future of the bangladeshi defense industry market attractiveness, … · bangladesh falls under the...

Future of the Bangladeshi Defense Industry –

Market Attractiveness, Competitive Landscape

and Forecasts to 2018

Future of the Bangladeshi Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2018

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TABLE OF CONTENTS

1. Introduction ........................................................................................................................... 9

1.1. What is this Report About? ........................................................................................................... 9

1.2. Definitions ...................................................................................................................................... 9

1.3. Summary Methodology .................................................................................................................11

1.4. SDI Terrorism Index ......................................................................................................................12

1.5. About Strategic Defence Intelligence ..........................................................................................12

2. Executive Summary ............................................................................................................ 13

3. Market Attractiveness and Emerging Opportunities ........................................................ 15

3.1. Defense Market Size Historical and Forecast..............................................................................16

3.1.1. Bangladeshi defense budget to grow at a CAGR of XX% over the forecast period ................................ 16

3.1.2. Military modernization and peacekeeping missions are expected to drive defense expenditure over the

forecast period ...................................................................................................................................................... 18

3.1.3. Bangladeshi defense expenditure as a percentage of GDP set to decrease over the forecast period.... 19

3.2. Analysis of Defense Budget Allocation .......................................................................................21

3.2.1. Share of capital expenditure expected to increase over forecast period ................................................. 21

3.2.2. Need to replace obsolete equipment to drive defense capital expenditure .............................................. 23

3.2.3. The Army accounts for the majority share of defense expenditure .......................................................... 25

3.2.4. The country is expected to invest US$XX billion in its Army during the forecast period .......................... 27

3.2.5. Air Force defense budget projected to grow at a CAGR of XX% during the forecast period ................... 29

3.2.6. Navy expenditure expected to register CAGR of XX% during the forecast period .................................. 31

3.2.7. Per capita defense expenditure expected to increase over the forecast period ...................................... 33

3.3. Homeland Security Market Size and Forecast ............................................................................35

3.3.1. Bangladeshi homeland security expected to grow over the forecast period ............................................ 35

3.3.2. Efforts to combat drug smuggling and human trafficking are expected to trigger Bangladeshi homeland

security expenditure in the coming years.............................................................................................................. 37

3.3.3. Bangladesh falls under the ―some risk‖ category ..................................................................................... 38

3.4. Benchmarking with Key Global Markets .....................................................................................40

3.4.1. Bangladeshi defense budget expected to increase at a CAGR of XX% over the forecast period ........... 40

3.4.2. Bangladeshi military expenditure remains very low compared to countries with the largest defense

expenditure ........................................................................................................................................................... 42

3.4.3. Compared to countries with leading defense expenditure, the country allocates a low percentage of its

GDP towards defense ........................................................................................................................................... 43

3.4.4. Bangladesh has a moderate per-capita defense expenditure .................................................................. 44

3.4.5. Bangladesh faces some threat from terrorist organizations ..................................................................... 45

3.5. Market Opportunities: Key Trends and Growth Stimulators ......................................................47


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3.5.1. Patrolling crafts are forecast to experience an increase in demand ........................................................ 47

3.5.2. Demand for aircraft expected to surge during the forecast period ........................................................... 47

3.5.3. Demand for helicopters to mount in the coming years ............................................................................. 48

4. Defense Procurement Market Dynamics ........................................................................... 49

4.1. Import Market Dynamics ...............................................................................................................50

4.1.1. Defense imports are expected to increase over the period 2014-2018 ................................................... 50

4.1.2. Weapons manufactured in China composed majority of imports for Bangladesh.................................... 51

4.1.3. Armored vehicles and ships dominated military hardware imports .......................................................... 52

4.2. Export Market Dynamics ..............................................................................................................53

4.2.1. The country exported negligible defense goods during 2008–2012 ........................................................ 53

5. Industry Dynamics .............................................................................................................. 54

5.1. Five Forces Analysis.....................................................................................................................54

5.1.1. Bargaining power of supplier: medium to high ......................................................................................... 55

5.1.2. Bargaining power of buyer: low to medium .............................................................................................. 55

5.1.3. Barrier to entry: medium ........................................................................................................................... 55

