future of the vietnamese defense industry market ...1. market attractiveness and emerging...

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Future of the Vietnamese Defense Industry

– Market Attractiveness, Competitive

Landscape and Forecasts to 2019

Future of the Vietnamese Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2019

2

Summary

“Future of the Vietnamese Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts

to 2019” report offers the reader detailed analysis of the defense budget over the next five years. Alongside

it offers insights into the market opportunities and entry strategies adopted by foreign OEMs (original

equipment manufacturers) to gain a market share in the Vietnamese defense industry.

The report provides detailed analysis of the current industry size and growth expectations during 2015-2019,

including highlights of the key growth stimulators. It also benchmarks the industry against key global markets

and provides detailed understanding of emerging opportunities in specific areas.

Key Findings

In 2014, the Vietnamese government allocated US$XX billion towards military expenditure, of which XX% is

earmarked for the procurement of defense equipment. The country’s defense expenditure is expected to

reach US$XX billion by 2019 from US$XX billion in 2015, increasing at a CAGR of XX%. The growing

strength of the Chinese Navy and its assertiveness with regards to territorial claims in the South China Sea

has propelled the Vietnamese government to enhance its military capabilities. In addition, the country is in

the process of dissipating its incapability of countering modern threats with its existing obsolete equipment

and embarked on military modernization plans during 2010-2014. These modernization plans are expected

to pickup pace over the forecast period and drive Vietnam’s defense expenditure. In the coming years,

demand for defense equipment is mainly expected to revolve around fighter and multi-role aircraft, naval

vessels, patrol ships, submarines, and surveillance equipment.

Key Features and Benefits

The report provides detailed analysis of the Vietnamese defense industry during 2010–2019, including the

factors that influence the military expenditure. It provides detailed expectations of growth rates and projected

total expenditure.

It provides the manufacturers with insights on market opportunities along with industry structure and

dynamics prevalent in the country. In addition, the report focuses on the regulations governing the

Vietnamese defense industry and the potential market entry strategies with an expert analysis of the

competitive structure.


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1. Market Attractiveness and Emerging Opportunities

1.1. Defense Market Size Historical and Forecast

1.1.1. Defense expenditure is projected to grow at a CAGR of XX% during the forecast period

In 2014, the Vietnamese government allocated US$XX billion towards its defense budget, recording an XX%

increase year-on-year. The country’s military expenditure registered a CAGR of XX% between 2010 and

2014, and is expected to grow at an estimated CAGR of XX% over the forecast period. The defense

expenditure expected to reach US$XX billion by 2019 from US$XX billion in 2015. This consistent increase is

primarily driven by the need to modernize military equipment and by strained relations with China.

Consequently, the Vietnamese Ministry of National Defense (MND) is expected to procure a significant

amount of military equipment during the forecast period.

The following table and figure show the Vietnamese defense expenditure during the review period:

Table 1: Vietnamese Defense Expenditure, 2010-2014

Year Defense expenditure (US$ bn)

Defense growth percentage

2010

2011

2012

2013

2014

CAGR 2010-2014

Source: Ministry of Defense and SDI analysis © SDI

Figure 1: Vietnamese Defense Expenditure, 2010-2014


0%

5%

10%

15%

20%

25%

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

2010 2011 2012 2013 2014

Defe

nse e

xp

en

dit

ure

gro

wth

rate

(%

)

Defe

nse b

ud

get

(US

$ B

illi

on

)

Defense Expenditure (US$ bn) Defense Growth Percentage


4

The following table and figure show projected defense expenditure of the Vietnamese over the forecast period:

Table 2: Vietnamese Defense Expenditure, 2015-2019

Year Defense expenditure (US$ bn)

Defense growth percentage

2015

2016

2017

2018

2019

CAGR 2015-2019


Figure 2: Vietnamese Defense Expenditure, 2015-2019


10.0%

10.2%

10.4%

10.6%

10.8%

11.0%

11.2%

11.4%

11.6%

11.8%

12.0%

0

1

2

3

4

5

6

7

2015 2016 2017 2018 2019

Defe

nse e

xp

en

dit

ure

gro

wth

rate

(%

)

Defe

nse b

ud

get

(US

$ B

illi

on

)

Defence Expenditure (US$ bn) Defense expenditure growth %


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1.2. Analysis of Defense Budget Allocation

1.2.1. Share of capital expenditure in the overall defense budget is expected to increase

Between 2010 and 2014, Vietnam allocated an average of XX% of its defense budget for capital expenditure

and the remaining for revenue expenditure. The share of capital expenditure in the overall defense budget is

predicted to increase to an average of XX% over the forecast period, predominantly due to Vietnam’s

planned military modernization initiative and procurement programs. The purchase deals for Kilo class

submarines, Su-30 aircraft, Gepard class frigates, maritime patrol aircraft, and surveillance equipment are

expected to trigger the capital expenditure of the country.

