WASHINGTON — Continuing conflict in the Middle East, which recently reached new heights with an eruption of Saudi-Iranian rancor, will continue driving political and military choices in the US and across the Gulf region.

How to confront the Islamic State group will be an inescapable theme in the US presidential election, and inevitably influence military funding decisions.

The US will continue its push at Pentagon reform with a focus on tech development and ties with Silicon Valley. Meanwhile, the Pentagon is keeping an eye on continuing mergers within the defense industry while striving to streamline the foreign military sales process.

In the Mideast, Sunni-Shiite cross-currents will continue to roil the region: The Saudis may send special forces into Syria; a Saudi-led coalition has been battling Houthis in Yemen; Egypt is engaged in Libya and the Sinai; an Islamic counter-terror coalition of Islamic nations was announced in December, but details remain sketchy.

Meanwhile, major weapon acquisitions continue, including Rafale fighter aircraft sales to Egypt and Qatar and a possible Eurofighter Typhoon buy by Kuwait.

Across Europe, numerous military programs and industry moves are in progress, driven by strategic and economic forces.

Italy's Finmeccanica is completing its restructuring, and the country could see its first strategic review in 11 years. Germany is preparing its first white paper in a decade. France waits to see how the new joint venture between Nexter and German company Krauss-Maffei Wegmann operates, and pursues Rafale sales with India and UAE. Britain will see appointments for chief of the Defence Staff and three of the four service chiefs, and proceed to renew the Apache helicopter fleet and procure a wheeled mechanized infantry vehicle. In Eastern Europe, Lithuania has reinstated the draft, and Poland and the Czech Republic plan to buy helicopters and transport aircraft.

In the Asia-Pacific region, China's aggressive military expansion and territorial claims across the South China Sea and along its border with India continue to set the agenda.

In Taiwan, a new party is expected to win presidential elections in Taiwan this month, unseating a more China-friendly government, while the nation's Navy is moving ahead on a design program for attack submarines. North Korea, after recently announcing it tested a hydrogen bomb, continues to pursue a nuclear-armed ballistic missile force. India will revive, or make milestone decisions on, procurement of air-independent propulsion submarines, an advanced medium combat aircraft and the indigenous Future Infantry Combat Vehicle.

Australia will make industrial decisions on its Future Submarine program and Land Combat Vehicle System programs.

UNITED STATES: Internal Reforms, External Threats Drive 2016 Agenda in US

Defense secretary: With about a year left in the Obama administration, Ash Carter is under the gun to push his reform platform inside the Pentagon. Among Carter's goals: increase ties between the DoD and Silicon Valley; push forward with the "rebalance" to the Pacific; develop the technologies for the "third offset" and reform the US military's personnel structure. How much of that he can get done while also waging war against the Islamic State group will define his tenure.

US President Barack Obama and Defense Secretary Ash Carter speak during a national security council meeting on the counter-ISIL campaign Dec. 14 at the Pentagon.

Photo Credit: Olivier Douliery, pool/Getty Images

National Security Adviser:

Islamic State group: It seems obvious to say, but the Islamic State group, commonly known as ISIS or ISIL, will define the last year of the Obama administration. If the US and its allies are able to show tangible progress against the group, it could allow room for addressing other issues; if the fight bogs down, so too will Obama's agenda in his last year.

Undersecretary for acquisition, technology and logistics: Frank Kendall will continue to oversee Pentagon modernization but will also attempt to exert control over the defense industry. In September, Kendall drew a line in the sand against further mergers of prime contractors, pledging to seek congressional action to prevent more consolidation. If industry pushes back, it could be a test of the Pentagon's ability to corral industry.

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FMS process: Foreign partners have long complained about the speed of the Foreign Military Sales (FMS) process, but those complaints increased in 2015, particularly from Gulf allies that found themselves using up draining stockpiles of weapons and equipment during campaigns in Yemen and Syria. Top US officials such as Air Force Secretary Deborah Lee James and Senate Armed Services Committee Chairman Sen. John McCain, R-Ariz., have pledged to look into ways the process can be sped up; if they are successful, it could permanently alter how the US arms its allies worldwide.


The chairman: Under the umbrella of a Goldwater-Nichols Act review, McCain, as Senate Armed Services Committee Cchairman, Sen. John McCain, R-Ariz., conducted broad hearings exploring the Pentagon’s acquisitions and personnel systems and the law itself, which underpins the roles and responsibilities of the defense secretary, the Joint Chiefs chairman, the service secretaries and service chiefs, as well as DoD’s unified commands around the globe. What reforms those hearings yield and the Pentagon’s response are expected to play out in 2016.

