Saturday, February 11, 2012

Singapore's Defence Budget for Financial Year 2012/13

One of the biggest highlights for defence professionals arriving this weekend for the Singapore Airshow will take place far from the show venue in Changi.

The reading of Singapore's Budget Statement this coming Friday (17 Feb 2012) will be keenly watched by the city state's friends and frenemies.

From an information management standpoint, timing is perfect. Releasing the Budget Statement when key defence professionals from around the world are still in town ensures defence watchers will be better appraised on the value, focus and national priorities for Singapore in the 2012/13 financial year. This kicks off from 1 April.

Defence hacks bombed out by five days of intensive coverage at the airshow (Monday's press preview plus four Trade Days) will have a ready-made story on the Lion City's defence posture just by looking at the Defence budget figure. As news flows tend to dry up on the last Trade Day of the Sing Airshow, having this big story delivered on their plate helps scribes justify their presence in sunny Singapore when most of Europe is locked in the big freeze.

Underlining commitment to defence
Armed with this information, word of Singapore's commitment to its national defence will spread far and wide as Singapore Airshow delegates pack up and head for home. The value of such awareness, whispered in the corridors of Kementah in Kuala Lumpur, the Pentagon, MODUK and elsewhere will do much to sell the message that Singapore is serious about protecting its national interests.  

So come Friday, it's a safe bet that many plasma TV sets in the swanky chalets that ring the airshow will be tuned to the "live" broadcast of Singaporean Deputy Prime Minister and Minister for Finance, Tharman Shanmugaratnam, unveiling the Singaporean government's proposed fiscal priorities and allocations.

For the Singapore Airshow crowd, one highly anticipated budget item is the value of the Defence budget.

For regular visitors to this blog, no surprises are likely when it comes to defence spending. Indeed, it would be news to us if the Singaporean Ministry of Defence (MINDEF) had its budget clipped from the S$12.08 billion budgeted for national defence in FY 2011/12. The figure for FY 2010/11 amounted to some S$11.46 billion

Singapore Airshow delegates from overseas bemoaning the strength of the Singapore dollar vis-a-vis their home currencies will realise the sum for MINDEF/SAF is a hefty commitment by this tiny nation.

Defence spending is likely to claim the lion's share of national spending (30% of the national budget) because Singapore has made it abundantly clear a feast or famine approach to defence spending is not the way to guarantee the island's security.

Instead, the mission of the Ministry of Defence (MINDEF) and Singapore Armed Forces (SAF) is realised by financial contributions capped at 6% of Singapore's Gross Domestic Product (GDP). As the city state's GDP crept past S$300 billion in 2010, table napkin calculations show that MINDEF and the SAF are working well within the budget cap. 

If anything, there is ample room for growth.

Reference customer
Makers of war machines and other defence equipment are likely to keep their ears tuned to that magic Defence budget figure in the hope of enjoying spinoffs as MINDEF/SAF renews its arsenal.

Singapore's military procurement priorities in coming years - which need not necessarily fall within the scope of the FY 2012/13 work year - include but are not limited to:
- Fast landing craft for the Republic of Singapore Navy (RSN) capable of embarking Leopard 2SG-class main battle tanks
- Renewal of the RSN's maritime patrol aircraft fleet
- A replacement for the Republic of Singapore Air Force (RSAF) C-130 Hercules fleet
- Reappraisal of the size and composition of the RSAF fighter force after the F-5S/T Tiger II fighter jets are stood down
- A medium-lift helicopter to replace Super Puma and Cougars
- A dedicated CSAR bird
- Sensors and hardstandings for an air defence system that can also track and engage tube/rocket artillery ordnance

The SAF is also likely to continue committing combat or combat support forces to selected overseas deployments, provided such commitments can be made within the SAF's defence readiness calendar - already heavily populated with critical force development items that will see the SAF train with one foreign armed forces every week throughout the year.

The world's arms industry will be angling for contracts as the republic's war chest is revealed this Friday.

In addition, Singapore's no-nonsense approach to weapons purchases makes it a valued reference customer.

Defence companies that count the SAF as a customer enjoy bragging rights for having successfully aced an evaluation process known (or notorious, as the case may be) industry-wide for its technical competence, thoroughness in defining specifications, mile-high tender documentation and rigor in field trials.

Having gone through the washing machine, defence companies that come up tops after being made to draft and rewrite documentation that can amount to hundreds of pages can say, hand on heart, that they are better armed to tackle less-rigorous procurement processes in other parts of the globe.

All the guesswork about the level and size of Singapore's commitment to its national defence will be answered when the Budget Statement is tabled. If you've not made a note to self about this announcement, do it now.

You may also like to read:
The best customers. Please click here.

Upcoming commentaries this week:
Hits and misses by the Singapore defence industry
The aerial display: A leading indicator of the RSAF's wish-list?


Anonymous said...

(rubbing hands wit glee)

Anonymous said...

I hope all this marvellous equipment works as intended. Because "we have not done this before" will not be good enough.

Anonymous said...

When will you be writing this?

The aerial display: A leading indicator of the RSAF's wish-list?