The following table and chart display Vietnamese’s defense budget share of capital, revenue and other

expenditure during the review period:

Table 3: Vietnamese Defense Budget Split Between Capital and Revenue Expenditure (%), 2010–2014

Year Capital Expenditure Share Revenue Expenditure Share

2010

2011

2012

2013

2014

Source: Ministry of Finance, Vietnam and SDI analysis © SDI

Figure 3: Vietnamese Defense Budget Split Between Capital and Revenue Expenditure (%), 2010-2014


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2010 2011 2012 2013 2014

Defe

nse B

ud

get

Sh

are

(%

)

Capital Expenditure Revenue Expenditure


6

The following table and chart display Vietnamese’s defense budget share of capital, revenue and other

expenditure over the forecast period:

Table 4: Vietnamese Defense Budget Split Between Capital and Revenue Expenditure (%), 2015–2019

Year Capital Expenditure Share Revenue Expenditure Share

2015

2016

2017

2018

2019


Figure 4: Vietnamese Defense Budget Split Between Capital, Revenue and Other Expenditure (%),

2015-2019


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2015 2016 2017 2018 2019

Defe

nse B

ud

get

Sh

are

(%

)

Capital Expenditure Revenue Expenditure


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1.3. Homeland Security Market Size and Forecast

1.3.1. Homeland security expenditure is expected to be US$XX billion by 2019

Vietnamese homeland security expenditure registered a CAGR of XX% between 2010 and 2014 to reach

US$XX billion in 2014 from US$XX billion in 2010. Over the forecast period, the country’s homeland security

expenditure is expected to grow at a CAGR of XX% to reach an estimated US$XX billion in 2019. As Vietnam

shares borders with several other countries, and enjoys a strategic location near maritime trade routes, the

chances of illicit drug trafficking and smuggling are heightened. Over the forecast period, homeland security

equipment manufacturers expect an increase in the demand for equipment capable of enhancing seaport and

airport security. Moreover, the country is expected to invest in border surveillance equipment such as CCTV

technology and scanners. An increase in the demand for equipment for the protection of critical infrastructure,

borders, and maritime security is also expected.

The table and chart below show Vietnamese’s homeland security expenditure during the review period:

Table 5: Vietnamese Homeland Security Expenditure (US$ billion), 2010-2014

Year Homeland expenditure (US$ billion)

% Growth

2010

2011

2012

2013

2014


Figure 5: Vietnamese Homeland Security Expenditure (US$ billion), 2010-2014


-10%

-5%

0%

5%

10%

15%

20%

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

2010 2011 2012 2013 2014

Gro

wth

rate

(%

)

Ho

mela

nd

Secu

rity

Exp

en

dit

ure

(U

S$ B

n)

Homeland Security Defense Expenditure (US$ Bn) Growth Rate (%)


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2. Industry Dynamics - Porter’s Five Forces Analysis

Figure 4: Industry Dynamics – Porter’s Five Forces Analysis

Source: SDI analysis © SDI

Intensity of Rivalry Bargaining Power of Supplier

Bargaining Power of Buyer

Barrier to Entry

Threat of Substitute


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Report Methodology

SDI’s dedicated research and analysis teams consist of experienced professionals with a background in

industry research and consulting in the defense sector. The following research methodology is followed for all

databases and reports:

Secondary Research

The research process begins with exhaustive secondary research to source reliable qualitative and

quantitative information related to the defense market. The secondary research sources that are typically

referred to include, but are not limited to:

Industry associations

National government documents and statistical databases

Company websites, annual reports, financial reports, broker reports, investor presentations

Industry trade journals and other literature

Internal and external proprietary databases

News articles, press releases, and webcasts specific to the companies operating in the market

