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Market |
Defence |
Report Type |
Market Research |
Country |
United States |
Published |
3 February 2010 |
Number of Pages |
97 |
Download |
|
Immediate |
|
Publisher |
Business Monitor International |
The ‘war on terror’ shows little sign of ending in the next five years and there is a danger that US armed forces will become overstretched in human, financial and operational terms if it is extended beyond its current theatres of operations. President Barack Obama has announced the deployment of an extra 30,000 American troops to Afghanistan within the first six months of 2010, which will raise the US presence there to 100,000, which could be unpopular at home. The number of American military fatalities in Afghanistan in 2009 was twice as much as in 2008 – 319 US service personnel were killed in 2009, compared to 155 in 2008. There were 7,000 improvised explosive device (IED) incidents in 2009, compared with 81 in 2003. In all, 953 US troops have died since the war began and 4,434 have been wounded as of January 2010.
Iran, Afghanistan and Pakistan are set to be the main priorities for US foreign policy in 2010. The Iranian missile and nuclear programmes were stepped up in 2009, with the US continuing to put more international pressure on Iran while offering to engage in talks. Yemen is also set to absorb more US counterterrorism resources, including direct military help to overcome the growing threat of al-Qaeda in the country. This follows an attempt on December 25 2009 to bomb an airliner approaching Detroit airport and claims that the explosives found on the suspect, Umar Farouk Abdulmutallab, had been supplied to him in Yemen by al-Qaeda. As a result, we believe that there is a high risk of further US intervention in Yemen as the new frontier in the ‘war on terror’.
The US$663.8bn bill for defence spending signed into law by Obama in December 2009 for FY10 will be aimed mainly at equipping ground troops in Afghanistan. It exceeded the president’s request by about US$825mn. Out of an appropriation of US$101.1bn for Iraq and Afghanistan operations, funds will go to acquiring more than 6,600 M-ATV all-terrain vehicles – a lighter version of the mine resistant ambush protected (MRAP) vehicle, an increasingly vital piece of kit for the Afghan mission. The M-ATV is regarded as an emergency stopgap to partially replace the heavy MRAP vehicles until the lighter, more agile Joint Light Tactical Vehicle (JLTV) is ready in 2015.
US arms sales were predicted to total as much as US$50bn in FY09. Orders have brought some relief to US defence companies, which have been facing up to reductions in their investment projects. The December 2009 budget will save the F-22 Raptor fighter plane, due to an appropriation of US$6.3bn for the US Air Force (USAF). Exports of these advanced systems are vital for business and to maintain skilled employment. Military aircraft sales increased by 8% y-o-y to US$61.7bn in 2009 and military aircraft sales are predicted to rise to US$63.3bn in 2010. A deal for US$1.1bn was sealed in December 2009 to for Raytheon to supply Patriot missile and missile defence systems to Taiwan. Boeing in particular is looking to India as a lucrative market, working towards contracts that could be worth at least US$20bn in the next few years. Saudi Arabia and Iraq continue to be lucrative markets.
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