Croatia Defence and Security Report Q1 2013
Business Monitor International, October 2012, Pages: 59
The Croatia Defence and Security Report provides industry professionals and strategists, corporate analysts, defence and security associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Croatia's defence and security industry.
BMI’s Croatia Defence & 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 broadly 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.
BMI has made some modifications to the Croatia Defence and Security report over the previous quarter.
These include:
- A detailed discussion of the modus operandi of defence decision-making in Croatia.
- An outline of the country’s grand strategy and tasks of its armed forces.
- A full order of battle for the Croatian army, air force and navy.
- Amended figures for Croatia’s 2012 defence budget.
Executive Summary 5
SWOT Analysis 7
Croatia Security SWOT 7
Croatia Defence Industry SWOT 8
Croatia Political SWOT 9
Croatia Economic SWOT 9
Croatia Business Environment SWOT 10
Global Political Outlook 11
Europe Security Overview 14
The Strategic Outlook For The 2010s 14
Europe In A Global Context 14
Europe's Key Security Issues Over The Coming Decade 14
The Future Of The Eurozone And EU 14
EU Expansion 15
NATO Expansion And Relations With The US 15
Post-Qadhafi Libya 16
Relations With Russia 17
Relations With Turkey 17
The Balkans 18
Organised Crime 18
Islamist Terrorism 19
The Greater Black Sea Region 19
The Armenia-Azerbaijan Dispute 20
Security Risk Analysis 22
BMI’s Security Ratings 22
Table: Europe Security Risk Ratings 22
Table: Europe State Terrorism Vulnerability To Terrorism Index 23
Croatia’s Security Risk Ratings 24
Political Overview 26
Strained Relations With Serbia Only Temporary 26
Security Overview 28
Internal Security 28
External Security Situation 28
Armed Forces And Government Spending 29
Table: Croatia’s Deployments 34
Weapons of Mass Destruction 35
Market Overview 36
Table: Key Players In Croatia’s Defence Sector 37
Arms Trade Overview 37
Industry Trends And Developments 38
Croatia Defence & Security Report Q1 2013
© Business Monitor International Ltd
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Industry Forecast Scenario 39
Table: Croatia's Armed Forces Personnel, 2005-2009 ('000 personnel, unless otherwise stated) 39
Table: Croatia's Manpower Available For Military Services, 2010-2017 (aged 16-49, unless otherwise stated) 39
Table: Croatia's Defence Expenditure, 2010-2017 40
Table: Croatia's Defence Expenditure Scenario – Changing % Of GDP, 2010-2017 (US$mn) 41
Table: Croatia's Defence Exports, 2010-2017 (US$mn) 42
Table: Croatia's Defence Imports, 2010-2017 (US$mn) 43
Table: Croatia's Defence Trade Balance, 2010-2017 (US$mn) 44
Macroeconomic Outlook 45
Recession In Full Swing 45
Table: Croatia – Economic Activity, 2011-2016 47
Company Profiles 48
Duro Dakovic 48
Elmech Razvoj 49
Kraljevica Shipyard 50
Raytheon 51
RIZ-Transmitters 52
Country Snapshot: Demographic Data 53
Table: Croatia's Population By Age Group, 1990-2020 ('000) 54
Table: Croatia's Population By Age Group, 1990-2020 (% of total) 55
Table: Croatia's Key Population Ratios, 1990-2020 56
Table: Croatia's Rural And Urban Population, 1990-2020 56
BMI Methodology 57
How We Generate Our Industry Forecasts 57
Defence Industry 57
Sources 58
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