Primary Research

SDI conducts hundreds of primary interviews a year with industry participants and commentators in order to

validate its data and analysis. A typical research interview fulfills the following functions:

Provides first-hand information on market size, market trends, growth trends, competitive landscape,

and future outlook

Helps to validate and strengthen secondary research findings

Further develops the analysis team’s expertise and market understanding

Primary research involves e-mail interactions, telephone interviews, and face-to-face interviews for

each market category, division, and sub-division across geographies

The participants who typically take part in such a process include, but are not limited to:

Industry participants: CEOs, VPs, business development managers, market intelligence managers,

and national sales managers

External experts: investment bankers, valuation experts, research analysts, and key opinion leaders

specializing in defense markets

Conventions

Currency conversions are performed on the basis of average annual conversion rate format

calculations

All the values in tables, with the exception of compounded annual growth rate (CAGR) and

compounded annual rate of change (CARC), are displayed to one decimal place; therefore, due to

this rounding method, growth rates may appear inconsistent with absolute values

The forecasted values are projected on the basis of nominal values; the inflation was not taken into account


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TABLE OF CONTENTS

1. Introduction ........................................................................................................................... 9

1.1. What is this Report About? ........................................................................................................... 9

1.2. Definitions ...................................................................................................................................... 9

1.3. Summary Methodology .................................................................................................................11

1.4. SDI Terrorism Index ......................................................................................................................12

1.5. About Strategic Defence Intelligence ..........................................................................................12

2. Executive Summary ............................................................................................................ 13

3. Market Attractiveness and Emerging Opportunities ........................................................ 15

3.1. Defense Market Size Historical and Forecast..............................................................................16

3.1.1. Defense expenditure is projected to grow at a CAGR of XX% during the forecast period ...................... 16

3.1.2. Strained relationship with China and military modernization are expected to be the prime drivers of

Vietnamese military expenditure ........................................................................................................................... 20

3.1.3. Defense expenditure as a percentage of GDP is expected to hover around XX% over the forecast

period .................................................................................................................................................................. 21

3.2. Analysis of Defense Budget Allocation .......................................................................................23

3.2.1. Share of capital expenditure in the overall defense budget is expected to increase ............................... 23

3.2.2. Vietnam’s capital expenditure is expected to grow at a CAGR of XX% over the forecast period ............ 25

3.2.3. Per capita defense expenditure to be US$XX by 2019 ............................................................................ 29

3.3. Homeland Security Market Size and Forecast ............................................................................31

3.3.1. Homeland security expenditure is expected to be US$XX billion by 2019 ............................................... 31

3.3.2. The main drivers of homeland security expenditure are human trafficking and illicit drugs trade............ 35

3.3.3. Vietnam faces a minimal threat from foreign terrorist organizations ........................................................ 36

3.4. Benchmarking with Key Global Markets .....................................................................................38

3.4.1. Vietnamese defense expenditure expected to remain low compared to leading spenders ..................... 38

3.4.2. The country has a defense expenditure that is low compared to Asian countries ................................... 40

3.4.3. Vietnam’s defense expenditure as a percentage of GDP is higher than leading Asian defense

spenders ............................................................................................................................................................... 41

3.4.4. Vietnam faces negligible threat from foreign terrorist organizations ........................................................ 42

3.5. Market Opportunities: Key Trends and Growth Stimulators ......................................................44

3.5.1. Corvettes .................................................................................................................................................. 44

3.5.2. SSK-Diesel Electric Submarine ................................................................................................................ 45

3.5.3. Fighters & Multi-Role Aircraft .................................................................................................................... 46

4. Defense Procurement Market Dynamics ........................................................................... 47

4.1. Import Market Dynamics ...............................................................................................................48


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4.1.1. Limited domestic defense capabilities drives the country’s defense imports ........................................... 48

4.1.2. Defense imports are expected to increase over the forecast period ........................................................ 49

4.1.3. Russia stands as a significant defense trade partner of Vietnam ............................................................ 50

4.1.4. Aircraft and ships account for the majority of defense imports between 2009 and 2013 ......................... 51

4.2. Export Market Dynamics ..............................................................................................................52

4.2.1. The country has been unable to access the global defense market ........................................................ 52

5. Industry Dynamics .............................................................................................................. 53

5.1. Five Forces Analysis.....................................................................................................................53