5.1.4. Intensity of rivalry: medium to high ........................................................................................................... 55

5.1.5. Threat of substitution: medium to high ..................................................................................................... 55

6. Market Entry Strategy ......................................................................................................... 56

6.1. Market Regulation .........................................................................................................................56

6.1.1. Bangladesh does not disclose any offset obligations imposed by the country ........................................ 56

6.1.2. Foreign direct investment (FDI) in the defense sector not disclosed by the government ........................ 56

6.2. Market Entry Route .......................................................................................................................56

6.2.1. Equipment manufacturers enter the market through government-to-government deals ......................... 56

6.2.2. Joint venture and license manufacturing agreements provide an attractive market entry route .............. 56

6.3. Key Challenges .............................................................................................................................57

6.3.1. Limited defense budget deters investors from market entry .................................................................... 57

6.3.2. Corruption hinders growth of the Bangladeshi defense sector................................................................. 57

6.3.3. Chinese companies dominate the market, creating a challenge for other foreign firms .......................... 57

7. Competitive Landscape and Strategic Insights ................................................................ 58

7.1. Competitive Landscape Overview ...............................................................................................58

7.2. Key Companies .............................................................................................................................58

7.2.1. Bangladesh Ordnance Factories: overview .............................................................................................. 58

7.2.2. Bangladesh Ordnance Factories: products .............................................................................................. 58

7.2.3. Bangladesh Machine Tools Factory (BMTF) Ltd: overview ...................................................................... 59

7.2.4. Bangladesh Machine Tools Factory: products ......................................................................................... 59

7.2.5. AgustaWestland: overview ....................................................................................................................... 60

7.2.6. AgustaWestland: products ........................................................................................................................ 60


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7.2.7. AgustaWestland: recent contract wins ..................................................................................................... 60

7.2.8. Eurocopter: overview ................................................................................................................................ 61

7.2.9. Eurocopter: products ................................................................................................................................ 61

7.2.10. Eurocopter: recent contract wins .............................................................................................................. 61

8. Business Environment and Country Risk ......................................................................... 62

8.1. Demographics & Social Statistics ................................................................................................62

8.1.1. Population – Rural .................................................................................................................................... 62

8.1.2. Population - Urban .................................................................................................................................... 63

8.1.3. Population – Number of Households ........................................................................................................ 64

8.2. Economic Performance ................................................................................................................65

8.2.1. Gross Domestic per Capita....................................................................................................................... 65

8.2.2. Gross Domestic Product, current US$ ..................................................................................................... 66

8.2.3. Exports of Goods and Services ................................................................................................................ 67

8.2.4. Imports of Goods and Services ................................................................................................................ 68

8.2.5. Gross National Disposable Income .......................................................................................................... 69

8.2.6. Manufacturing Output ............................................................................................................................... 70

8.2.7. Consumer Price Index .............................................................................................................................. 71

8.2.8. Local Currency Unit per US$ .................................................................................................................... 72

8.2.9. Local Currency Unit per EURO ................................................................................................................ 73

8.2.10. Lending Rate (%) ...................................................................................................................................... 74

8.2.11. Deposit Rate (%) ...................................................................................................................................... 75

8.2.12. Real Interest Rate (%) .............................................................................................................................. 76

8.2.13. Market Capitalization of Listed Companies .............................................................................................. 77

8.2.14. Market Capitalization of Listed Companies as a % of GDP ..................................................................... 78

8.2.15. Total Government cash surplus/deficit (LCU Bn) ..................................................................................... 79

8.2.16. Government cash surplus/deficit as % of GDP (LCU) .............................................................................. 80

8.2.17. Goods Exports as a % of GDP ................................................................................................................. 81

8.2.18. Goods Imports as a % of GDP ................................................................................................................. 82

8.2.19. Goods Trade Surplus/Deficit as a % of GDP............................................................................................ 83

8.2.20. Services Imports as a % of GDP .............................................................................................................. 84

8.2.21. Services Exports as a % of GDP .............................................................................................................. 85

8.2.22. Services surplus/deficit as a % of GDP .................................................................................................... 86

8.2.23. Net Foreign Direct Investment .................................................................................................................. 87

