Future of the Jordan Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2022

  • ID: 4420037
  • Report
  • Region: Jordan
  • 82 pages
  • Strategic Defence Intelligence
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Jordan’s Defense Expenditure Rose from US$1.5 Billion in 2013 to US$2.1 Billion in 2017, at a CAGR of 8.28%

Jordan is arguably one of the most militarized nations in the Middle East in terms of number of heavy weapons available and defense expenditure as a percentage of GDP. The country has been inundated by an influx of refugees from war-effected neighbors such as Syria, Iraq, and Israel since 1948, a situation that has put a strain on the economy. Jordan was part of the Arab Spring, a movement of political unrest and internal conflict in the Middle Eastern nations, whereby a lack of substantive political reforms and economic restructuring by King Abdullah II caused young people to demonstrate.

Jordan’s defense expenditure rose from US$1.5 Billion in 2013 to US$2.1 Billion in 2017, at a CAGR of 8.28%, primarily due to the country’s precarious security environment aggravated by the responsibility of hosting a large refugee population. Attempts to modernize its military equipment will therefore drive its defense expenditure over the forecast period, which is projected to grow at a CAGR of 5.30% through to 2022. Jordan will maintain its budget allocation for capital expenditure at an average of 4% over the forecast period, with the US providing military aid.

Jordan has a fairly limited capital expenditure on defense with its capital budget outlay for 2017 standing at US$62.2 million. However, the country is a recipient of US military aid, which augments the country’s defense capital spending to US$534.3 million for 2017. Despite receiving US military aid, its limited defense capital expenditure does not equip the government with the bargaining power to impose offsets on procurement deals and acts as a barrier to the entry for foreign multinationals.

During 2013–2017, the country’s defense expenditure averaged US$1.8 Billion and included US$418.6 million in foreign military aid annually. Jordan’s homeland security expenditure declined from US$1.3 Billion in 2013 to US$957.3 million in 2017, as these funds were diverted to curb internal conflicts and control the overspill of refugees. During the historic period, Jordan focused on importing armored vehicles, aircraft, missiles, and artillery, which will continue to be primary weapon categories over the forecast period.

The report “Future of the Jordan Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2022” offers detailed analysis of the Jordan defense industry with market size forecasts covering the next five years. This report will also analyze factors that influence demand for the industry, key market trends, and challenges faced by industry participants.

In particular, this report provides the following
The Jordan defense industry market size and drivers: Detailed analysis of the Jordan defense industry during 2018–2022, including highlights of the demand drivers and growth stimulators for the industry. It also provides a snapshot of the country’s expenditure and modernization patterns.
Budget allocation and key challenges: Insights into procurement schedules formulated within the country and a breakdown of the defense budget with respect to capital expenditure and revenue expenditure. It also details the key challenges faced by defense market participants within the country
Porter’s Five Force analysis of the Jordan defense industry: Analysis of the market characteristics by determining the bargaining power of suppliers, bargaining power of buyers, threat of substitution, intensity of rivalry, and barriers to entry
Import and Export Dynamics: Analysis of prevalent trends in the country’s imports and exports over the last five years
Market opportunities: Details of the top five defense investment opportunities over the next 10 years
Competitive landscape and strategic insights: analysis of the competitive landscape of the Jordan defense industry. It provides an overview of key players, together with insights such as key alliances, strategic initiatives, and a brief financial analysis

Companies mentioned in this report: The King Abdullah II Design and Development Bureau (KADDB)

Scope

Jordan’s defense expenditure rose from US$1.5 billion in 2013 to US$2.1 billion in 2017, at a CAGR of 8.28% due to the country’s precarious security environment aggravated by the responsibility of hosting a large refugee population. Attempts to modernize its military equipment will therefore drive its defense expenditure over the forecast period.
In Jordan, the military is one of the largest employment generators in the public service sector. Salaries account for a higher percentage of the country’s total expenditure on defense and security. During the historic period, 96.6% of the defense budget was allocated to revenue expenditure including salaries, logistics, operational costs, training, and maintenance. The remaining 3.4% was allocated to capital expenditure. Over the forecast period, the government will maintain its current allocation to capital expenditure, averaging 3.3% of the total defense budget.
The MoD is expected to invest in border security systems & equipment, armored vehicles, and patrol boats among others.

Reasons to buy

This report will give the user confidence to make the correct business decisions based on a detailed analysis of the Jordan defense industry market trends for the coming five years
The market opportunity section will inform the user about the various military requirements that are expected to generate revenues during the forecast period. The description includes technical specifications, recent orders, and the expected investment pattern by the country during the forecast period
Detailed profiles of the top domestic and foreign defense manufacturers with information about their products, alliances, recent contract wins, and financial analysis wherever available. This will provide the user with a total competitive landscape of the sector
A deep qualitative analysis of the Jordan defense industry covering sections including demand drivers, Porter’s Five Forces Analysis, Key Trends and Growth Stimulators, and latest industry contracts

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1. Introduction
1.1. What is this Report About?
1.2. Definitions
1.3. Summary Methodology
1.4. About the Publisher

