Helsinki — The value of Sweden’s weapons exports saw a significant 30 percent drop to $1.53 billion in 2012 in the face of reduced spending on military materials and continuing economic uncertainty in Europe, according to new figures released by ISP, Sweden’s state agency for non-proliferation and arms export controls.
By contrast, the ISP figures show a notable increase in sales to customer markets in Asia and the Middle East.
Although the weaker-than-expected export performance is reflected in a general decline in new orders for many Swedish defense sector companies last year, the decline can also be partly attributed to the bumper export year in 2011, when several major contracts, centered on system sales to India, Pakistan and Thailand, reached fulfillment.
“In recent years, Swedish exports of military equipment have been dominated by several major deals that had a major impact on export statistics. These included the export of the JAS 39 Gripen, the airborne reconnaissance radar Erieye [to Thailand] and the Combat Vehicle 90. A number of these systems are now delivered, and so the value of Swedish exports is reduced,” said Christer Ahlström, ISP’s director general.
The ISP figures reveal that while Swedish weapons’ exports to Europe and North America declined somewhat in value, there was a sharp increase in exports to India, Saudi Arabia, Thailand and Pakistan. Markets in Asia and the Middle East accounted for almost $600 million, or 44 percent, of all exports in 2012.
The immediate outlook for a recovery in export orders appears somewhat bleak for Swedish suppliers in 2013, based on latest order-flow data from the market’s leading companies. This is particularly the case for long-term project deliveries.
India was the main destination for Swedish military equipment in 2012, with exports worth $223 million for the year. Defense equipment valued at $143 million was exported to Saudi Arabia last year.
France, meanwhile, was Sweden’s biggest European customer in 2012, accounting for exports worth $139.1 million.
The growing importance of customer export markets in Asia for Swedish producers is reflected in strong sales to Pakistan and Thailand. Weapons systems worth $95.2 million were exported to Pakistan. The value of exports to Thailand and the United Arab Emirates (UAE) amounted to $93 million and $46.7 million, respectively, in 2012.
Around 56 percent of Sweden’s arms exports were delivered to Sweden’s so-called established partner nations in the European Union, as well as to Canada, South Africa and the United States.
Under Sweden’s Military Equipment Act, the granting of export licenses is restricted to nations on the Swedish government’s “white-list.” The ISP handles targeted sanctions against a number of black-listed countries; including Belarus, Burma, Guinea, Iran, Lebanon, Liberia, Libya, North Korea, Somalia and Syria.