Singapore Defence and Security Report Q3 2008

Singapore, has one of the largest defence budgets in the Asia Pacific region and its armed forces andsecurity services enjoy a high reputation for efficiency although the armed forces lack battle experience.In 2007, the government announced significant increases in spending, mainly on operating equipment.Overall spending rose 5.3% to SGD10.58bn in 2007. The Singaporean government has thus raisedspending slightly higher than its typical 4.5%-5% of the budget range.

Singapore’s main security threats come from priacy in the crucial Malacca Straits and from regionalterrorism. While generally enjoying good relations with its regional neighbours tensions have emergedwith its closest neighbour Indonesia In particularly, the first two quarters of 2008 have seen fraughtnegotiations over the Defence Cooperation Agreement (DCA). The DCA formally recognises defence tiesbetween the two countries and ensures increased defence industry collaboration and greater access totraining facilities. In effect this merely systematises arrangements going back decades but some inIndonesia’s parliament have threatened not to ratify the agreement. Defence Minister Teo Chee Heanrecently said that many of these objections are due to procedural concerns and Singapore has madeproposals to Indonesia on how both countries can move forward. It is now awaiting a response fromJakarta.

Singapore continues to develop and maintain other key regional and US defence relationships. TheSingapore Armed Forces the United States Navy and the United States Coast Guard have held theirfourteenth annual US-Singapore Cooperation Afloat Readiness and Training (CARAT) exercise focusingon conventional maritime competencies. That followed earlier exercises between the SAF and ther IndianArmy. The bilateral armour exercise, codenamed Bold Kurukshetra, held in central India, was the fourthin the Bold Kurukshetra series of annual exercises between the two countries.

Singapore’s defence industry has experienced consistent growth over recent decades and is set for furtherexpansion into regional and US markets. Rolls-Royce plans to establish aero-engine facilities inSingapore as well as the US in a phased programme over the next five years worth approximatelyUS$307.8mn. The move will enable Rolls-Royce to strengthen ties with Singapore, which is one of thekey investors in the global aero-engine market.