5.1.1. Bargaining power of supplier: medium ..................................................................................................... 54

5.1.2. Bargaining power of buyer: low ................................................................................................................ 54

5.1.3. Barrier to entry: medium ........................................................................................................................... 54

5.1.4. Intensity of rivalry: low .............................................................................................................................. 54

5.1.5. Threat of substitution: low to medium ....................................................................................................... 54

6. Market Entry Strategy ......................................................................................................... 55

6.1. Market Regulation .........................................................................................................................55

6.1.1. Vietnamese government unveils new procurement rules ......................................................................... 55

6.1.2. Vietnam has not disclosed any offset obligation ...................................................................................... 55

6.2. Market Entry Route .......................................................................................................................55

6.2.1. Foreign equipment manufacturers can enter the market through direct commercial sales ..................... 55

6.2.2. Government to government deals are an attractive entry route to the country’s defense market ........... 55

6.3. Key Challenges .............................................................................................................................56

6.3.1. Lack of private participants and foreign direct investment may restrict domestic defense industry

growth 56

6.3.2. Lack of transparency and corruption impedes the growth of Vietnam’s defense industry ....................... 56

7. Competitive Landscape and Strategic Insights ................................................................ 57

7.1. Competitive Landscape Overview ...............................................................................................57

7.2. Key Companies .............................................................................................................................57

7.2.1. Vietnam Shipbuilding Industry Corporation (VINASHIN): overview ......................................................... 57

7.2.2. Vietnam Shipbuilding Industry Corporation (VINASHIN): products .......................................................... 57

7.2.3. Vietnam Shipbuilding Industry Corporation (VINASHIN): recent announcements and strategic

initiatives ............................................................................................................................................................... 58

7.2.4. Vietnam Shipbuilding Industry Corporation (VINASHIN): alliances ......................................................... 58

7.2.5. Vietnam Shipbuilding Industry Corporation (VINASHIN): recent contract awards ................................... 58

7.2.6. Sukhoi: overview ....................................................................................................................................... 59

7.2.7. Sukhoi: products ....................................................................................................................................... 59

7.2.8. Sukhoi: recent contract awards ................................................................................................................ 59

7.2.9. Admiralty Shipyards: overview ................................................................................................................. 60


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7.2.10. Admiralty Shipyards: products .................................................................................................................. 60

7.2.11. Admiralty Shipyards: recent contract awards ........................................................................................... 60

7.2.12. Damen Schelde Naval Shipbuilding: overview ......................................................................................... 61

7.2.13. Damen Schelde Naval Shipbuilding: products ......................................................................................... 61

7.2.14. Damen Schelde Naval Shipbuilding: recent contract awards................................................................... 61

8. Business Environment and Country Risk ......................................................................... 62

8.1. Demographics & Social Statistics ................................................................................................62

8.1.1. Population – Rural .................................................................................................................................... 62

8.1.2. Population - Urban .................................................................................................................................... 63

8.1.3. Population – Number of Households ........................................................................................................ 64

8.2. Economic Performance ................................................................................................................65

8.2.1. Gross Domestic per Capita....................................................................................................................... 65

8.2.2. Gross Domestic Product, current US$ ..................................................................................................... 66

8.2.3. Exports of Goods and Services ................................................................................................................ 67

8.2.4. Imports of Goods and Services ................................................................................................................ 68

8.2.5. Manufacturing Output ............................................................................................................................... 69

8.2.6. Consumer Price Index .............................................................................................................................. 70

8.2.7. Local Currency Unit per US$ .................................................................................................................... 71

8.2.8. Local Currency Unit per EUR ................................................................................................................... 72

8.2.9. Lending Rate (%) ...................................................................................................................................... 73

8.2.10. Deposit Rate (%) ...................................................................................................................................... 74

8.2.11. Real Interest Rate (%) .............................................................................................................................. 75

8.2.12. Goods Exports as a percentage of GDP .................................................................................................. 76

8.2.13. Goods Imports as a percentage of GDP .................................................................................................. 77

8.2.14. Goods Trade Surplus/Deficit as a percentage of GDP ............................................................................. 78

8.2.15. Services Imports as a percentage of GDP ............................................................................................... 79

8.2.16. Services Exports as a percentage of GDP ............................................................................................... 80

8.2.17. Services trade surplus/deficit as a percentage of GDP ............................................................................ 81

