Future of the Jordanian Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2023

  • ID: 4576144
  • Report
  • Region: Jordan
  • 86 pages
  • Strategic Defence Intelligence
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Future of the Jordanian Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2023

Summary

On the parameters of volume of heavy weapons available and defense expenditure as a percentage of GDP, Jordan is arguably one of the most militarized nations in the Middle East. Since 1948, the country has been inundated by an influx of refugees from neighboring war-effected Syria, Iraq, and Israel - a situation that has put certain strain on the economy. Jordan was part of the Arab Spring, a movement of political unrest and internal conflict in 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$1.6 billion in 2014 to US$2 billion in 2018, at a CAGR of 6.66% 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 rise from US$2.1 billion in 2019 to US$2.6 billion by 2023, at a CAGR of 5.60%. Jordan will maintain its budget allocation for capital expenditure at an average of 3.3% over the forecast period, with the US providing military aid.

Due to a lack of domestic production capabilities, Jordan relies heavily on military imports. During the historic period, defense imports comprised aircraft, missiles, and armored vehicles from the Netherlands, Russia, Belgium, the US, the UAE, South Korea, and the UK - all of which were partly financed by the US. However, with the Trump administration is seeking to curtail US military and economic aid to Jordan from US$453.7 million in 2016 to US$353.8 million in 2019, imports could stabilize somewhat over the next five years.

During 2014-2018, defense expenditure averaged US$1.9 billion, and included an average of US$404.8 million in foreign military aid. Jordan’s homeland security expenditure declined from US$1.4 billion in 2014 to US$1.0 billion in 2018, as 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, all of which will continue to be primary weapon categories over the forecast period. Efforts to develop its domestic defense industry will present firms with growth opportunities and enhance the country’s market attractiveness.

The report "Future of the Jordanian Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2023" offers detailed analysis of the Jordanian defense industry with market size forecasts covering the next five years.

In particular, it provides an in-depth analysis of the following

  • The Jordanian defense industry market size and drivers: detailed analysis of the Jordanian defense industry during 2019-2023, 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
  • Import and Export Dynamics: analysis of prevalent trends in the country’s imports and exports over the last five years
  • Market opportunities: list of the top ten defense investment opportunities over the next 5 years
  • Competitive landscape and strategic insights: analysis of the competitive landscape of the Jordanian defense industry.

Scope

Jordan’s defense expenditure rose from US$1.6 billion in 2014 to US$2 billion in 2018, at a CAGR of 6.66% 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 rise from US$2.1 billion in 2019 to US$2.6 billion by 2023, at a CAGR of 5.60%.
Jordan will maintain its budget allocation for capital expenditure at an average of 3.3% over the forecast period, with the US providing military aid.

Reasons to buy

  • This report will give the user confidence to make the correct business decisions based on a detailed analysis of the Jordanian 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
  • Profiles of the top domestic and foreign defense manufacturers . This will provide the user with a total competitive landscape of the sector
  • A deep qualitative analysis of the Jordanian defense industry covering sections including demand drivers, Key Trends , 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 Author

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. Top Procurement Programs by Value (US$ Million) 2018-2023
3.1.6. Social, political, and economic environment and support for defense projects
3.1.7. Political and strategic alliances
3.2. Defense Market Size - Historical and Forecast
3.2.1. Jordanian defense budget, excluding US, aid to post a CAGR of 6.91% over the forecast period
3.2.2. Jordanian aggregate defense expenditure - inclusive of US military aid - will post a forecast-period CAGR of 5.60%
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 3.9% 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 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 3.76%
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 3.8
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’s defense spending will remain minimal when compared to regional peer Saudi Arabia
3.5.3. Jordan ranks low in terms of defense expenditure as a percentage of GDP
3.6. Market Opportunities: Key Trends and Growth Simulators
3.6.1. Top 10 defense market sectors by value, 2018-2023
3.6.2. Corvettes MRO
3.6.3. Survivability modernization
3.6.4. Soft body armor

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 Jordan’s defense imports
4.2. Export Market Dynamics
4.2.1. Defense exports expected to grow over the forecast period
4.2.2. Pakistan and the US accounted for the largest shares of Jordan’s total defense exports
4.2.3. Defense exports 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: 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: Jordan - Army Strength, 2018
Table 2: Jordan - Air Force Strength, 2018
Table 3: Jordan - Naval Strength, 2018
Table 4: Jordanian - Ongoing Development and Procurement Programs, 2018
Table 5: Jordanian - Future Procurement Programs, 2018
Table 6: Top Jordanian Defense Procurement Programs by Value (US$ Million) 2018-2023
Table 7: Jordan Defense Expenditure (JOD Billion & US$ Billion), 2014-2023
Table 8: Total Jordanian Defense Expenditure Including US Aid (US$ Billion ), 2014-2023
Table 9: Jordan - GDP Growth vs Defense Expenditure as Percentage of GDP, 2014-2023
Table 10: Jordan - Defense Budget Split Between Capital and Revenue Expenditure (%), 2014-2023
Table 11: Jordan - Capital Expenditure Split by Allocated Capital Expenditure and US Military Aid (US$ Million), 2014-2023
Table 12: Jordan - Defense Capital Budget Excluding US Aid (JOD Million / US$ Million), 2014-2023
Table 13: Jordanian Per Capita Defense Expenditure (US$), 2014-2023
Table 14: Jordan - Homeland Security Expenditure (JOD Billion / US$ Billion / %), 2014-2023
Table 15: Terrorism Index, 2018
Table 16: Benchmarking with Key Markets - 2014-2018 vs. 2019-2023
Table 17: Jordan - Top 10 Defense Market Sectors by Value (US$ Million), 2018-2023
Table 18: Jordanian Budget Formation Timetable
Table 19: Jordan - Top 10 Defense Suppliers by Value (US$ Million), 2018-2023
Table 20: Jordan - Competitive Landscape, 2018
Table 21: KADDB - Products and Services
Table 22: KADDB - Alliances

