 13% and over 28%, respectively. In 2014, the 27 EDA Member States had in total 417,000 deployable (land) forces and 79,000 sustainable (land) forces, both numbers being the smallest since 2006. The ratio between the sustainable and a pool of deployable forces, which remained virtually stable during 2006-2013 at around 1:4, in 2014, equalled to 1:5.

After a five-year-long upward trend, costs of deployed operations decreased for the third year in a row, both in absolute terms and as a share of total defence expenditure. It reduced by over 25%, from EUR 7.4 billion (3.9% of total expenditure) in 2013 to EUR 5.6 billion (2.9%) in 2014, the lowest value and share since 2006, which is again largely a result of withdrawing Member States’ combat troops from Afghanistan. Operations costs per military deployed followed the same pattern in 2012 and 2013, but it increased in 2014 by almost 38% to EUR 176,000. This may signal that deployments become increasingly expensive, and, in the case of some Member States, can be explained by the fact that countries continue contributing to international operations financially, without sending actual troops.

 

Slight progress recorded on two out of four collective benchmarks

In 2007, EDA Member States agreed on a set of four collective benchmarks for investment. There is no obligation in terms of timelines or translation of these benchmarks into national targets.

Since 2012, due to incomplete collaborative data it is no longer possible to accurately measure progress towards two out of the four agreed benchmarks, namely European collaborative equipment procurement as a percentage of total equipment procurement (benchmark 2: 35%) and European collaborative defence R&T as a percentage of total defence R&T (benchmark 4: 20%). Nevertheless, the partial data suggests a slight increase in European collaboration in both equipment procurement (from 15.0% in 2013 to 19.9% in 2014) and R&T (from 8.0% in 2013 to 8.6% in 2014) among those countries that reported the data.

With regard to the benchmark 1 – defence equipment procurement and R&T (investment) as a percentage of total defence expenditure – the trend has been mixed. Since 2006, it has been slowly but steadily increasing, but after reaching its maximum of 21.9% in 2010, it appears to be on a decline. It stayed above the 20% benchmark from 2007 to 2012, except in 2011, but in 2014, it dropped to the lowest recorded level of 17.8%.

As for the benchmark 3, defence R&T expenditure as a percentage of total defence expenditure has been steadily declining since 2006, except in 2011 and 2013, when it slightly increased. In 2014, it dropped to the lowest level so far of 1.02%, which is barely above half of the 2% benchmark.

 

More information:

• Download the 2014 Defence Data booklet

Footnotes

1. During the 2014 Defence Data gathering round, Member States were asked to provide not only the actual defence expenditure of the previous year (i.e. 2014), but also the estimated defence expenditure of the current year (i.e. 2015). At the aggregate level, however, these estimates are only available for total defence expenditure. At the same time, a major effort has been undertaken by EDA to revise all the previous years’ data, including 2005 data collected as part of the pilot exercise, to ensure the best achievable data accuracy and comparability across Member States and over time. Consequentially, numerous figures have been revised.

2. Data in this publication do not include Denmark, which is not an EDA Member State. 2005 data do not include Bulgaria and Romania, which joined EDA in 2007. 2006–2012 data do not include Croatia, which joined EDA in 2013.

3. In order to measure real growth and ensure a “real” comparison over years, inflation needs to be taken into account. Thus, data from 2005 to 2015 has been adjusted to 2010 economic conditions (Source of deflator: European Commission, DG ECFIN, based on the weight of the EU-28).

4. As of 2014, reduced defence expenditure shares in relation to GDP in most Member States can partially be explained by the new GDP accounting methodology implemented by Eurostat, following the introduction of the new European System of National and Regional Accounts (ESA 2010).

5. All 2012-2014 figures on collaboration are partial, as several Member States were not in a position to provide the data.

6. The International Security Assistance Force (ISAF) was a NATO-led security mission in Afghanistan, established by the United Nations Security Council in December 2001 by Resolution 1386, as envisaged by the Bonn Agreement.