8.2.18. Net Foreign Direct Investment .................................................................................................................. 82

8.2.19. Net FDI as a percentage of GDP .............................................................................................................. 83

8.2.20. International reserves, including Gold ...................................................................................................... 84

8.3. Energy and Utilities .......................................................................................................................85

8.3.1. Total Conventional Thermal Electricity Net Generation ........................................................................... 85

8.3.2. Hydroelectricity Net Generation ................................................................................................................ 86

8.3.3. Nuclear Electricity Net Generation ........................................................................................................... 87

8.3.4. Total Conventional Thermal Electricity Installed Capacity ....................................................................... 88

8.3.5. Total Electricity Imports ............................................................................................................................ 89

8.3.6. Proved Reserves of Natural Gas (Trillion Cubic Feet) ............................................................................. 90


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8.3.7. Total Petroleum Consumption .................................................................................................................. 91

8.3.8. Crude Oil Proved Reserves (Billion Barrels) ............................................................................................ 92

8.4. Infrastructure Quality and Availability .........................................................................................93

8.4.1. Rail lines, total network ............................................................................................................................. 93

8.4.2. Air Transport, freight (million ton-km) ....................................................................................................... 94

8.4.3. Overall Construction (US$ billion) ............................................................................................................ 95

8.5. Minerals .........................................................................................................................................96

8.5.1. Mining, Manufacturing, Utilities Output ..................................................................................................... 96

8.6. Telecommunication ......................................................................................................................97

8.6.1. Telephone lines ........................................................................................................................................ 97

8.6.2. Telephone lines Penetration Rate ............................................................................................................ 98

9. Appendix .............................................................................................................................. 99

9.1. About SDI .......................................................................................................................................99

9.2. Disclaimer ......................................................................................................................................99


