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Venezuela Defence and Security Report 2016

Venezuela Defence and Security Report 2016

BMI View: Venezuela's domestic defence sector remains one of the smallest in Latin America in terms ofexpenditure, which we project at USD5.1bn in 2019. Moreover, in terms of production, Venezuela willremain an insignificant player in the world arms market. Local defence companies are capable ofmanufacturing a range of equipment - including small arms and ammunitions, simple vessels and aircraft,armoured vehicles and textiles - though their ability to develop more technologically advanced itemsremains limited. As such, the country continues to rely on foreign suppliers to meet the requirements of itsarmed forces. Over our forecast period to 2019, we expect security threats associated with conflictsinvolving neighbouring Colombia, local terrorism from drug trafficking groups and political instability todrive domestic demand for military products. As such, we forecast Venezuela's defence budget to growsteadily over the next five years.

Venezuela relies on oil export receipts to fund government spending, and rapidly falling global oil pricesheighten the existing risks from economic mismanagement and political instability. We estimate arecessionary environment in 2016, however, the defence budget will continue to rise despite inevitablebudget cuts. We forecast defence spending to reach the USD5.1bn mark in 2019. This view is reinforced bythe military's influence in government affairs and the fact that it is in President Nicolás Maduro's interest tokeep the military on side in the face of his waning popularity.


BMI Industry View
SWOT
Defence SWOT
Industry Forecast
Defence Expenditure
Table: Defence Expenditure (Venezuela 2012-2019)
Armed Forces
Table: Armed Forces Personnel (Venezuela 2005-2012)
Table: Manpower Available For Military Service (Venezuela 2012-2019)
Defence Trade
Industry Risk Reward Index
Venezuela Industry Risk Reward Index
Table: Latin America Industry Risk Reward Index
Rewards
Risks
Market Overview
Defence Market Overview
Domestic Defence Sector
Domestic Market
Table: Venezuela Defence Cooperation
Security Overview
Domestic Threats
Regional Threats
International Threats
Weapons of Mass Destruction
Company Profile
Compania Anonima Venezolana de Industrias Militares (CAVIM)
Methodology
Risk/Reward Index Methodology
Sector-Specific Methodology
Table: Defence Risk/Reward Index Indicators
Weighting
Table: Weighting of Defence Risk Reward Index

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