Croatia Defence and Security Report Q3 2011
Includes 3 FREE quarterly updates
BMI’s Croatia Defence and Security Report examines the military and security posture of this Balkans nation. The report has been written to provide a comprehensive overview of the security challenges faced by Croatia both now, and in the future. Several facets of Croatia’s defence and security posture are examined by the report including its defence procurement processes, military posture and strategic risks. The report posits that, despite the current financial challenges faced by the country, Croatia is continuing on a path of military modernisation.
The Croatian armed forces are continuing the reform process that began in 2006. As of 2012, they are beyond the halfway point of this initiative, and have enacted some important reforms, not least of which is the professionalisation of the country’s armed forces. The Army remains Croatia’s dominant means of power projection; with the navy performing a coastal defence and logistics role, and the air force assisting in the logistics mission, alongside its traditional mission of defending the country’s airspace.
For the time being, Croatia’s deployment to Afghanistan remains the country’s largest overseas mission, occupying up to 300 personnel to this end. Zagreb is expected to retain its deployment in Afghanistan until NATO begins to reduce its troop numbers in the country in the 2014/2015 timeframe. Beyond Afghanistan, Croatia remains committed to a number of other NATO operations, notably in the Balkans; and UN peacekeeping deployments around the world, deploying small numbers of personnel to this end.
A number of procurement projects are either ongoing or are at the planning stage, which could see the acquisition of defence equipment from Western suppliers. For example, the Army’s Infantry Fighting Vehicle fleet is being enhanced with the supply of new vehicles, while the service is also acquiring new light vehicle. In terms of armaments, the Army has an outstanding requirement for a new 155mm selfpropelled artillery system, new assault rifles, and is acquiring machineguns and night vision systems. The Army’s logistics fleet is being enhanced with new trucks and jeeps. A number of outstanding requirements also exist for the army, including new heavy equipment transporters, communications systems, air surveillance radar and weapons-locating radar.
The Croatian Air Force has a requirement to purchase between six and 12 new Multi Role Combat Aircraft (MRCA). These new aircraft are expected to be sourced from either European or American suppliers. Zagreb is currently exploring a number of options regarding how these aircraft could be purchased. One possibility includes a bilateral procurement with Slovenia which could see the aircraft organised into a joint Slovene-Croatian air defence and ground attack unit. Alternatively, Croatia has suggested the possibility of a four-way MRCA procurement in concert with Bulgaria, Romania and Turkey although, for now, this suggestion has yet to translate into a formal four-nation acquisition. Other options for Croatia include the acquisition of used combat aircraft to provide a temporary measure so as to delay the acquisition of a new MRCA until the economy improves. Alternatively, Zagreb could opt to do nothing until Croatia’s economic situation is more stable, and request that other NATO members protect its airspace until it performs an acquisition. Away from the MRCA requirement, Croatia has also shown an interest in joining NATO’s Strategic Airlift Capability Programme.
While both the Air Force and Army are either planning, or in the process of executing, significant acquisitions of new equipment, the Croatian Navy has few aspirations as far as the procurement of new equipment is concerned, beyond the eventual purchase of four patrol vessels. However, the armed forces as a whole are enhancing their strategic and tactical communications networks and systems. This has witnessed the acquisition of new radio equipment, and also battle management systems for the Army’s artillery branch.
Over the coming 12 months, Croatia is expected to continue the modernisation efforts commenced in 2006. Few expect the government to halt or abandon these initiatives. The major question regards the pace at which they can be conducted due to the current health of the Croatian economy. Continuing economic difficulties could see a number of acquisition programmes being postponed into the future in order to save funds. Given the slow pace of military procurement in Croatia, there have been no major changes to BMI’s report since Q212.
BMI’s Croatia Defence and Security Report examines the military and security posture of this Balkans nation. The report has been written to provide a comprehensive overview of the security challenges faced by Croatia both now, and in the future. Several facets of Croatia’s defence and security posture are examined by the report including its defence procurement processes, military posture and strategic risks. The report posits that, despite the current financial challenges faced by the country, Croatia is continuing on a path of military modernisation.
The Croatian armed forces are continuing the reform process that began in 2006. As of 2012, they are beyond the halfway point of this initiative, and have enacted some important reforms, not least of which is the professionalisation of the country’s armed forces. The Army remains Croatia’s dominant means of power projection; with the navy performing a coastal defence and logistics role, and the air force assisting in the logistics mission, alongside its traditional mission of defending the country’s airspace.
For the time being, Croatia’s deployment to Afghanistan remains the country’s largest overseas mission, occupying up to 300 personnel to this end. Zagreb is expected to retain its deployment in Afghanistan until NATO begins to reduce its troop numbers in the country in the 2014/2015 timeframe. Beyond Afghanistan, Croatia remains committed to a number of other NATO operations, notably in the Balkans; and UN peacekeeping deployments around the world, deploying small numbers of personnel to this end.