2. Executive Summary

3. Market Attractiveness and Emerging Opportunities
3.1. Current Market Scenario
3.1.1. Primary threat perception
3.1.2. Military doctrine and strategy
3.1.3. Military Fleet Size
3.1.4. Procurement Programs
3.1.5. Social, political, and economic environment and support for defense projects
3.1.6. Political and strategic alliances
3.2. Defense Market Size - Historical and Forecast
3.2.1. Jordanian defense budget to post a CAGR of 6.31% over the forecast period
3.2.2. Jordanian aggregate defense expenditure - inclusive of US military aid - will post a forecast-period CAGR of 5.30%
3.2.3. Hostility among neighboring countries and foreign military aid to drive defense expenditure
3.2.4. Jordanian defense expenditure as a percentage of GDP to average 4.2% over the forecast period
3.3. Analysis of Defense Budget Allocation
3.3.1. Revenue expenditure to continue to take precedence over capital expenditure
3.3.2. Financial Aid from the US contributes a major share of the country’s capital expenditure
3.3.3. The country’s capital budget allocations else remain low
3.3.4. Per capita defense expenditure to grow steadily over the forecast period
3.4. Homeland Security Market Size and Forecast
3.4.1. Homeland security expenditure to post a forecast-period CAGR of 2.87%
3.4.2. Internal conflicts and unauthorized activities in refugee camps will be the key factors driving HLS expenditure
3.4.3. Jordan considered at ‘moderate risk’ of terrorism
3.4.4. Jordan faces a moderate level of threat from terrorist organizations
3.4.5. Jordan has a terrorism index score of 2.9
3.5. Benchmarking with Key Global Markets
3.5.1. Jordan ranks among the lowest defense spending countries in the world
3.5.2. Jordan defense spending will remain minimal when compared to top regional spenders Saudi Arabia, UAE, Qatar and Kuwait
3.5.3. Jordan ranks low in terms of defense expenditure as a percentage of GDP
3.6. Market Opportunities: Key Trends and Drivers
3.6.1. Demand for border security systems expected to rise
3.6.2. Demand for armored vehicles likely to surge over the forecast period
3.6.3. Procurement of patrol boats expected to increase

4. Defense Procurement Market Dynamics
4.1. Import Market Dynamics
4.1.1. The majority of Jordan’s military equipment is generated through foreign imports
4.1.2. The Netherlands, the US, and Belgium were the dominant suppliers of defense equipment to Jordan
4.1.3. Aircraft and missiles dominated Jordanian defense imports
4.2. Export Market Dynamics
4.2.1. Defense exports expected to grow during the forecast period
4.2.2. Pakistan and Kenya accounted for the largest shares of Jordan’s total defense exports
4.2.3. Defense exports mainly include aircraft and armored vehicles

5. Industry Dynamics
5.1. Five Forces Analysis
5.1.1. Bargaining power of suppliers: high
5.1.2. Bargaining power of buyers: low
5.1.3. Barrier to entry: medium
5.1.4. Intensity of rivalry: low to medium
5.1.5. Threat of substitution: low to medium

6. Market Entry Strategy
6.1. Market Regulation
6.1.1. The government allows FDI in the defense industry with stipulations
6.1.2. Jordan does not impose any offset obligations
6.2. Market Entry Route
6.2.1. Budgeting Process
6.2.2. Procurement Policy and Process
6.2.3. Government-to-government deals are the preferred market entry route for foreign OEMs
6.2.4. Joint ventures and technology transfer form attractive entry routes for foreign manufacturers
6.3. Key Challenges
6.3.1. Small defense budget hinders the entry of foreign companies in Jordan
6.3.2. Corruption acts as an obstacle for market entry

7. Competitive Landscape and Strategic Insights
7.1. Competitive Landscape Overview
7.1.1. Jordanian defense industry is dominated by foreign competitors
7.2. Key Domestic Companies
7.2.1. KADDB: Overview
7.2.2. KADDB: Major products and services
7.2.3. KADDB: Recent announcements and strategic initiatives
7.2.4. KADDB: Alliances

8. Business Environment and Country Risk
8.1. Economic Performance
8.1.1. GDP per capita
8.1.2. Gross domestic product
8.1.3. Export of goods and services (LCU billion)
8.1.4. Import of goods and services
8.1.5. Gross national disposable income
8.1.6. LCU per US$ (period average)
8.1.7. Market capitalization of listed companies
8.1.8. Market capitalization of listed companies as a percentage of GDP
8.1.9. Total government cash surplus/deficit as a percentage of GDP
8.1.10. Goods exports as a percentage of GDP
8.1.11. Goods Imports as a percentage of GDP
8.1.12. Services Imports as a percentage of GDP
8.1.13. Services exports as a percentage of GDP
8.1.14. Mining, manufacturing, and utilities output

