Tuesday 17 September 2013, Amsterdam
Its strained relationship with Greece, persistent terror threats, and instability in the region will see Turkey’s military expenditure rise at a CAGR of 6.63% between 2014 and 2018, by which time it will reach a value of US$ 21.3 billion, according to this new report: Future of the Turkish Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2018.
KEY DEFENSE DRIVERS
Relationship with Greece
Since the 1070s, Turkey and Greece have been engaged in a dispute over territorial rights in the Aegean Sea, with both countries laying claim to the Aegean continental shelf. The central issues between the two countries are the exploration rights to oil and minerals under the seabed, and air control responsibilities. Furthermore, the two nations are involved in a conflict over the control of Cyprus, and despite recent efforts made on behalf of both countries’ governments to seek a resolution to this ongoing dispute, they remain largely unresolved, and will continue to fuel Turkish defense expenditure to 2018.
Regional Instability
Turkey shares borders with both Iran and Syria, and although the three countries share a peaceful relationship, the increasing defense capabilities of Iran and Syria in missile defense and weapons of mass destruction are perceived by Turkey as a significant security threat. Consequently, Turkey will focus on the enhancement of its missile defense capabilities over the next four years.
Additionally, hostility among Middle Eastern states such as Israel and Iran, combined with turbulence among the newly independent republics of the Caucasus region – such as Georgia, Armenia, and Azerbaijan – threaten to disturb Turkish borders. Turkey will increase defense expenditure over the forecast period in order to safeguard its national security from this multitude of threats.
Kurdish Workers Party (PKK)
The largest threat to Turkey’s national security is the Kurdish insurgency, which has been prevalent in the Southeastern part of the country since 1984. In its efforts to establish an independent state, the Kurdish Workers Party (PKK) has resorted to violence, and in order to combat this threat, the country’s military expenditure is rising. In
addition, the activities of the PKK within Turkey put pressure on the country’s relations with Syria, Iraq and Iran, where the PKK insurgents have maintained arms supply and training bases. In order to prevent terrorist attacks, the country will continue to significantly invest in defense to 2018.
Peacekeeping Missions
Turkey is involved in UN (United Natinos) and NATO (North Atlantic Treaty Organization) peacekeeping missions. At present, the country in participating in nine UN peacekeeping operations with a significant number of military and civilian personnel abroad. Turkey deployed a contingency of 470 personnel, working in different parts of the world as part of UN operations, operating in Lebanon, Haiti, the Democratic Republic of Congo, Darfur, Liberia, South Sudan, Cote d’Ivoire, Afghanistan and Kosovo. Defense expenditure is expected to grow to 2018 as the country focuses on increasing the naval capabilities of troops stationed abroad.
KEY HOMELAND SECURITY DRIVERS
Syrian Conflict
Since Turkey shares a border with Syria, the clashes between both the Turkish and Syrian governments have increased over the past two years. As per UN statistics, more than 100,000 people have been the victim of conflict in Syria. In August 2013, around 3,000 people entered Turkey through the Akcakale border crossing between Turkey and Syria, following the intensification of artillery fire in clashes at Tel Abywad.
Turkey is now investing around US£10.1 billion in building a bullet proof surveillance tower, and will place armored vehicles loaded with thermal cameras, sensors, and radar satellite tracking systems to secure the border with Syria.
Separatists & Extremists
The Kurdish Worker’s Party (PKK) will drive Turkey’s homeland security market in addition to its defense market, with the current peace talks faltering in light of the impact being had by the Syrian Civil War. To prevent attacks, the nation plans to invest in unmanned aerial vehicles (UAV), improvised explosive device (IED) jammers, intelligence and communication systems, and reconnaissance and surveillance satellites.
Illegal Immigration & Drug Trade
Turkey is surrounded on the Black Sea on its Northern coast, which is bordered by Bulgaria, Romania, the Ukraine, and Russia. Due to its strategic location between Europe, the Middle East, and Asia, the nation is prone to maritime security threats such as illegal immigration, and the smuggling of arms and drugs. Turkey has the longest coastline of countries bordering the Black Sea, and consequently securing the region against maritime threats is an important challenge. In order to safeguard its coastline, the nation will invest in under- and above-water surveillance and detection systems for naval bases and ports, coastal surveillance radars, command control systems, and decision support centers.
This report is the result of an extensive research covering the defense industry. It offers in-depth analysis of:
•Market opportunity and attractiveness: detailed analysis of the current industry size, and growth expectations during 2014-2018, including highlights of key growth stimulators. It also benchmarks the industry against key global markets and provides detailed understanding of emerging opportunities in specific areas.
•Procurement dynamics: trend analysis of imports and exports, together with their implications and impact on the South African defense industry.
•Industry structure: five forces analysis of imports and exports, together with their implications and impact on the South African defense industry.
•Market entry strategy: analysis of the possible ways to enter the market, together with detailed descriptions of how existing companies have entered the market, including key contracts, alliances, and strategic initiatives.
•Competitive landscape and strategic insights: analysis of the competitive landscape of the defense industry in South Africa, providing an overview of key defense companies (both domestic and foreign), together with insights such as key alliances, strategic initiatives, and a brief financial analysis.
•Business environment and country risk: a range of drivers at country level, assessing business environment and country risk. It covers historical and forecast values for a range of indicators, evaluating business confidence, economic performance, infrastructure quality and availability, labor force, demographics, and political and social risk.
This will facilitate:
•Clear identification of market opportunities and entry strategies to gain or grow market share in the Preuvian defense industry.
•Proper understanding of the competitive landscape of the defense industry in Turkish, including key domestic and foreign defense companies, key alliances and strategic initiatives.
•A clear understanding of forces operating on the market, and actionable insight on forthcoming developments that will shape the landscape of opportunity in the foreseeable future
