Czech Republic Defence & Security Report 2007

The June elections in the Czech Republic resulted in a hung parliament whilst the opposing parties battled to break the stalemate. The stalemate, imposed after neither party won a majority for government, has not been easy to break and has left the Republic without a permanent government for the last five months. Whilst this may be causing some turmoil to the immediate political stability of the Czech Republic, BMI does not believe it will have a lasting negative effect. Indeed, our newly-released Czech Republic Defence & Security Report concludes that the republic's future prospects are looking strong.

This is mirrored in the Czech Republic's security situation, with the Republic ranking highly in BMI's security risk ratings. The Czech Republic faces limited security threats. The Czech lands do not have a history of political violence and the two historic political changes, 'The Velvet Revolution' which ended the Communist era in 1989, and the division of Czechoslovakia into the Czech Republic and Slovakia in 1993, occurred without loss of life or significant violence. The country also enjoys good to excellent relations with all of its neighbours and none of its borders are in dispute. Historically, terrorism has also factored little. However, increasingly it has become at risk, most notably because of the country's support of the US in the 'war on terror' in Afghanistan and operations in Iraq.

The Czech Republic defence industry is well-suited to meet the country's security needs. Its armed forces are currently undergoing reform and modernisation as required by its membership of NATO. Despite a reduction in military expenditure, the drive for interoperability with the multinational organisation has provided both the impetus and the opportunities for the defence industry in terms of research and development and the production of more advanced military hardware. However, the Czech industry is still incapable of manufacturing most advanced conventional weapons systems and requires large procurement deals from overseas.

The Czech Republic is relatively stable and free from significant security threats, but whilst the Czech armed forces have reliable access to the military equipment it requires, the country would do well to invest in its indigenous industry. The Czech defence industry must seek out export markets to survive, however, although new, high technology companies should be able to develop a niche market in which the Republic can specialise.