Czech Republic Defence and Security Report Q1 2011

Date: January 22, 2011
Pages: 95
US$ 1,295.00
Report type: Strategic Report
Delivery: E-mail Delivery (PDF), Download

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The Czech Republic is a highly stable country, having been one of the most prosperous and secure former communist states, and locked into the EU and NATO for the past several years. Political change in the country has taken place peacefully, and this shows no signs of abatement. The Czech Republic joined the EU in 2004, and has developed strong ties with the United States. It is also on good terms with its neighbours, managing to avoid disputes that have characterised many bilateral relationships in the region. In October 2010, the Czech parliament’s upper house voted in favour of a plan to boost the country’s troop commitment in Afghanistan over the next two years, as reported by AP. By an overwhelming 57-5, the Senate agreed to deploy up to 720 servicemen in 2011, and up to 640 in 2012, meaning that in 2011, nearly 200 troops will join the 535-strong Czech contingent in Afghanistan as part of the NATO-led force. According to the defence ministry, the worsening security situation occasioned the increase. The upper house also approved plans to draw down the number of Czech troops from the NATO force in Kosovo incrementally, reducing the troop count from 550 to a mere 15 by 2012 The Ministry of Defence has angled its procurement strategy toward the needs of its forces abroad, a clear sign that it sees international commitments as a pressing priority for the military, arguably above the domestic defence of the country, which is, at present, ultra-secure. In 2010, we estimate that defence spending was cut by 15.58% in dollar terms to US$2.485bn, or US$235.90 per head. In constant price terms, there was a reduction of 17%. This is not necessarily a new phenomenon; while the sharpness of cuts in defence outlay was due to immediate fiscal pressures, there has been a downward trend in expenditure as a proportion of government spending over the past decade, from 5.2% in 2000. is the decline has been mainly due to the increased security brought by the NATO security umbrella, shifting public opinion, and the recognition that defence dynamics are changing, and large-scale investment in heavy equipment and manpower are unlikely to define defence spending in the future.

Defence spending is unlikely to meet the NATO requirement of at least 2% of the country’s GDP in the forecast period. However, BMI expects a significant rise in expenditure in the short term, as the Czech Republic’s economy and budget pick up. We forecast a rise of 4.15% in defence spending in 2011, taking it to $2.588bn, or $245.30 per person. In constant price terms, spending will rise a more modest 2%. As a proportion of government expenditure, defence spending will rise slightly to 3.0% in 2011 and 3.1% in 2012. Over the medium to long term, the outlook is steady. In constant price terms, expenditure will rise to 2005 levels in 2017, but in both nominal and constant price terms, it will rise at a low to moderate rate. All in all, the Czech Republic is unlikely to see a long-term boom in spending on its small and pareddown military, but the government will continue to commit funds to it as part of its international commitments.
Executive Summary
SWOT Analysis
Czech Republic Political SWOT
Czech Republic Economic SWOT
Czech Business Environment SWOT
Global Defence Overview
Global Hotspots
Latin America: More Of The Same
Western Europe
Central Europe
South Eastern Europe
Russia And The Former Soviet Union
Middle East: Mostly The Same Old Challenges
Sub-Saharan Africa: Definitive Elections Pending
Asia: Accommodating A More Powerful China
Wild Cards
Global Security Outlook
Central And Eastern Europe Overview
Security Risk Analysis
BMI’s Security Ratings
  Table: Europe Security Risk Ratings
  Table: Europe State Terrorism Vulnerability To Terrorism Index
Czech Republic’s Security Risk Ratings
City Terrorism Ratings
  Table: BMI’s Central And Eastern Europe And Central Asia City Terrorism Index
Security Overview
Internal Threats
Extremist Groups
Organised Crime
Latest Developments
Missile Defence System
International Terrorism
Latest Developments
Armed Forces And Government Spending
Armed Forces
  Table: Regional Armed Forces, 2007 (Including conscripted, ‘000)
Defence Reform
International Deployments
  Table: Czech Republic Foreign Deployments
Co-ordination And Joint Operations
Weapons Of Mass Destruction
Market Overview
Industry Trends And Developments
  Table: Czech Republic Defence, Key Players
Procurement Trends And Developments
Latest Developments
Industry Forecast Scenario
  Table: Czech Republic’s Defence Armed Forces 2005-2008
  Table: Czech Republic’s Defence Available Manpower for Military Service 2005-2008
Government Defence Expenditure
Defence Expenditure
Key Risks To BMI’s Forecast Scenario
  Table: Czech Republic’s Defence Expenditure Scenario: Changing % Of GDP
  Table: Czech Republic’s Defence Exports 2008-2015
  Table: Czech Republic’s Defence Imports 2008-2015
Macroeconomic Forecast
  Table: Czech Republic Economic Activity; 2007-2015
Company Profile
Aero Vodochody
How We Generate Our Industry Forecasts
Defence Industry
City Terrorism Rating
  Table: Methodology
Sources . 95
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