 

At EXPAL, we develop, manufacture, integrate and maintain equipment and solutions for the defence and security industries.

Blueprint Subsea is a British manufacturer of state-of-the-art acoustic sensors for oceanographic, hydrographic, and diving applications.

Tenmat Ltd has been providing high-quality engineering materials for more than 100 years.

JEUMONT Electric, a century-old world-class pioneer in electrical energy technologies, has a global offering in the field of HV/LV electrical rotating machines and conversion equipment.

QinetiQ Maritime provides leading-edge technical advice, design, integration, test and evaluation services throughout the naval platform, systems and equipment lifecycle to support force capability assurance to fleets around the world.

DSIT Solutions announced today that it has received a new $7.1m order for its Blackfish Hull Mounted Sonar (HMS) systems to be delivered over a two-year period.

Singapore Technologies (ST) Electronics, the advanced electronics and communications business arm of defence prime ST Engineering, has unveiled a new lightweight radio-frequency (RF) payload for high-altitude, long-endurance (HALE) unmanned aerial vehicles (UAVs) at the CommunicAsia 2016 exhibition

SAES and the Kazakhstani GIDROPRIBOR have signed a memorandum of understanding (MoU) to supply underwater systems to the Armed Forces of Kazakhstan.

What impact the EU’s regulations on Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) and on the Classification, Labelling and Packaging of chemical substances and mixtures (CLP) have had on the European defence sector since they entered into force in 2007 and 2009 respectively?

To find out, the European Defence Agency (EDA) has commissioned REACHLaw Ltd. (www.reachlaw.fi) to carry out a study the results of which should be available by November 2016. The study is directed to the entire spectrum of European defence stakeholders including, in particular, the defence industry from small and medium-sized to big multinational companies, at all levels of defence supply chain.  

The objectives of the study are threefold:

• to carry out an impact analysis of REACH and CLP regulations on the EU defence sector;

• based on the results of this analysis, to formulate practical proposals for the improvement of the REACH and CLP regulations and their current implementation regime. These proposals will then serve as a basis for the EDA and its participating Member States’ input into the European Commission’s upcoming REACH review process scheduled for 2017;    
• to collect information about the impact, on the defence sector, of other EU chemical regulations (especially the BPR, POP and ODS regulations) in order to define a strategy and proposals for improvements in the future.

The overarching goal of the EDA’s study initiative is to come up with proposals to the European Commission, EU Member States, Ministries of Defence (MoDs) and the defence industry on how to make of REACH and CLP a win-win situation which would allow for both a high level of protection for health and environment and, at the same time, a strong, competitive and innovative European defence industry.

The contractor for the study has recently kicked off the consultation process through different means (questionnaires, interviews etc.) with all competent stakeholders, such as: Member States MoDs, European Commission, European Chemicals Agency (ECHA), Member States REACH Competent Authorities and, last but not least, defence Industry.

Defence industry stakeholders are especially invited to take part in the consultation, by downloading from the dedicated contractor’s webpage (link below), filling and returning the related questionnaire/survey and any attachments to EDAsurvey@reachlaw.fi, by Thursday, 30 June 2016 at the latest.

For additional information/clarifications, the contractor’s point of contact is Mr. Tim BECKER (e-mail: tim.becker@reachlaw.fi, phone: +358 40 773 8143), while the EDA point of contact is Costas TATAROGLOU (E-mail: costas.tataroglou@ eda.europa.eu or Tel: +32 2 504 2949).

 

More information:

• Contractor’s webpage on industry consultation/questionnaire
• EDA letter - support to REACH and CLP study
• REACH - EDA project page

One corollary of Australia's acquisition of new amphibious vessel, destroyer, and support ship designs from Spanish shipbuilder Navantia is the increasingly close relationship now being forged between the Royal Australian Navy and the Armada Española. Julian Kerr and Richard Scott report The

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