The Columbian Defense Industry Market Opportunities and Entry Strategies, Analyses and Forecasts to 2017

Colombia is expected to spend US$97.5 billion on defense during 2013–2017 to counter both internal and external threats

London, September, 2012 – The total defense expenditure of Colombia, which was estimated at US$10.5 billion in 2008, increased at a CAGR of 8.81% during the review period (2008-2012) to reach US$14.7 billion by 2012. The Colombian police force received an average of 24% of the total defense budget during the review period. Strategic Defence Intelligence estimates that Colombia’s defense expenditure as a percentage of its gross domestic product (GDP) will rise from 3.9% in 2012 to 4.8% in 2017. This translates to a budget increase from US$14.7 billion in 2012 to US$23.4 billion in 2017 (reference graph below).

The Colombian Ministry of Defense acknowledged that cocaine smugglers and leftist rebels had infiltrated the senior levels of the Colombian army, impeding efforts to defeat guerrilla organizations and combat the drug trade. Indeed, the army discovered classified military information in computer files of guerrillas from the FARC rebel group, which led the Ministry of Defense to believe that senior military officials may be sharing information in exchange for bribes. In another incident, Diego Montoya, who is the perceived head of the Norte del Valle cartel and has been accused of exporting hundreds of tons of cocaine to the US, is believed to have recruited army officers to provide him with protection and help his brother, Eugenio Montoya, to escape from a high-security prison.

The total Colombian defense budget was US$11 billion in 2009, of which only US$1.5 billion was allocated for capital expenditure purposes. Currently, domestic defense firms meet the majority of defense requirements in the low technology area, while foreign procurement is undertaken when the adequate sophistication and technology is not available in the domestic market. Many foreign OEMs consider such a low level of defense expenditure as an unfavorable condition in which to enter the Colombian defense industry. Furthermore, the Colombian government does not currently allow foreign investment in its defense industry, which further prevents foreign OEMs from entering the industry.

The volume of Colombian defense imports growth has seen fluctuation over the last five years, except for 2008, when imports declined due to the global economic crisis. Historically, the US and Israel have been the major arms supplying countries to Colombia, which is expected to continue over the forecast period (2013-2017) due to the strong diplomatic relations between these nations. The majority of imports are aircraft, a trend that is expected to continue over the forecast period. Defense-related exports from Colombia are minimal, as the country does not have the sufficient technology or the manufacturing capability required to operate a significant defense export market. The country’s domestic defense industry largely caters to low-technology defense products, such as grenades, machine guns, rifles, aircraft parts, and MRO activities.

About Strategic Defence Intelligence
This report is one of a series available to subscribers of our premium research platform, Strategic Defence Intelligence. Strategic Defence Intelligence provides a stream of continuously updated customer and competitor intelligence, as well as detailed research reports providing an unrivalled source of global information on the latest developments in the defence industry.
Strategic Defence Intelligence's unique monitoring platform tracks global defence activity for over 2,500 companies and 65 product categories in real time and in a highly structured manner, giving a comprehensive and easily-searchable picture of all defence industry activity. The site features: daily updated analysis, comment and news, company and customer profiles, defence spending, tenders and contracts, product and technology intelligence, a research and analysis database providing access to industry and competitor reports to enable business and market planning, and fully customizable tools, including instant personalized report generation and custom alerts.

About GlobalDefence.net
For more than a decade GlobalDefence.net provides information from the field of foreign and security policy. It all started in the year 2001. After 911 the founder and current editor in chief Holger Paletschek started to create a German-speaking website with an overview about the armed forces of the world.
Today GlobalDefence.net stands for current news, background articles, geopolitical analyses, network of experts, industry leaders, political decision makers, as well as information about the armed forces of the world provided in German and English.

Contact:
Mr. Jens Hohmann
GlobalDefence.net
c/o Contados Medien und Verlags KG
Hohefeldstraße 3
34132 Kassel / Germany

advertisement@globaldefence.net
Fon: +49 (0)176 - 322 367 95
Fax: +49 (0)561 - 350 29 32 -19
http://www.globdef-studies.com/

This release was published on openPR.