List of Figures
Figure 1: Jordanian Defense Expenditure (JOD Billion), 2014-2023
Figure 2: Jordanian Defense Expenditure (US$ Billion), 2014-2023
Figure 3: Defense Expenditure, Excluding US Aid (US$ Billion), 2014-2023
Figure 4: US Military Aid to Jordan (US$ Million), 2014-2023
Figure 5: Jordan - Defense Budget Excluding US Aid vs Jordanian Defense Expenditure Including US Aid (US$ Billion), 2014-2023
Figure 6: Jordan - GDP Growth vs Defense Expenditures as a Percentage of GDP, 2014-2023
Figure 7: Jordan - Defense Budget Split Between Capital and Revenue Expenditure (%), 2014-2023
Figure 8: Jordan - Capital Expenditure Allocated vs Total Including US Military Aid (US$ Million), 2014-2023
Figure 9: Jordan - Allocated Defense Capital Budget (Excluding US Aid) (JOD Million), 2014-2023
Figure 10: Jordan - Allocated Defense Capital Budget (Excluding US Aid) (US$ Million), 2014-2023
Figure 11: Jordanian Per Capita Defense Expenditure (US$), 2014-2023
Figure 12: Jordanian Homeland Security Expenditure (JOD Billion), 2014-2023
Figure 13: Jordanian Homeland Security Budget (US$ Billion), 2014-2023
Figure 14: Terrorism Heat Map, 2018
Figure 15: Terrorism Index, 2018
Figure 16: Benchmarking with Key Markets (US$ Billion / %), 2014-2018 vs 2019-2023
Figure 17: Benchmarking the World’s Largest Defense Spenders (US$ Billion), 2018 and 2023
Figure 18: Benchmarking the Region’s Large Defense Spenders as a Percentage of GDP, 2018
Figure 19: Jordan - Corvettes MRO Market Size (US$ Million), 2018-2023
Figure 20: Jordan - Survivability Modernization Market Size (US$ Million), 2018-2023
Figure 21: Jordan - Soft Body Armor Market Size (US$ Million), 2018-2023
Figure 22: Jordan - Defense Procurements in terms of Supplier Relationships, 2018
Figure 23: Jordan - Defense Imports, (US$ Million), 2013-2017
Figure 24: Jordan - Defense Imports by Country (%), 2013-2017
Figure 25: Jordan - Defense Imports by Weapon Category (%), 2013-2017
Figure 26: Jordanian Defense Export Trend (US$ Million), 2013-2017
Figure 27: Jordan - Defense Exports by Country (%), 2013-2017
Figure 28: Jordan - Defense Exports by Weapon Category (%), 2013-2017
Figure 29: Industry Dynamics - Porter’s Five Forces Analysis
Figure 30: Jordan - GDP per Capita (US$), 2015-2025
Figure 31: Jordan - GDP (US$ Billion), 2015-2025
Figure 32: Jordan - Exports of Goods and Services (LCU Billion), 2005-2014
Figure 33: Jordan - Imports of Goods and Services (LCU Billion), 2005-2014
Figure 34: Jordan - Gross National Disposable Income (US$ Billion), 2005-2012
Figure 35: Jordan - LCU per US$, 2015-2024
Figure 36: Jordan - Market Capitalization of Listed Companies (US$ Billion), 2005-2012
Figure 37: Jordan - Market Capitalization of Listed Companies as a Percentage of GDP, 2005-2012
Figure 38: Jordan - Total Government Cash Surplus/Deficit as a Percentage of GDP, 2005-2012
Figure 39: Jordan - Goods Exports as a Percentage of GDP, 2005-2013
Figure 40: Jordan -Goods Imports as a Percentage of GDP, 2005-2013
Figure 41: Jordan - Services Imports as a Percentage of GDP, 2005-2013
Figure 42: Jordan - Services Exports as a Percentage of GDP, 2005-2013
Figure 43: Mining, Manufacturing, Utilities Output (LCU Billion), 2005-2014

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