Switzerland - Defense and Security: Growth in expenditure to be driven by modernization programs (Strategy, Performance and Risk Analysis)
Switzerland is the most peaceful nation in Europe, ranking 48th in terms of level of conflict and 53rd in terms of societal safety and security. This is mainly due to the country’s stance of armed neutrality. Switzerland is ranked 50th in terms of its economic impact of violence score, 46th in terms of its business costs of terrorism score, and 48th in terms of its business costs of crime and violence score, due to the country's neutrality. Switzerland allotted only 0.71% of its GDP towards its defense expenditure in 2016, considerably lower than many European countries.
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Increasing revenue and capital expenditure:
Swiss capital expenditure increased at a CAGR of 1.5% over the historic period, from US$1,471.1 million in 2012 to US$1,562.1 million in 2016. This value is expected to increase at a CAGR of 1.8% over 2017-2021 to reach US$1,716.4 million. The increase in expenditure will primarily be due to an increase in the procurement of arms as part of the government’s modernization initiatives. Swiss revenue expenditure increased at a CAGR of 1.3% over the historic period, from US$3,228.9 million in 2012 to US$3,397.1 million in 2016. This is expected to increase further at a CAGR of 1.1% over 2017-2021 to reach US$3,590.8 million, mainly due to an increase in training and construction costs.
Aircraft segment leads in terms of capital expenditure:
Swiss capital expenditure on the aircraft segment was the highest among the other defense segments, registering US$1,418.7 million in 2016. However, expenditure on this segment is expected to witness a CAGR of -8.8% over 2017-2021 to reach US$903.9 million. The decrease in expenditure is attributed to the negative result of the referendum which was undertaken in 2014 in regards to the procurement of 22 Saab Gripens.
Active participation in peacekeeping missions:
Due to Switzerland’s association with the UN, the Organization for Security and Cooperation in Europe (OSCE), and NATO, the country contributes civil and military personnel to peace-keeping operations. The country is involved in the Human Security Network, the Small Arms Survey, economic development through the prevention of armed violence, and the UN resolution on justice in transition processes. Swiss military personnel are currently deployed on crisis management missions in support of the UN Stabilization Mission in the Democratic Republic of the Congo, Liberia, and Sudan.
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