Future of the Myanmarese Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2023

Table of Contents

1. Introduction 6

1.1. What is this Report About? 6

1.2. Definitions 6

1.3. Summary Methodology 8

1.4. About Strategic Defense Intelligence 9

2. Executive Summary 10

3. Market Attractiveness and Emerging Opportunities 12

3.1. Current Market Scenario 13

3.1.1. Military Fleet Size 13

3.1.2. Procurement Programs 18

3.1.3. The growth in insurgency movements will spur growth in defense spending over the forecast period 19

3.1.4. Limited defense budget restricts procurement volumes and, as a result, market participants 19

3.2. Defense Market Size Historical and Forecast 20

3.2.1. Myanmar defense expenditure is expected to grow at CAGR of

5.36% over 2019-2023 20

3.2.2. Modernization of Myanmar Navy, ongoing insurgencies, and ethnic conflicts expected to drive defense expenditure over the forecast period 22

3.2.3. Myanmar’s defense expenditure as a percentage of GDP expected to decrease marginally over the forecast period 24

3.3. Analysis of Defense Budget Allocation 26

3.3.1. Capital and revenue expenditure’s share are anticipated to remain steady over forecast period 26

3.3.2. Capital expenditure expected to increase at CAGR of

5.90% over the forecast period 28

3.3.3. Per capita defense expenditure set to increase over the forecast period 30

3.3.4. Myanmar faces significant risk from insurgent groups and ethnic conflicts 32

3.3.5. Myanmar falls under the “highly affected” terrorism category 33

3.3.6. Myanmar has a terrorism index score of “5.0” 35

3.4. Benchmarking with Key Global Markets 36

3.4.1. Myanmar’s defense budget expected to grow at a slower rate than its neighbors over the forecast period 36

3.4.2. Myanmar’s defense expenditure is low compared to other Asian countries 38

3.4.3. Myanmar allocates a lower share of its GDP to defense compared to other Asian countries 39

3.5. Market Opportunities: Key Trends and Growth Stimulators 40

3.5.1. Top 10 Defense Market Sectors by Value (US$ Million) – Projections over period 2018-2023 40

4. Defense Procurement Market Dynamics 41

4.1. Import Market Dynamics 42

4.1.1. Defense imports are expected to recover over the forecast period 42

4.1.2. China and Russia emerged as the largest suppliers of arms 43

4.1.3. Armored vehicles and aircraft dominate military hardware imports 44

4.2. Export Market Dynamics 45

4.2.1. Myanmar’s domestic defense manufacturing is still in a nascent stage 45

5. Industry Dynamics 46

5.1. Market Regulation 46

5.1.1. Myanmar currently does not permit investments in its defense industry 46

5.2. Market Entry Route 47

5.2.1. Budget Process 47

5.2.2. Procurement Policy and Process 48

5.2.3. Government-to-government contracts are the preferred market entry route for equipment manufacturers 48

5.2.4. Closer military co-operation provides opportunities to enter the defense market 49

6. Competitive Landscape and Strategic Insights 50

6.1. Competitive Landscape Overview 50

6.2. Key Domestic Company 50

7. Business Environment and Country Risk 51

7.1. Economic Performance 51

7.1.1. GDP Per Capita 51

7.1.2. GDP, Current Prices 52

7.1.3. Gross National Disposable Income (US$ Billion) 53

7.1.4. Local Currency Unit per US Dollar 54

7.1.5. Goods Exports as a Percentage of GDP 55

7.1.6. Goods Imports as a Percentage of GDP 56

7.1.7. Service Imports as a Percentage of GDP 57

7.1.8. Service Exports as a Percentage of GDP 58

7.1.9. Net Foreign Direct Investment (BoP, current US$ Bn) 59

7.1.10. Net Foreign Direct Investment as a Percentage of GDP 60

7.1.11. Mining, Manufacturing, Utilities Output (LCU Billion) 61

8. Appendix 62

8.1. About SDI 62

8.2. Disclaimer 62

List of Tables

Table 1: Myanmar Land Forces Strength 13

Table 2: Myanmar Navy Strength 15

Table 3: Myanmar Air Force Strength 17

Table 4: Myanmar Ongoing Procurement Programs 18

Table 5: Myanmar Future Procurement Programs 18

Table 6: Myanmar Defense Expenditure (MMK Billion & US$ Billion), 2014-2023 20

Table 7: Myanmar GDP Growth vs. Defense Expenditure as a Percentage of GDP, 2014-2023 24

Table 8: Myanmar Defense Budget Split Between Capital and Revenue Expenditure (%), 2014-2023 26

Table 9: Myanmar Defense Capital Expenditure (MMK Billion & US$ Billion), 2014-2023 28

Table 10: Myanmar Per Capita Defense Expenditure (US$), 2014-2023 30

Table 11: Terrorism Index, 2018 33

Table 12: Benchmarking with Key Markets – 2014-2018 vs. 2019-2023 36

Table 13: Top Myanmar’s Defense Market Sectors by Value (US$ Million) – 2018-2023 40

Table 14: State/Region Budget Preparation Process 47

Table 15: Parliament Budget Reviewing Process 48

Table 16: Competitive Landscape of the Myanmar Defense Industry 50

List of Figures

Figure 1: Myanmar Defense Expenditure (MMK Billion), 2014-2023 21

Figure 2: Myanmar Defense Expenditure (US$ Billion), 2014-2023 21

Figure 3: Myanmar GDP Growth vs. Defense Expenditure as Percentage of GDP, 2014-2023 25

Figure 4: Myanmar Budget Split Between Capital and Revenue Expenditure (%), 2014-2023 27

Figure 5: Myanmar Defense Capital Expenditure (MMK Billion), 2014-2023 29

Figure 6: Myanmar Defense Capital Expenditure (US$ Billion), 2014-2023 29

Figure 7: Myanmar Per Capita Expenditure (US$), 2014-2023 31

Figure 8: Terrorism Heat Map, 2018 32

Figure 9: Terrorism Index, 2018 35

Figure 10: Benchmarking with Key Markets – 2014-2018 vs. 2019-2023 37

Figure 11: Defense Expenditure of the World’s Largest Military Spenders (US$ Billion), 2018 and 2023 38

Figure 12: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2018 39

Figure 13: Myanmar Defense Imports (US$ Million), 2013-2017 42

Figure 14: Myanmar Defense Imports by Country (%), 2013-2017 43

Figure 15: Myanmar Defense Imports by Weapon Category (%), 2013-2017 44

Figure 16: Myanmar GDP Per Capita, 2015-2025 51

Figure 17: Myanmar GDP, Current Prices (in US$ Billion), 2015-2025 52

Figure 18: Myanmar Gross National Disposable Income (US$ Billion), 2005-2013 53

Figure 19: Local Currency Unit per US$ – Exchange Rate , 2015-2024 54

Figure 20: Myanmar Goods Exports as a Percentage of GDP, 2005-2013 55

Figure 21: Myanmar Goods Imports as a Percentage of GDP, 2005-2013 56

Figure 22: Myanmar Service Imports as a Percentage of GDP, 2005-2013 57

Figure 23: Myanmar Service Exports as a Percentage of GDP, 2005-2013 58

Figure 24: Myanmar Foreign Direct Investment, Net (current US$ Billion), 2005-2013 59

Figure 25: Myanmar Net Foreign Direct Investment as a Percentage of GDP, 2005-2013 60

Figure 26: Myanmar Mining, Manufacturing, Utilities Output (LCU Billion), 2005-2014 61