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LIST OF FIGURES

Figure 1: Vietnamese Defense Expenditure, 2010–2014 .................................................................................................................................... 16 Figure 2: Vietnamese Defense Expenditure, 2015–2019 .................................................................................................................................... 17 Figure 3: Vietnamese Defense Expenditure (in VND Billion), 2010–2014 ........................................................................................................... 18 Figure 4: Vietnamese Defense Expenditure (in VND Billion), 2015–2019 ........................................................................................................... 19 Figure 5: Vietnamese GDP Growth vs. Defense Expenditure Growth and Defense Expenditure ........................................................................ 21 Figure 6: Vietnamese GDP Growth vs. Defense Expenditure Growth and Defense Expenditure ........................................................................ 22 Figure 7: Vietnamese Defense Budget Split Between Capital and Revenue Expenditure (%), ............................................................................ 23 Figure 8: Vietnamese Defense Budget Split Between Capital and Revenue Expenditure (%), ............................................................................ 24 Figure 9: Vietnamese Capital Budget Allocation (US$ billion), 2010–2014 .......................................................................................................... 25 Figure 10: Vietnamese Capital Budget Allocation (US$ billion), 2015–2019 ........................................................................................................ 26 Figure 11: Vietnamese Capital Expenditure (in VND Billion), 2010–2014 ............................................................................................................ 27 Figure 12: Vietnamese Capital Expenditure (in VND Billion), 2015–2019 ............................................................................................................ 28 Figure 13: Vietnamese per capita defense expenditure (US$), 2010–2014 ......................................................................................................... 29 Figure 14: Vietnamese per capita defense expenditure (US$), 2015–2019 ......................................................................................................... 30 Figure 15: Vietnamese Homeland Security Budget (US$ billion), 2010–2014 ..................................................................................................... 31 Figure 16: Vietnamese Homeland Security Budget (US$ billion), 2015–2019 ..................................................................................................... 32 Figure 17: Vietnamese Homeland Security Budget (VND Billion), 2010–2014 .................................................................................................... 33 Figure 18: Vietnamese Homeland Security Budget (VND Billion), 2015–2019 .................................................................................................... 34 Figure 19: SDI Terrorism Heat Map, 2014 .......................................................................................................................................................... 36 Figure 20: SDI Terrorism Index, 2014 ................................................................................................................................................................. 37 Figure 21: Benchmarking with Key Markets – 2010–2014 vs. 2015–2019 .......................................................................................................... 39 Figure 22: Defense Expenditure of the World’s Largest Military Spenders (US$ Billion),..................................................................................... 40 Figure 23: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2014 ..................................................................... 41 Figure 24: Corvettes Market Size (US$ Million), 2014 - 2024 .............................................................................................................................. 44 Figure 25: SSK-diesel electric submarine Market Size (US$ Million), 2014 - 2024 .............................................................................................. 45 Figure 26: Fighters & Multi-Role Aircraft Market Size (US$ Million), 2014– 2024 ................................................................................................ 46 Figure 27: Vietnamese Defense Import Trend, 2009–2013(TIV values) .............................................................................................................. 49 Figure 28: Vietnamese Defense Imports by Country (%), 2009–2013 ................................................................................................................. 50 Figure 29: Vietnamese Defense Imports by Category (%),2009–2013 ................................................................................................................ 51 Figure 30: Industry Dynamics Porter’s Five Forces Analysis ............................................................................................................................... 53 Figure 31: Vietnam’s Population – Rural (In Millions), 2010–2019 ...................................................................................................................... 62 Figure 32: Vietnam’s Population – Urban (In Millions), 2010–2019 ..................................................................................................................... 63 Figure 33: Vietnam’s Population – Number of Households (In Millions), 2009–2018 ........................................................................................... 64 Figure 34: Vietnam’s GDP per capita, 2008–2017 .............................................................................................................................................. 65 Figure 35: Vietnam’s Gross Domestic Product (current US$ Billion), 2010–2019 ................................................................................................ 66 Figure 36: Vietnam’s Exports of goods and services (current US$ Billion), 2002–2011 ....................................................................................... 67 Figure 37: Vietnam’s Imports of goods and services (current US$ Billion), 2002–2011 ....................................................................................... 68 Figure 38: Vietnam’s Manufacturing Output (US$ Billion), 2002–2011 ................................................................................................................ 69 Figure 39: Vietnam’s Consumer Price Index, 2009–2018 ................................................................................................................................... 70 Figure 40: Vietnam’s LCU per US$, 2009–2018 ................................................................................................................................................. 71 Figure 41: Vietnam’s LCU per EUR, 2009–2018 ................................................................................................................................................. 72 Figure 42: Vietnam’s Lending Rate (%), 2003–2012 ........................................................................................................................................... 73 Figure 43: Vietnam’s Deposit Rate (%), 2003–2012 ........................................................................................................................................... 74 Figure 44: Vietnam’s Real Interest Rate (%), 2003–2012 ................................................................................................................................... 75 Figure 45: Vietnam’s Goods Exports as a percentage of GDP, 2002–2011 ........................................................................................................ 76 Figure 46: Vietnam’s Goods Imports as a percentage of GDP, 2002–2011 ........................................................................................................ 77 Figure 47: Vietnam’s Goods Trade Surplus/Deficit as a percentage of GDP, 2002–2011 ................................................................................... 78 Figure 48: Vietnam’s Services Imports as a percentage of GDP, 2002–2011 ..................................................................................................... 79 Figure 49: Vietnam’s Services Exports as a percentage of GDP, 2002–2011 ..................................................................................................... 80 Figure 50: Vietnam’s Services trade surplus/deficit as a percentage of GDP, 2002–2011 ................................................................................... 81 Figure 51: Vietnam’s Net Foreign Direct Investment (current US$ Billion), 2002–2011 ....................................................................................... 82 Figure 52: Vietnam’s Net FDI as a percentage of GDP, 2002–2011 ................................................................................................................... 83 Figure 53: Vietnam’s International reserves, including Gold (US$ Billion), 2002–2011 ........................................................................................ 84 Figure 54: Vietnam’s Total Conventional Thermal Electricity Net Generation (Billion Kilowatt Hours),2002–2011 ............................................... 85 Figure 55: Vietnam’s Hydroelectricity Net Generation (Billion KWH), 2002–2011 ............................................................................................... 86 Figure 56: Vietnam’s Nuclear Electricity Net Generation (Billion Kilowatt Hours), 2001–2010 ............................................................................. 87