8.2.24. Net FDI as a % of GDP ............................................................................................................................. 88

8.2.25. International reserves, including Gold ...................................................................................................... 89

8.3. Energy and Utilities .......................................................................................................................90

8.3.1. Total Conventional Thermal Electricity Net Generation ........................................................................... 90

8.3.2. Hydroelectricity Net Generation ................................................................................................................ 91


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8.3.3. Total Conventional Thermal Electricity Installed Capacity ....................................................................... 92

8.3.4. Proved Reserves of Natural Gas (Trillion Cubic Feet) ............................................................................. 93

8.3.5. Total Petroleum Consumption .................................................................................................................. 94

8.3.6. Crude Oil Proved Reserves (Billion Barrels) ............................................................................................ 95

8.3.7. Total Non-Hydro Renewable Electricity Net Generation (Billion Kilowatts) .............................................. 96

8.4. Infrastructure Quality and Availability .........................................................................................97

8.4.1. Rail lines (total route-km) .......................................................................................................................... 97

8.5. Minerals .........................................................................................................................................98

8.5.1. Mining, Manufacturing, Utilities Output ..................................................................................................... 98

8.6. Telecommunication ......................................................................................................................99

8.6.1. Telephone lines ........................................................................................................................................ 99

8.6.2. Telephone lines Penetration Rate .......................................................................................................... 100

9. Appendix ............................................................................................................................ 101

9.1. About SDI ..................................................................................................................................... 101

9.2. Disclaimer .................................................................................................................................... 101


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LIST OF FIGURES

Figure 1: Bangladeshi Defense Expenditure (US$ Billion), 2009–2013 ............................................................................................................... 16 Figure 2: Bangladeshi Defense Expenditure (US$ Billion),2014–2018 ................................................................................................................ 17 Figure 3: Bangladeshi GDP Growth vs. Defense Expenditure Growth and Defense Expenditures Percentage of GDP Growth, 2009–2013 ...... 19 Figure 4: Bangladeshi GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP Growth, 2014–

