Colombia - Defense and Security: Increased spending driven by domestic discord (Strategy, Performance and Risk Analysis)
The aircraft category remains one of the key segments for Colombian defense and security with capital expenditure accounting for 66.9% of the total in 2016. This was followed by C4ISR Electronics & IT segment accounting for 3.6% of the total. Colombia’s total defense expenditure recorded a CAGR of 7.3%, rising from US$6.1 billion in 2012 to US$8.1 billion in 2016. It will post a forecast-period CAGR of 5.1% to reach US$10,323.5 million in 2021 due to mounting threats from Venezuela and rebel groups.
MarketLine’s premium reports provide a comprehensive overview of each market within a country’s defense industry; benchmark key performance indicators against regional and global peers; review industry trends and drivers; evaluate the competitive landscape and innovation potential of singular markets; and conduct data-driven SWOT analysis to ascertain a structured assessment of the performance of each territory represented.Key Highlights
Colombia undertakes various procurement and modernization initiatives:
Aircraft and naval ships currently used by Colombia’s armed forces are aging. In order to compete with their regional rivals in terms of technology and defense capabilities, the Colombian Ministry of Defense (MoD) is undertaking plans to modernize aging hardware and procure state-of-the-art weaponry and defense systems. The government has initiated several procurement programs, including multirole aircraft, transporters and MBTs.
Budget cuts impacted the country’s imports industry:
Colzmbia’s total expenditure on imports declined at a CAGR of 63.4%, from US$207.0 million in 2012 to US$29 million in 2016. The decline is primarily due to defense budget cuts on the back of economic deceleration and a peace accord between the government and FARC. During 2012-2015, imports grew briskly as a result of a continued increase in the import of military aircraft. Colombia also imports ships, sensors, missiles and engines.
Strong influence of anti-state elements within the military:
The Colombian MoD recently acknowledged that cocaine smugglers and leftist rebels had infiltrated senior levels of the Colombian Army, impeding efforts to defeat guerrilla organizations and combat the drug trade. The army discovered classified military information in the computer files of guerrillas from the FARC rebel group, which led the MoD to believe that senior military officials may be sharing information in exchange for bribes.
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