Israel's defense expenditures in 2014 were 5.2% of the country's gross domestic product (GDP) making Israel7th in the world for military expenditure as apercentage of GDP according to Global Aerospace and DefenseOutlook 2016, releasedby consulting giant Deloitte.
Oman topped the list (11.6%), followed by Saudi Arabia (10.4%), and South Sudan (9.3%).
Israel was17th in military spending in absolute terms. Its military expendituretotaled $15.9 billion in 2014.
The list of 25countries with the largest defense expenditures was led by the US; the superpower spent $610 billion on defense 40% of the total expenditures worldwide. In distant second place was China, which spent $216.4 billion. Russia wasan even more distant third, with$84.5 billion.
The report, authored by Tom Captain,Vice Chairman and US Aerospace & DefenseLeader for Deloitte LLP, and Global A&D Leader for Deloitte Touche Tohmatsu Limited,projectsgrowth in the global aerospace and defense market of3% in 2016, afterthe marketgrew2% in 2014 and 1.5% 2015.
Captain expects a recovery in global defense expenditures in the coming years because of the expanding threat from terrorists, ongoing security tensions, and a lack of stability in the Middle East.
A $30 billion increase in the US defense budget, along with increases in the defense budgets of the UK, France, Japan, and some Middle Eastnations, is expected to drive the growth in military industries across the world.
According to Captain, the recovery will reach companies in 2016 ascountries seek to modernize their defensive capabilities and integrate innovative technologies for cyber warfare, intelligence gathering, electronics, and precision munitions.He believes this will be accompanied by greater investment in research and development. The US budget for R&D is expected to reach billions of dollars.
Speaking to “Globes”, Deloitte Israel strategy leader Eli Tidhar welcomed the report as a positive sign for the Israeli defense industry after years of facing challenging conditions as funding “dried up” around the world.
“The Israeli defense industry has an advantage because it provides solutions to the changing needs of modern militaries to deal with security threats, which require the use of more precise measures and the integration of unmanned and robotic capabilities. Digital and electronic warfare takes a more prominent role in the future battlefield.”
Tidhar says part of the solution for security challenges around the world is the integration global defense companies are pushing between commercial products and technologies and the needs of the military.
“The notion of a balance between military and civilian application is very developed in Israel, and we can expect thataspect of the Israeli defense industry to be advantageous in competingwith global firms.”
Published by Globes [online], Israel business news - www.globes-online.com - on February 21, 2016
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