2018 ................................................................................................................................................................................................................... 20 Figure 5:Bangladeshi Defense Budget Split Between Capital and Revenue Expenditure (%), 2009–2013 .......................................................... 21 Figure 6: Bangladeshi Defense Budget Split Between Capital and Revenue Expenditure (%), 2014–2018 ......................................................... 22 Figure 7: Bangladeshi Defense Capital Expenditure (US$ million), 2009–2013 .................................................................................................. 23 Figure 8: Bangladeshi Defense Capital Expenditure (US$ million), 2014–2018 .................................................................................................. 24 Figure 9: Bangladeshi Defense Budget Allocation (%), 2009–2013 .................................................................................................................... 25 Figure 10: Bangladeshi Defense Budget Allocation (%),2014–2018 ................................................................................................................... 26 Figure 11: Bangladeshi Defense Budget Allocation for Army (US$ Million), 2009–2013 .................................................................................... 27 Figure 12: Bangladeshi Defense Budget Allocation for Army (US$ Million), 2014–2018 .................................................................................... 28 Figure 13: Bangladeshi Defense Budget Allocation for Air Force (US$ Million), 2009–2013 .............................................................................. 29 Figure 14: Bangladeshi Defense Budget Allocation for Air Force (US$ Million), 2014–2018 .............................................................................. 30 Figure 15: Bangladeshi Defense Budget Allocation for Navy (US$ Million), 2009–2013 ...................................................................................... 31 Figure 16: Bangladeshi Defense Budget Allocation for Navy (US$ Million), 2014–2018 ...................................................................................... 32 Figure 17: Bangladeshi Per Capita Defense Expenditure (US$), 2009–2013 ...................................................................................................... 33 Figure 18: Bangladeshi Per Capita Defense Expenditure (US$), 2014–2018 ...................................................................................................... 34 Figure 19: Bangladeshi Homeland Security Budget,2009–2013 ......................................................................................................................... 35 Figure 20: Bangladeshi Homeland Security Budget, 2014–2018 ........................................................................................................................ 36 Figure 21: SDI Terrorism Heat Map, 2013 .......................................................................................................................................................... 38 Figure 22: SDI Terrorism Index, 2013 ................................................................................................................................................................. 39 Figure 23: Benchmarking with Key Markets – 2009–2013 vs. 2014–2018 .......................................................................................................... 41 Figure 24: Defense Expenditure of the World’s Largest Military Spenders (US$ Billion), 2013 and 2018 ............................................................ 42 Figure 25: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2013 ..................................................................... 43 Figure 26: Per-capita Defense Expenditure of Largest Military Spenders in the World (US$), 2013 .................................................................... 44 Figure 27: Bangladeshi Defense Import Trend, 2008–2012 (TIV values) ............................................................................................................ 50 Figure 28: Bangladeshi Defense Imports by Country (%), 2008–2012 ................................................................................................................ 51 Figure 29: Bangladeshi Defense Imports by Category (%),2008–2012 ............................................................................................................... 52 Figure 30: Industry Dynamics - Porter’s Five Forces Analysis............................................................................................................................. 54 Figure 31: Bangladeshi Population – Rural (In Millions), 2009–2018 .................................................................................................................. 62 Figure 32: Bangladeshi Population – Urban (In Millions), 2009–2018 ................................................................................................................. 63 Figure 33: Bangladeshi Population – Number of Households (In Millions), 2008–2017 ....................................................................................... 64 Figure 34: Bangladeshi GDP per capita, 2008–2017 .......................................................................................................................................... 65 Figure 35: Bangladeshi Gross Domestic Product (current US$ Bn), 2008–2017 ................................................................................................. 66 Figure 36: Bangladeshi Exports of goods and services (current US$ Bn), 2002–2011 ........................................................................................ 67 Figure 37: Bangladeshi Imports of goods and services (current US$ Bn), 2002–2011 ........................................................................................ 68 Figure 38: Bangladeshi Gross National Disposable Income (US$ Bn), 2002 – 2011 ........................................................................................... 69 Figure 39: Bangladeshi Manufacturing Output (US$ Bn), 2003–2011 ................................................................................................................. 70 Figure 40: Bangladeshi Consumer Price Index, 2008–2017 ............................................................................................................................... 71 Figure 41: Bangladeshi LCU per US$, 2009–2018 ............................................................................................................................................. 72 Figure 42: Bangladeshi LCU per EURO, 2008–2017 .......................................................................................................................................... 73 Figure 43: Bangladeshi Lending Rate (%), 2002–2011 ....................................................................................................................................... 74 Figure 44: Bangladeshi Deposit Rate (%), 2002–2011 ....................................................................................................................................... 75 Figure 45: Bangladeshi Real Interest Rate (%), 2002–2011 ............................................................................................................................... 76 Figure 46: Bangladeshi Market Capitalization of listed Companies (US$ Bn), 2003–2012 .................................................................................. 77 Figure 47: Bangladeshi Market Capitalization of listed Companies as a % of GDP, 2002–2011 ......................................................................... 78 Figure 48: Bangladeshi Total Government cash surplus/deficit (LCU Bn), 2004–2011 ........................................................................................ 79 Figure 49: Bangladeshi Government cash surplus/deficit as % of GDP (LCU), 2002–2011 ................................................................................ 80 Figure 50: Bangladeshi Goods Exports as a % of GDP, 2002–2011 ................................................................................................................... 81 Figure 51: Bangladeshi Goods Imports as a % of GDP, 2002–2011 ................................................................................................................... 82 Figure 52: Bangladeshi Goods Trade Surplus/Deficit as a % of GDP, 2001–2010 .............................................................................................. 83 Figure 53: Bangladeshi Services Imports as a % of GDP, 2002–2011 ................................................................................................................ 84 Figure 54: Bangladeshi Services Exports as a % of GDP, 2001–2010 ................................................................................................................ 85 Figure 55: Bangladeshi Services surplus/deficit as a % of GDP, 2002–2011 ...................................................................................................... 86