15

Figure 57: Vietnam’s Total Conventional Thermal Electricity Installed Capacity (Million ...................................................................................... 88 Figure 58: Vietnam’s Total Electricity Imports (Billion Kilowatt Hours), 2005–2010 ............................................................................................. 89 Figure 59: Vietnam’s Proved Reserves of Natural Gas (Trillion Cubic Feet), 2004–2013 .................................................................................... 90 Figure 60: Vietnam’s Total Petroleum Consumption (Thousand Barrels per Day), 2003–2012 ........................................................................... 91 Figure 61: Vietnam’s Crude Oil Proved Reserves (Billion Barrels), 2004–2013 ................................................................................................... 92 Figure 62: Vietnam’s Rail lines (total route-Km), 2002–2011 .............................................................................................................................. 93 Figure 63: Vietnam’s Air Transport, freight (million ton-km), 2002–2011 ............................................................................................................. 94 Figure 64: Vietnam’s Overall Construction (US$ Billion), 2007–2016 .................................................................................................................. 95 Figure 65: Vietnam’s Mining, Manufacturing, Utilities Output(US$ Billion), 2002–2011 ....................................................................................... 96 Figure 66: Vietnam’s Telephone lines, 2003–2012 ............................................................................................................................................. 97 Figure 67: Vietnam’s Telephone lines Penetration Rate (per 100 people), 2003–2012 ....................................................................................... 98


16

LIST OF TABLES

Table 1: Vietnamese Defense Expenditure, 2010–2014 ..................................................................................................................................... 16 Table 2: Vietnamese Defense Expenditure, 2015–2019 ..................................................................................................................................... 17 Table 3: Vietnamese Defense Expenditure (in VND Billion), 2010–2014............................................................................................................. 18 Table 4: Vietnamese Defense Expenditure (in VND Billion), 2015–2019............................................................................................................. 19 Table 5: Vietnamese GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as ..................................................................... 21 Table 6: Vietnamese GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as ..................................................................... 22 Table 7: Vietnamese Defense Budget Split Between Capital and Revenue Expenditure (%), ............................................................................. 23 Table 8: Vietnamese Defense Budget Split Between Capital and Revenue Expenditure (%), ............................................................................. 24 Table 9: Vietnamese Capital Budget Allocation (US$ billion), 2010–2014 ........................................................................................................... 25 Table 10: Vietnamese Capital Budget Allocation (US$ billion), 2015–2019 ......................................................................................................... 26 Table 11: Vietnamese Capital Expenditure (in VND Billion), 2010–2014 ............................................................................................................. 27 Table 12: Vietnamese Capital Expenditure (in VND Billion), 2015–2019 ............................................................................................................. 28 Table 13: Vietnamese per capita defense expenditure (US$), 2010–2014 .......................................................................................................... 29 Table 14: Vietnamese per capita defense expenditure (US$), 2015–2019 .......................................................................................................... 30 Table 15: Vietnamese Homeland Security Budget (US$ billion), 2010–2014 ...................................................................................................... 31 Table 16: Vietnamese Homeland Security Budget (US$ billion), 2010–2014 ...................................................................................................... 32 Table 17: Vietnamese Homeland Security Budget (VND Billion), 2010–2014 ..................................................................................................... 33 Table 18: Vietnamese Homeland Security Budget (VND Billion), 2015–2019 ..................................................................................................... 34 Table 19: Benchmarking with Key Markets – 2010–2014 vs. 2015–2019............................................................................................................ 38 Table 20: SDI Terrorism Index ............................................................................................................................................................................ 42 Table 21: Vietnam Shipbuilding Industry Corporation (VINASHIN) – Product Focus ........................................................................................... 57 Table 22: Vietnam Shipbuilding Industry Corporation (VINASHIN) – Alliances .................................................................................................... 58 Table 23: Vietnam Shipbuilding Industry Corporation (VINASHIN) - Recent Contract Wins ................................................................................ 58 Table 24:Sukhoi – Product Focus ....................................................................................................................................................................... 59 Table 25: Sukhoi - Recent Contract Wins ........................................................................................................................................................... 59 Table 26:Admiralty Shipyards – Product Focus .................................................................................................................................................. 60 Table 27: Admiralty Shipyards - Recent Contract Wins ....................................................................................................................................... 60 Table 28: Damen Schelde Naval Shipbuilding – Product Focus .......................................................................................................................... 61 Table 29: Damen Schelde Naval Shipbuilding - Recent Contract Wins ............................................................................................................... 61

future of the vietnamese defense industry market ...1. market attractiveness and emerging...

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