BMI's Executive Summary

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BMI's newly-released Malaysia Defence & Security Report Q1 2008 provides an assessment of the country's internal and external security situation. Internally the security situation remained stable in Malaysia, with the government maintaining strict control over any dissenting political movements. Malaysia has strict anti-terrorism laws in place, mainly with regards to how information is used in activities related to terrorism. However, these laws also double up as a control for online criticism of the government. In Q407, one of Malaysia's leading online editors answered to reports that his online publications had questioned Islam. The government's use of the anti-terrorism laws to control internal political dissent emphasises that while the government is concerned with curbing terrorism in Malaysia, it is equally concerned with maintaining broad support for the Malaysian government.

Malaysia's well-educated workforce, access to defence technology and relatively low labour costs are the strong points of its defence industry. In Q407 overseas defence firms began to expand their operations in Malaysia, mainly in the missiles and avionics industry. Also during the quarter, India expressed a desire to work more closely with Malaysia in the area of cruise missiles. BrahMos Aerospace put forward the suggestion that the two defence industries should forge closer ties. Malaysia has expressed a desire to purchase missiles but India is not the only producer that Malaysia has been interested in. The willingness to deal with the country is also driven by security reasons, as India is seeking to expand its influence in the region. One method of achieving this is to strengthen ties in the defence platforms market.

Contents

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Chapter 1 - Executive Summary

Chapter 2 - SWOT Analysis

Malaysia Security SWOT

Malaysia Defence Industry SWOT

Malaysia Economic SWOT

Malaysia Political SWOT

Malaysia Business Environment SWOT

Chapter 3 - Political Overview

BMI Core Scenario

External Political Outlook

Chapter 4 - Security Risk Analysis

BMI’s Security Ratings

Table: Malaysia Regional Risk Ratings

State Terrorism Vulnerability Index

Regional Security: South East Asia and Pacific Q406

Overview

Inter-State Conflicts

Internal Conflicts

Malaysia Terrorism Risk Ratings

Malaysia Conflict Risk Ratings

Malaysia Physical Safety Risk Ratings

Chapter 5 - Security Overview

Internal Security Situation

Table: Insurgent Groups

External Security Situation

Territorial Disputes

Insurgent and Terrorist Activity

Piracy

Table: Actual and Attempted Piracy Attacks

Bilateral Relations

Chapter 6 - Defence Industry

Armed Forces

Multilateral and Bilateral Defence Relations

Table: Malaysia Regional Armed Forces

International Deployment

Weapons of Mass Destruction

Chapter 7 - Market Overview

Industry Trends & Developments

Arms Trade Overview

Procurement Trends & Developments

Chapter 8 - Industry Forecast Scenario

Army Enlargements

Table: Malaysia Defence Sector Historical Data & Forecasts

Key Risks to BMI’s Forecast Scenario

Chapter 9 - Macroeconomic Forecast

Moderate Slowdown Ahead

Table: GDP, Population & Output

Chapter 10 - Company Profiles

Deftech

Malaysia Shipyard and Engineering

SME Ordnance

Composite Technology Research Malaysia

Airod

EADS

Chapter 11 - BMI Forecast Modelling

How We Generate Our Industry Forecasts

Defence Industry

Sources

Chapter 12 - Appendix A: Risk Ratings Methodology

Conflict Risk Methodology

Terrorism Risk Methodology

Physical Safety Risk Methodology

Overall Risk Rating

State Vulnerability Index Methodology

Competitive Landscape for Asia Defence & Security: Sample of  
Companies Ranked

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Rankings and Competitive Landscapes by production and sales; market share and change on previous year; number of employees, ownership structure and year established. Also includes analysis of company expansion, export and investment strategies.

Network of Defence & Security Sources

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BMI's Asian Defence & Security Reports are based on an extensive network of multilateral organisations, government departments, automotive industry associations, chambers of commerce and company reports. Information sources include: