South Africa Defence and Security Report Q3 2009

Preparations for the 2010 FIFA World Cup football tournament are stimulating increased private investment, which will play an integral part in dampening the negative impact of the global recession on the South African economy. In fact, we believe South Africa will remain one of the few major emerging markets in which gross fixed capital formation will remain in positive territory in 2009. The World Cup event in 2010 is expected to be instrumental in leading to a relatively strong economic recovery by stimulating investment, service export growth and private consumption.

Contracting real export growth and reduced real private consumption will depress economic activity during the coming year. Employment is likely to suffer, prompting several South African labour unions to call on the government to bail out businesses which might otherwise fall into bankruptcy.

South Africa's defence industry has been forced to make significant adjustments by increased foreign competition resulting from the lifting of arms embargos. Although companies have laid-off significant numbers of employees, recent procurement packages may reverse this trend in the long-term.

Nevertheless, it is likely that recent government orders will increase arms imports. Despite some signs that inroads into international export markets are boosting company results, it is imperative that the South African defence industry break into international markets. At present, a lack of funding, policy and research and development (R&D) are hampering the industry.

The significant players remain Denel, the former manufacturing divisions of Armscor, BAE Systems' Land Systems South Africa, African Defence Systems (ADS), Grintek Defence & Technologies, Reutech and the civil and military aviation industry specialist Aerosud.

This quarter, we have introduced a significant new aspect to BMI's Defence Reports, which is the City Terrorism Rating (CTR). This assesses the risk of a terrorist attack. The CTR takes into account the overall BMI Terrorism Rating for the country in question. It also incorporates the 'prevalence' of terrorism, which recognises the frequency of attacks, and whether the city is a target for terrorists. The CTR also recognises the 'threat' of terrorism in terms of the likely numbers of victims and the ability of groups to launch sustained campaigns. In South Africa we assess the CTRs for Cape Town, Johannesburg and Pretoria at 92.5, 87.5 and 85.0, respectively. This places them 6th, 12th and 16th, respectively, among the 40 African cities assessed.

• Executive Summary
• SWOT Analysis
• South Africa Security SWOT
• South Africa Defence Industry SWOT
• South Africa Political SWOT
• South Africa Economic SWOT
• South Africa Business Environment SWOT
• Political Overview
• Security Risk Analysis
• BMI's Security Ratings
  • Table: Middle East And Africa Defence And Security Ratings
  • Table: Middle East And North Africa State Terrorism Vulnerability Index
• South Africa ??