Brunei’s annual military expenditure, which is estimated at $331.7 in 2017, is anticipated to reach $389m by 2022, recording a compound annual growth rate (CAGR) of 3.41%, according to a report by Strategic Defence Intelligence (SDI).

Titled ‘Future of Brunei Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2022, the report provides insights into Brunei’s military spending patterns.

The allocation for capital expenditure is projected average 32.5% from 2018 to 2022, whereas revenue expenditure is anticipated to be 67.5% over the forecast period.

The territorial disputes in the South China Sea, modernisation of Royal Brunei Armed Forces (RBAF) and threat of terrorism are the main driving factors of Brunei’s defence spending growth.

“The acquisition of military transport and maritime patrol aircraft, surveillance radars, and airspace surveillance platforms is anticipated to attract most of the investment.”

The acquisition of military transport and maritime patrol aircraft, surveillance radars, and airspace surveillance platforms is anticipated to attract most of the investment.

Brunei sources majority of the defence equipment and systems from foreign suppliers in order to meet its military needs. Germany is a major supplier of arms to Brunei, while the US is the second biggest arms importer followed by France, Denmark, Netherlands and Sweden.

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Brunei’s defence imports are projected to increase over the next five years, which is expected to create abundant opportunities for foreign original equipment manufacturers (OEMs), the report adds.