9. Appendix
9.1. About the Author
9.2. Disclaimer

List of Tables
Table 1: Jordanian Army Strength, 2017
Table 2: Jordan Air Force Strength, 2017
Table 3: Jordan Navy Strength
Table 4: Jordanian - Ongoing Development and Procurement Programs, 2017
Table 5: Jordanian - Future Procurement Programs, 2017
Table 6: Jordan Defense Expenditure (JOD Billion & US$ Billion), 2013-2022
Table 7: Total Jordanian Defense Expenditure Including US Aid, 2013-2022
Table 8: Jordanian GDP Growth vs. Defense Expenditure as Percentage of GDP Growth, 2013-2022
Table 9: Jordanian Defense Budget Split Between Capital and Revenue Expenditure (%), 2013-2022
Table 10: Jordanian Capital Expenditure Split by Allocated Capital Expenditure and US Military Aid (US$ Million),2013-2022
Table 11: Jordanian Defense Capital Budget Excluding US Aid (JOD Million & US$ Million), 2013-2022
Table 12: Jordanian Per Capita Defense Expenditure (US$), 2013-2022
Table 13: Jordan Homeland Security Expenditure (JOD Billion & US$ Billion), 2013-2022
Table 14: Terrorism Index, 2017
Table 15: Benchmarking with Key Markets - 2013-2017 vs. 2018-2022
Table 16: Jordanian Budget Formation Timetable
Table 17: Competitive Landscape of the Jordanian Defense Industry
Table 18: KADDB- Major Products & Services
Table 19: KADDB- Alliances

List of Figures
Figure 1: Jordanian Defense Expenditure (JOD Billion), 2013-2022
Figure 2: Jordanian Defense Expenditure (US$ Billion), 2013-2022
Figure 3: Defense Expenditure, Excluding US Aid (US$ Billion), 2013-2022
Figure 4: US Military Aid to Jordan (US$ Million), 2013-2022
Figure 5: Jordanian Defense Budget Excluding US Aid (US$ Billion) Vs Jordanian Defense Expenditure Including US Aid (US$ Billion), 2013-2022
Figure 6: Jordanian GDP Growth vs. Defense Expenditures Percentage of GDP Growth, 2013-2022
Figure 7: Jordanian Defense Budget Split Between Capital and Revenue Expenditure (%), 2013-2022
Figure 8: Jordanian Capital Expenditure - Allocated Capital Expenditure Vs Total Capital Expenditure (Including US Military Aid) (US$ Million),2013-2022
Figure 9: Jordanian Allocated Defense Capital Budget (Excluding US Aid) (JOD Million), 2013-2022
Figure 10:Jordanian Allocated Defense Capital Budget (Excluding US Aid) (US$ Million), 2013-2022
Figure 11: Jordanian Per Capita Defense Expenditure (US$), 2013-2022
Figure 12: Jordanian Homeland Security Expenditure (JOD Billion), 2013-2022
Figure 13: Jordanian Homeland Security Budget (US$ Billion), 2013-2022
Figure 14: Terrorism Heat Map, 2017
Figure 15: Terrorism Index, 2017
Figure 16: Benchmarking with Key Markets - 2013-2017 vs. 2018-2022
Figure 17: Benchmarking with World’s Largest Defense Spenders (US$ Billion), 2017 and 2022
Figure 18: Benchmarking with Large Defense Spenders as a Percentage of GDP, 2017
Figure 19: Jordanian Defense Import Trend, 2012-2016 (TIV values)
Figure 20: Jordanian Defense Imports by Country (%), 2012-2016
Figure 21: Jordanian Defense Imports by Weapon Category (%), 2012-2016
Figure 22: Jordanian Defense Export Trend, 2012-2016 (TIV values)
Figure 23: Jordanian Defense Exports by Country (%), 2012-2016
Figure 24: Jordanian Defense Exports by Weapon Category (%), 2012-2016
Figure 25: Industry Dynamics - Porter’s Five Forces Analysis
Figure 26: Jordanian GDP per Capita (US$), 2015-2025
Figure 27: Jordanian GDP (Current US$ Billion), 2015-2025
Figure 28: Jordanian Exports of Goods and Services (LCU Billion), 2005-2014
Figure 29: Jordanian Imports of Goods and Services (LCU Billion), 2005-2014
Figure 30: Jordanian Gross National Disposable Income (US$ Billion), 2005-2012
Figure 31: Jordanian LCU per US$, 2015-2024
Figure 32: Jordanian Market Capitalization of Listed Companies (US$ Billion), 2005-2012
Figure 33: Jordanian Market Capitalization of Listed Companies (as a percentage of GDP), 2005-2012
Figure 34: Jordanian Total Government Cash Surplus/Deficit as a Percenrge of GDP, 2005-2012
Figure 35: Jordanian Goods Exports as a Percentage of GDP, 2005-2013
Figure 36: Jordanian Goods Imports as a Percentage of GDP, 2005-2013
Figure 37: Jordanian Services Imports as a Percenatge of GDP, 2005-2013
Figure 38: Jordanian Services Exports as a Percentage of GDP, 2005-2013
Figure 39: Mining, Manufacturing, Utilities Output (in LCU Billion), 2005-2014

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  • The King Abdullah II Design and Development Bureau (KADDB)
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