2009-10-23 18:25:02 -
Kuwait Defence and Security Report Q4 2008 - a new market research report on companiesandmarkets.com
www.companiesandmarkets.com/Summary-Market-Report/kuwait-defence ..
Kuwait has a small number of indirect security threats, but benefits from the external security endowed upon it by the US. In the past, its geo-strategic location made it precarious to threats, from an Iraqi invasion in 1991 and the possibility of an Iraqi missile strike on Kuwait prior to the US-led coalition invasion of Iraq in 2003. Kuwait faces a limited internal threat from al-Qaeda-linked militants operating on Kuwaiti soil. As with many of the regions ruling regimes, there is a degree of protest from within disaffected sections of the population. The emirate will remain concerned with the ongoing instabilities in post-war Iraq and the possibility of Kuwaiti jihadis returning from Iraq.
Kuwait lacks an established indigenous defence industry of
significance, and its armed forces are almost entirely reliant upon procurements from foreign sources for equipment and training. The Kuwaiti economy is currently able to support a high level of military expenditure as high oil prices raised the oil revenue in recent years, leading to record excess budget surpluses. The continuation of the upgrading of Kuwaiti military hardware and equipment is unlikely to decrease in the near future, given the ongoing US involvement in the region and the current strength of the Kuwaiti economy. On this basis, high military expenditure is therefore likely to continue into the foreseeable future. US foreign military assistance will continue to dominate Kuwaits imports trade with the vast majority of its arms procurements being supplied by US-based companies. Kuwait does, however, increasingly obtain arms from a wider source of suppliers, including European and Asian states. The emirate does not have an extensive arms export industry.
The macroeconomic situation remains generally positive, notwithstanding its dependence on oil prices.
We are forecasting robust real growth for Kuwait throughout the forecast period. This will largely be driven by expanding real oil and gas output and government spending, rather than the more sustainable components of investment or consumer spending. The former will be constrained by a less than ideal business environment, and the latter by falling oil prices (and the feed-through to personal wealth), and, in the early part of the forecast period, inflation. Higher interest rates towards the end of the five-year period may also dampen consumer confidence. Nonetheless, we still see a rate of 7.2% this year, then a drop to 6.3% in 2009, 5.3% in 2010, 3.8% in 2011 and 3.7% in 2012.
