By Avascent Analytics team
Defense-Industrial Opportunities in MENA
Governments increasingly view defense industrial policy as a viable lever to channel defense spending towards economic growth, maintaining interoperability with allies, and ensuring surety of supply.
Check out Avascent’s new White Paper on accomplishments in the MENA region, and what steps governments and firms should consider to successfully further the process.
A quick look at the biggest stories of the week.
On February 4, Tunisia received six American-made Bell OH-58D Kiowa Warrior helicopters, the first of a total of 24. In May 2016, the US State Department approved the sale of the aircraft to Tunisia at a total cost of $100.8 million. The helicopters are equipped for both day and night operations, and are intended to reinforce the army’s reconnaissance and attack capabilities. In other US anti-terrorism efforts with Tunisia, on January 16th, the US military delivered two more ships as part of a 2012 agreement for six units. The remaining two will be delivered within a year.
The Royal Australian Navy (RAN) selected the Schiebel Camcopter as part of its long-term integrated tactical UAV development plan on February 6. Initial stages of this plan involved the acquisition of the Insitu ScanEagle, and two more stages will be undertaken with the goal of providing the RAN with a more comprehensive UAV capability. In the current stage, the Camcopter is meant to augment the situational awareness of RAN vessels.
Estonia & Finland
Also on February 6, the Estonian Ministry of Defence decided to join Finland in its plans to procure at least 12 used South Korean K9 Thunder howitzers. The 155mm self-propelled howitzers, produced by South Korea’s Hanwha Techwin, will ultimately replace the FH-70 towed howitzers that are currently being used by the Estonian Army. While the eventual procurement will not be conducted jointly with Finland, the two countries will work closely together on the purchase. Additionally, there is the potential to share supply and logistical support capabilities in the future. The Finnish Defence Forces have been looking to replace their aging Soviet-built cannons with modern howitzers since 2015 and tested the South Korean K9s at the end of last year. It is expected that the first K9s will be delivered to both countries in 2021.
The Greek Ministry of National Defense announced plans on February 7 to upgrade its F-16 fleet in hopes of eventually procuring the F-35. Greece first procured the F-16 back in 1989 and currently has 151 of the aircraft in its inventory. The anticipated costs to upgrade the fleet, likely to the F-16 Viper variant (compatible with the F-35), are between $1.7 to $2 billion. The Greek Ministry of National Defense plans to modernize the F-16 fleet before expressing a formal interest in the F-35. The upgrade will prolong the service life of the fleet, though the timeframe remains unclear.
South Korea & Indonesia
On February 8, South Korea and Indonesia opened a joint program management office southeast of Seoul for the development of the future KF-X/IF-X aircraft, a 4.5-generation fighter with levels of low-observability (stealth) greater than that of current 4.5-generation fighters such as the Typhoon and Rafale, but less than that of fifth-generation fighters like the F-35 and PAK-FA. The two countries signed a $7.1 billion agreement to jointly develop the aircraft, with Korea’s Defense Acquisition Program Administration (DAPA) and Korea and Aerospace Industries leading development, and Indonesia’s PT Dirgantara Indonesia in a 20% partnership. At least 150 aircraft are expected to be produced, with first flights planned for 2022, though Avascent expects this timeline to slip. The KFX project originally called for a stealthy fifth-generation fighter, but cost and technical obstacles led to less ambitious targets for the program, and the current budget will almost certainly be increased as development progresses. Avascent Analytics projects that South Korea and Indonesia will spend a combined $13 billion on procuring the KFX/IFX. Potential for exports to countries hoping to replace aging fleets of fourth-generation fighters like the F-16 could help bring procurement costs down.
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