Research and Markets: Czech Republic Defence and Security Report Q1 2011

DUBLIN--(BUSINESS WIRE)--Research and Markets (http://www.researchandmarkets.com/research/128703/czech_republic_def) has announced the addition of the "Czech Republic Defence and Security Report Q1 2011" report to their offering.

“Czech Republic Defence and Security Report Q1 2011”

Business Monitor International's Czech Republic Defence and Security Report provides industry professionals and strategists, corporate analysts, defence and security associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Czech Republic's defence and security industry.

The Czech Republic is a highly stable country, having been one of the most prosperous and secure former communist states, and locked into the EU and NATO for the past several years. Political change in the country has taken place peacefully, and this shows no signs of abatement. The Czech Republic joined the EU in 2004, and has developed strong ties with the United States. It is also on good terms with its neighbours, managing to avoid disputes that have characterised many bilateral relationships in the region. In October 2010, the Czech parliaments upper house voted in favour of a plan to boost the country's troop commitment in Afghanistan over the next two years, as reported by AP.

By an overwhelming 57-5, the Senate agreed to deploy up to 720 servicemen in 2011, and up to 640 in 2012, meaning that in 2011, nearly 200 troops will join the 535-strong Czech contingent in Afghanistan as part of the NATO-led force. According to the defence ministry, the worsening security situation occasioned the increase. The upper house also approved plans to draw down the number of Czech troops from the NATO force in Kosovo incrementally, reducing the troop count from 550 to a mere 15 by 2012 The Ministry of Defence has angled its procurement strategy toward the needs of its forces abroad, a clear sign that it sees international commitments as a pressing priority for the military, arguably above the domestic defence of the country, which is, at present, ultra-secure. In 2010, BMI estimate that defence spending was cut by 15.58% in dollar terms to US$2.485bn, or US$235.90 per head. In constant price terms, there was a reduction of 17%.

This is not necessarily a new phenomenon; while the sharpness of cuts in defence outlay was due to immediate fiscal pressures, there has been a downward trend in expenditure as a proportion of government spending over the past decade, from 5.2% in 2000. is the decline has been mainly due to the increased security brought by the NATO security umbrella, shifting public opinion, and the recognition that defence dynamics are changing, and large-scale investment in heavy equipment and manpower are unlikely to define defence spending in the future.

Defence spending is unlikely to meet the NATO requirement of at least 2% of the countrys GDP in the forecast period. However, BMI expects a significant rise in expenditure in the short term, as the Czech Republic's economy and budget pick up. BMI forecast a rise of 4.15% in defence spending in 2011, taking it to $2.588bn, or $245.30 per person. In constant price terms, spending will rise a more modest 2%. As a proportion of government expenditure, defence spending will rise slightly to 3.0% in 2011 and 3.1% in 2012. Over the medium to long term, the outlook is steady.

In constant price terms, expenditure will rise to 2005 levels in 2017, but in both nominal and constant price terms, it will rise at a low to moderate rate. All in all, the Czech Republic is unlikely to see a long-term boom in spending on its small and pareddown military, but the government will continue to commit funds to it as part of its international commitments.

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