Revised 2016 Budget and Typhoons

SHAH ALAM: Prime Minister Datuk Seri Najib Razak presented a revised 2016 Budget today and it appears that the security sector – defence and national security – allocation for the year remained intact. In-fact, even though Najib said the revised budget will result in RM9 billion savings, other ministries allocation also seemed intact.

As I reported earlier, for 2016, the overall allocation for the security sector was RM31.2 billion. The OE allocation is RM26.9 billion (RM13.457 billion for defence and RM13.447 billion for internal security). The DE expenditure is RM5.196 billion (RM4.295 billion for defence and RM901 million for internal security).

KD Gempita, a Handalan class FAC during operations in early 2016. RMN picture
KD Gempita, a Handalan class FAC during operations in early 2016. RMN picture

According to the Star, the Prime Minister said under the revised budget the government revenue would be based on Brent crude oil at US$30 to US$35 per barrel when compared with the US$48 when it prepared the Budget 2016 last year.

He also said the economy was expected to grow at a slower pace of between 4% and 4.5% when compared with the earlier forecast of 4% to 5%. You can follow the link to look at the main salient points of the budget or read the full speech,here.

A close up of the A400M nose. Note the Thales EVS. Two more A400Ms will be delivered this year.
A close up of the A400M nose. Note the Thales EVS. Two more A400Ms will be delivered this year.

I read the speech and Najib did not touch anything on security sector so I assumed the projects already signed for are safe especially the LCS and the AV8 as had been reported before. Those in the industry also said the same thing though they point out “2017 is a different ball game altogether”.

One point which Najib touched in his speech which may affect the security sector was when he said that to boost the economy, several strategic areas owned by the government will be re-developed through a bidding process.

Of course, there are many strategic areas owned by the government which are not used by the security sector. However many of the strategic areas used by the security sector are in dire need of refurbishment and modernisation. Among them are the Butterworth airbase and the various army camps in Kuala Lumpur and Ipoh.

Two Typhoons powering up at Butterworth airbase in 2011.
Two Typhoons powering up at Butterworth airbase in 2011.

Although Butterworth airbase is already in the eyes of a developer, it is unlikely the project will be given the go ahead due to antagonistic stance taken by the Penang state government over the redevelopment plans. That said things change and only time will tell whether or not Butterworth airbase will survive or not.

Meanwhile, DefenseNews reported that Kuwait is expected to finalise the deal to buy 28 Typhoons on Jan 31. Apparently the Kuwaitis also wanted to buy the Super Hornets but delays for getting approval has made them to look for alternatives. It is likely that the Kuwaiti will still buy 28 Super Hornets when the US government approved the deal.

A CGI image of Typhoon with Kuwaiti Air Force colours. Eurofighter.
A CGI image of Typhoon with Kuwaiti Air Force colours. Eurofighter.

Kuwait had signed an agreement to buy the Typhoon with the Italians last year.

ROME and DUBAI — Kuwait is expected to sign a deal to buy 28 Eurofighter aircraft on Jan. 31, an Italian Ministry of Defense source has told Defense News. “Italian Defense Minister Roberta Pinotti has been invited by Kuwait to attend the signing for 28 Eurofighter aircraft on Sunday in Kuwait,” the source said on Wednesday.
Kuwait has agreed to buy 22 single-seat and six twin-seat Typhoons in a government-to-government agreement. Italian firm Finmeccanica has been handling the industrial side of the sales push.

Industry sources have said the deal, which could be worth up to €8 billion (US $8.7 billion), could see the Kuwaitis become the first export customer for the active electronically scanned array radar being developed for the jet.

The aircraft are expected to be new-build, third tranche, swing-role versions of the fighter, with deliveries starting in 2019 and possibly covering munitions such as the Storm Shadow and Meteor.

What about the MRCA then? Unlikely now or the next 24 months.

— Malaysian Defence

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