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Figure 56: Bangladeshi Net Foreign Direct Investment (current US$ BN), 2002–2011 ........................................................................................ 87 Figure 57: Bangladeshi Net FDI as a % of GDP, 2002–2011 .............................................................................................................................. 88 Figure 58: Bangladeshi International reserves, including Gold (US$ Bn), 2002–2011 ......................................................................................... 89 Figure 59: Bangladeshi Total Conventional Thermal Electricity Net Generation (Bn KWH), 2002–2011 .............................................................. 90 Figure 60: Bangladeshi Hydroelectricity Net Generation (Bn KWH), 2002–2011 ................................................................................................. 91 Figure 61: Bangladeshi Total Conventional Thermal Electricity Installed Capacity (Million Kilowatts), 2001–2010 .............................................. 92 Figure 62: Bangladeshi Proved Reserves of Natural Gas (Trillion Cubic Feet), 2004–2013 ................................................................................ 93 Figure 63: Bangladeshi Total Petroleum Consumption (Thousand Barrels per Day), 2003–2012 ....................................................................... 94 Figure 64: Bangladeshi Crude Oil Proved Reserves (Billion Barrels), 2004–2013 ............................................................................................... 95 Figure 65: Bangladeshi Total Non-Hydro Renewable Electricity Net Generation (Billion Kilowatts), 2002–2010 ................................................. 96 Figure 66: Bangladeshi Rail lines (total route-km), 2002–2011 ........................................................................................................................... 97 Figure 67: Bangladeshi Mining, Manufacturing, Utilities Output (US$ Bn), 2002–2011 ....................................................................................... 98 Figure 68: Bangladeshi Telephone lines, 2002–2011 ......................................................................................................................................... 99 Figure 69: Bangladeshi Telephone lines Penetration Rate (per 100 people), 2002–2011 ..................................................................................100


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LIST OF TABLES

Table 1: Bangladeshi Defense Expenditure (US$ Billion), 2009–2013 ................................................................................................................ 16 Table 2: Bangladeshi Defense Expenditure (US$ Billion),2014–2018 ................................................................................................................. 17 Table 3: Bangladeshi GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP Growth, 2009–2013 ..... 19 Table 4: Bangladeshi GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP Growth, 2014–2018 ..... 20 Table 5: Bangladeshi Defense Budget Split Between Capital and Revenue Expenditure (%), 2009–2013 .......................................................... 21 Table 6: Bangladeshi Defense Budget Split Between Capital and Revenue Expenditure (%), 2014–2018 .......................................................... 22 Table 7: Bangladeshi Defense Capital Expenditure (US$ million), 2009 – 2013 .................................................................................................. 23 Table 8: Bangladeshi Defense Capital Expenditure (US$ million), 2014 – 2018 .................................................................................................. 24 Table 9: Bangladeshi Defense Budget Allocation (%), 2009–2013...................................................................................................................... 25 Table 10: Bangladeshi Defense Budget Allocation (%),2014–2018..................................................................................................................... 26 Table 11: Bangladeshi Defense Budget Allocation for Army (US$ Million), 2009–2013 ...................................................................................... 27 Table 12: Bangladeshi Defense Budget Allocation for Army (US$ Million), 2014–2018 ...................................................................................... 28 Table 13: Bangladeshi Defense Budget Allocation for Air Force (US$ Million), 2009–2013 ................................................................................ 29 Table 14: Bangladeshi Defense Budget Allocation for Air Force (US$ Million), 2014–2018 ................................................................................ 30 Table 15: Bangladeshi Defense Budget Allocation for Navy (US$ Million), 2009–2013 ....................................................................................... 31 Table 16: Bangladeshi Defense Budget Allocation for Navy (US$ Million), 2014–2018 ....................................................................................... 32 Table 17: Bangladeshi Per Capita Defense Expenditure (US$), 2009-2013 ........................................................................................................ 33 Table 18: Bangladeshi Per Capita Defense Expenditure (US$), 2014-2018 ........................................................................................................ 34 Table 19: Bangladeshi Homeland Security Budget,2009–2013 ........................................................................................................................... 35 Table 20: Bangladeshi Homeland Security Budget, 2014–2018 .......................................................................................................................... 36 Table 21: Benchmarking with Key Markets – 2009–2013 vs. 2014–2018............................................................................................................ 40 Table 22: SDI Terrorism Index ............................................................................................................................................................................ 45 Table 23: Bangladesh Ordnance Factories – Key Products and Services ........................................................................................................... 58 Table 24: Bangladesh Machine Tools Factory – Key Products and Services ...................................................................................................... 59 Table 25: AgustaWestland – Key Products and Services.................................................................................................................................... 60 Table 26: AgustaWestland – Recent Contracts ................................................................................................................................................... 60 Table 27: Eurocopter– Key Products and Services ............................................................................................................................................. 61 Table 28: Eurocopter – Recent Contracts ........................................................................................................................................................... 61


