New players emerge in defense market

LONDON, Feb. 9 (UPI) -- Russia, China, and other nations are making inroads into the defense industry that is currently dominated by the United States, an industry study said.

Research published in Jane's Industry Quarterly, a publication of IHS Jane's, said the defense industry will be reshaped by 2020, "as both Russia and China encroach on formerly assured markets," the consulting firm said in a statement.

In addition, South Korea, Australia, Pakistan and India will emerge as strong competitors in the industry "and challenge the established producers from the West," the study says.

"The defense trade relationships of the past two decades were very much shaped along Cold War lines. Those certainties are evaporating," said Guy Anderson, editor of Jane's Industry Quarterly.

While Russia moved into the market in part by using "sovereign debt forgiveness" as a bargaining chip, "most importantly, there is a willingness (on Russia's part) to use arms sales ... to secure access to energy fields around the world," Anderson said.

Established arms exporters deal with other hurdles. "Western firms ... in many cases find themselves hampered by the presence of arms embargoes ... and the need to align the strategic objectives of national government with the wishes of shareholders," Anderson said.