A number of procurement projects are either ongoing or are at the planning stage, which could see the acquisition of defence equipment from Western suppliers. For example, the Army’s Infantry Fighting Vehicle fleet is being enhanced with the supply of new vehicles, while the service is also acquiring new light vehicle. In terms of armaments, the Army has an outstanding requirement for a new 155mm selfpropelled artillery system, new assault rifles, and is acquiring machineguns and night vision systems. The Army’s logistics fleet is being enhanced with new trucks and jeeps. A number of outstanding requirements also exist for the army, including new heavy equipment transporters, communications systems, air surveillance radar and weapons-locating radar.
The Croatian Air Force has a requirement to purchase between six and 12 new Multi Role Combat Aircraft (MRCA). These new aircraft are expected to be sourced from either European or American suppliers. Zagreb is currently exploring a number of options regarding how these aircraft could be purchased. One possibility includes a bilateral procurement with Slovenia which could see the aircraft organised into a joint Slovene-Croatian air defence and ground attack unit. Alternatively, Croatia has suggested the possibility of a four-way MRCA procurement in concert with Bulgaria, Romania and Turkey although, for now, this suggestion has yet to translate into a formal four-nation acquisition. Other options for Croatia include the acquisition of used combat aircraft to provide a temporary measure so as to delay the acquisition of a new MRCA until the economy improves. Alternatively, Zagreb could opt to do nothing until Croatia’s economic situation is more stable, and request that other NATO members protect its airspace until it performs an acquisition. Away from the MRCA requirement, Croatia has also shown an interest in joining NATO’s Strategic Airlift Capability Programme.
While both the Air Force and Army are either planning, or in the process of executing, significant acquisitions of new equipment, the Croatian Navy has few aspirations as far as the procurement of new equipment is concerned, beyond the eventual purchase of four patrol vessels. However, the armed forces as a whole are enhancing their strategic and tactical communications networks and systems. This has witnessed the acquisition of new radio equipment, and also battle management systems for the Army’s artillery branch.
Over the coming 12 months, Croatia is expected to continue the modernisation efforts commenced in 2006. Few expect the government to halt or abandon these initiatives. The major question regards the pace at which they can be conducted due to the current health of the Croatian economy. Continuing economic difficulties could see a number of acquisition programmes being postponed into the future in order to save funds. Given the slow pace of military procurement in Croatia, there have been no major changes to BMI’s report since Q212.
Contents
Executive SummarySWOT Analysis
Croatia Security SWOT
Croatia Defence Industry SWOT
Croatia Political SWOT
Croatia Economic SWOT
Croatia Business Environment SWOT
Global Political Outlook
Major Risks Looming In 2012-2013
Global Flashpoints: Eurozone, Iran, Syria, Afghanistan, Korean Peninsula
Table: Election Timetable, Q212-Q113
Wild Cards To Watch
Europe Security Overview
The Strategic Outlook For The 2010s
Europe In A Global Context
Europe's Key Security Issues Over The Coming Decade
What If The Eurozone Collapses? Political Risks Assessed
Security Risk Analysis
BMI’s Security Ratings
Table: Europe Security Risk Ratings
Table: Europe State Terrorism Vulnerability To Terrorism Index
Croatia’s Security Risk Ratings
Political Overview
Domestic Politics
Potential Flashpoints For Kukuriku Government
Table: Croatia Political Overview
Security Overview
Internal Security
External Security Situation
Armed Forces And Government Spending
Armed Forces
International Deployments And Joint Exercises
Table: Croatia’s Deployments
Weapons Of Mass Destruction
Market Overview
Recent Changes
Arms Trade Overview
Industry Trends And Developments
Procurement Trends And Developments
Competitive Landscape
Table: Key Players In Croatia’s Defence Sector
Industry Forecast Scenario
Armed Forces
Table: Croatia's Armed Forces Personnel, 2005-2009 ('000 personnel, unless otherwise stated)
Table: Croatia's Manpower Available For Military Services, 2009-2016 (aged 16-49, unless otherwise stated)
Defence Expenditure
Table: Croatia's Defence Expenditure, 2009-2016
Table: Croatia's Defence Expenditure Scenario – Changing % Of GDP, 2009-2016 (US$mn)
Defence Trade
Table: Croatia's Defence Exports, 2009-2016 (US$mn)
Table: Croatia's Defence Imports, 2009-2016 (US$mn)
Table: Croatia's Defence Trade Balance, 2009-2016 (US$mn)
Key Risks To BMI’s Forecast Scenario
Macroeconomic Outlook
Back To Recession In 2012
Expenditure Breakdown
Table: Croatia – Economic Activity, 2011-2016
Company Profiles
Duro Dakovic
Elmech Razvoj
Kraljevica Shipyard
Raytheon
RIZ-Transmitters
Country Snapshot: Croatia Demographic Data
Section 1: Population
Table: Demographic Indicators, 2005-2030
Table: Rural/Urban Breakdown, 2005-2030
Section 2: Education And Healthcare
Table: Education, 2000-2003
Table: Vital Statistics, 2005-2030
Section 3: Labour Market And Spending Power
Table: Employment Indicators, 1999-2004
Table: Consumer Expenditure, 2000-2010 (US$)
Table: Average Annual Wages, 2000-2010
BMI Methodology
How We Generate Our Industry Forecasts
Defence Industry
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