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1. Executive Summary

Bangladeshi defense budget to be driven by the government’s efforts to strengthen its armed

forces over the forecast period

Bangladesh — a country that came into existence only a few decades ago following a war of liberation in

1971 — has an armed force that comprises of three uniformed military services: the Bangladesh Army,

the Bangladesh Navy (BN) and the Bangladesh Air Force (BAF). In addition to these, the country also has

some paramilitary units: the Border Guard Bangladesh (BGB) and Bangladesh Coast Guard, which fall

under the jurisdiction of the Ministry of Home Affairs during times of peace. However, at times of war,

these organizations serve under the command of the Bangladesh Army and Bangladesh

Navy respectively.

Bangladesh’s total defense budget increased significantly over the review period, with a CAGR of XX%,

and the country invested US$XX billion in the defense sector in 2009, and increased it to US$XX billion by

2013. This trend is expected to continue during the forecast period, owing to the government’s well-defined

military modernization plans and the country’s active and consistent participation in the various

peacekeeping missions. Between 2014 and 2018 the defense budget is projected to increase from US$XX

billion in 2014, to US$XX billion in 2018, at a CAGR of XX%. Despite a rapidly growing population, the

country’s per capita defense expenditure is also expected to increase from US$XX in 2014 to US$XX in

2018.


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2. Market Attractiveness and Emerging Opportunities After decades of independence from Pakistan, Bangladesh remains an emerging market-based

economy, and intends to concentrate significantly upon economic, social and human development in

order to transform itself into a prosperous country over the upcoming decades. To protect its national

integrity, and maintain internal and external stability, the government apportioned an average of 1.4% of

its GDP for defense purposes over the review period, a cumulative figure of US$XX billion. During the

forecast period, the defense budget is expected to be US$XX billion collectively.

As Bangladesh has just two state-controlled defense equipment manufacturing units, the country has no

other option but to import military hardware from foreign defense operators. In this regard, China holds

the leading position as the arms exporter to Bangladesh, primarily due to strong diplomatic relations

shared between the two governments. Bangladesh is expected to embark upon an arms procurement

program in the future years, which will lead the government to enter into contracts and orders with other

nations.


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2.1. Defense Market Size Historical and Forecast

2.1.1. Bangladeshi defense budget to grow at a CAGR of XX% over the forecast period

The Bangladeshi defense budget grew from US$XX billion in 2009 to US$XX billion in 2013, at a CAGR

of XX%. Modernizing the armed forces remains a prime commitment of the government, and it is

working out a well-defined military hardware procurement plan in support of this aim. During the review

period, the government added a range of advanced equipment to its fleet; including anti-tank and anti-

ship missile systems, aircraft for maritime patrol, frigates, tanks and helicopters. Over the forecast

period, Bangladesh’s defense budget will increase from US$XX billion in 2014 to US$XX billion in 2018,

reflecting a CAGR of XX%. Owing to the nation’s extensive modernization goals, the government is

expected to collaborate with foreign partners and opt for the purchase of tanks, radars, various aircraft,

air defense systems, survey ships, and self-propelled guns.

The following table and figure show the Bangladeshi defense expenditure during the review period:

Table 1: Bangladeshi Defense Expenditure, 2009 - 2013

Year Defense expenditure (US$ bn)

Defense growth percentage

2009 XX XX

2010 XX XX

2011 XX XX

2012 XX XX

2013 XX XX

CAGR 2009-2013 XX%

Source: Bangladeshi Ministry of National Defense and SDI analysis © SDI

Figure 1: Bangladeshi Defense Expenditure, 2009 - 2013


Defe

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xp

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dit

ure

XX

XX

XX

XX

XX

XX

XX

2009 2011 2012 2013

Revenue Expenditure Capital Expenditure

2010

Growth Rate (%)


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The following table and figure show projected defense expenditure of the Bangladeshi over the forecast period:

Table 2: Bangladeshi Defense Expenditure, 2014-2018

Year Defense expenditure (US$ bn)

Defense growth percentage

2014 XX XX

2015 XX XX

2016 XX XX

2017 XX XX

2018 XX XX

CAGR 2014-2018 XX%


Figure 2: Bangladeshi Defense Expenditure, 2014-2018


Defe

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dit

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XX

XX

XX

XX

XX

XX

XX

2014 2016 2017 2018


2015

Growth Rate (%)


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2.2. Analysis of Defense Budget Allocation

2.2.1. Need to replace obsolete equipment to drive defense capital expenditure

The Bangladeshi government has seen an increase in capital expenditure following the government’s

decision to go for military equipment upgrades from US$XX million in 2009 to US$XX million in 2013, at

a CAGR of XX% during the review period. Keeping with the trend, the country’s military capital

expenditure is expected to escalate over the forecast period due to the need to replace obsolete

equipment and bring in more advanced arms and ammunitions. Capital expenditure is expected to

increase from US$XX million in 2014 to US$XX million by 2018, at a CAGR of XX% over the forecast

period.

The following table and chart display the Bangladeshi defense budget share of capital and revenue

expenditure during the review period:

Table 3: Bangladeshi Defense Budget Split Between Capital and Revenue Expenditure (%), 2009-2013

Year Capital Expenditure Share Revenue Expenditure Share

2009 XX XX

2010 XX XX

2011 XX XX

2012 XX XX

2013 XX XX


Figure 3: Bangladeshi Defense Budget Split Between Capital and Revenue Expenditure (%), 2009-2013


0%

20%

40%

60%

80%

100%

2009 2010 2011 2012 2013


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The following table and chart display the Bangladeshi defense budget share of capital and revenue

expenditure over the forecast period:

Table 4: Bangladeshi Defense Budget Split Between Capital and Revenue Expenditure (%), 2014 -2018

Year Capital Expenditure Share Revenue Expenditure Share

2014 XX XX

2015 XX XX

2016 XX XX

2017 XX XX

2018 XX XX


Figure 4: Bangladeshi Defense Budget Split Between Capital and Revenue Expenditure (%), 2014 -2018


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20%

40%

60%

80%

100%

2014 2015 2016 2017 2018


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2.3. Homeland Security Market Size and Forecast

2.3.1. Bangladeshi homeland security expected to grow over the forecast period

During the review period, the country’s homeland security expenditure grew at a CAGR of XX% to value

US$XX billion in 2013 and is expected grow at a slower pace to record a CAGR of XX% over the

forecast period. The nation’s homeland security expenditure is driven by the need to counter internal

security threats posed by smugglers, and to lend support to its military network. Furthermore, the nation

plans to construct a number of new police stations and outposts. Cumulatively, the country is projected

to invest US$8.0 billion in its internal security during the forecast period.

The following table and figure show the Bangladeshi HLS budget during the review period:

Table 5: Bangladeshi HLS Budget (US$ Billion), 2009 - 2013

Year HLS budget (US$ bn)

2009 XX

2010 XX

2011 XX

2012 XX

2013 XX

Source: Ministry of Public Safety, Bangladesh and SDI analysis © SDI

Figure 5: Bangladeshi HLS Budget (US$ Billion), 2009 - 2013


Ho

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Secu

rity

Exp

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dit

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XX

XX

XX

XX

XX

XX

XX

2009 2011 2012 2013 2010


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The following table and figure show the Bangladeshi HLS budget over the forecast period:

Table 6: Bangladeshi HLS Budget (US$ Billion), 2014 - 2018

Year HLS budget (US$ bn)

2014 XX

2015 XX

2016 XX

2017 XX

2018 XX


Figure 6: Bangladeshi HLS Budget (US$ Billion), 2014 - 2018


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Secu

rity

Exp

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XX

XX

XX

XX

XX

XX

XX

2014 2016 2017 2018 2015

future of the bangladeshi defense industry market attractiveness, … · bangladesh falls under the...

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