The leadership: "Regular order" on appropriations bills has become the mantra of new House Speaker Rep. Paul Ryan, R-Wis., which is to say that both chambers would pass 12 individual spending bills and then work out their differences in conference. The idea is meant to assuage the upstart faction of congressmen who ousted Ryan's predecessor, John Boehner, as regular order gives them more of a voice. Senate Majority Leader Sen. Mitch McConnell, R-Ky., and Senate Minority Leader Sen. Harry Reid, D-Nev., have already expressed support for the idea, though it remains to be seen how Democrats will cooperate. Meanwhile, Ryan has indicated he will use the House to set priorities for the GOP before the party settles on its nominee.

The candidates: Islamic State-inspired terrorist attacks have shifted the dynamics of the 2016 campaign and raised the stakes for candidates on defense and foreign policy. The Pew Research Center’s latest national survey found that terrorism has reshaped the public’s agenda, as 29 percent of the public now cite terrorism, national security or the Islamic State as the most important problem facing the country — up from 4 percent a year ago. Republicans have attempted to use the 2012 Benghazi attack to chip away at the national security bonafides of Democratic presidential frontrunner Hillary Clinton, but whoever emerges from the Republican pack will have to strike out in a bold direction or wind up debating the relative subtleties of foreign policy with the hawkish former secretary of state.

Sequestration: A crucial two-year bipartisan budget deal eases budget caps in 2016, but it’s worth watching whether lawmakers discuss repealing the law or whether it seems to be if it's here to stay. In late November, McCain introduced legislation exempting the DoD, Department of Homeland Security, the intelligence community, State Department and National Nuclear Security Administration from spending caps, known as sequestration — a measure that, if passed, would cost Democrats their valuable hostage in future budget negotiations — and it remains to be seen whether McCain or others revive this idea in 2016.

Share buybacks: Many defense firms have spent billions of dollars to keep their stock prices high when there aren’t very many new programs being awarded. The strategy has been effective, but it also produces diminishing returns and isn’t seen as a viable long-term strategy. Some analysts think the window for effective buybacks will close in 18 to 24 months. Industry watchers will be are curious to see which company discontinues the practice first, what strategy replaces it and whether it compels another round of mergers and acquisitions.

Portfolio reshaping: Under pressure from investors to show profitability, many companies are actively retooling their holdings to focus on core businesses. For primes like Lockheed Martin, this means shedding its information technology and technical services businesses while adding to its platform production by acquiring Sikorsky Aircraft. Some industry watchers say this creates opportunities for significant reconfiguration in the defense industrial base as some of the shed businesses are reconfigured as parts of other companies. Meanwhile, firms sectors with possible long-term growth potential, including cybersecurity, ISR and real-time video analysis, will likely continue to be attractive acquisition targets.

SpaceX and Blue Origin founders: As a new space race heats up, SpaceX's Elon Musk and Blue Origin's Jeff Bezos, two founders with deep pockets and get-it-done attitudes, seem to be locked in a competition that will make access to space cheaper and easier. Both Blue Origin and SpaceX launched and re-landed the first stage of their rockets after suborbital flights in 2015.

US Army

New chief of staff: Gen. Mark Milley became the Army’s top officer on Aug. 14, after serving as commander of US Army Forces Command. Milley has made it clear that his first priority is ensuring soldiers are ready to fight is his first priority and that, in order to keep the service strong as it shrinks, the Army needs to be seen as a total force of active and reserve troops to keep the service strong as it shrinks. Milley has hinted at how the force will come together, stating he will turn to the Army National Guard heavily. Such statements have given give the Guard a renewed hope it will get what it needs as it has battled with the active force to keep certain capabilities — such as its AH-64 Apache attack helicopters.

New acting secretary: Eric Fanning, a close adviser to Defense Secretary Ash Carter, is slated to take over as Army secretary, replacing John McHugh, who retired Nov. 1 after more than six years in the job. Fanning, now the acting Army secretary, is expected to be confirmed by the Senate in 2016, although his confirmation hearing before the Senate Armed Services Committee has yet to be scheduled. Widely viewed as one of the most capable leaders in the Pentagon, his insight from other services could help the Army see fresh ways to procure equipment and manage its personnel.

Future of the Army: The National Commission on the Future of the Army will publicly unveil its recommendations on a wide range of issues Jan. 28, just days before its Feb. 1 deadline. Congress established the commission — tasked to take a deep dive into the force structure and operational requirements for the future Army —  after the Army and National Guard became deadlocked in a fight over how many soldiers should serve in each component and the types of capabilities each should have. The commission’s findings could play an important role in shaping the Army of the future if recommendations are taken to heart.

JLTV lawsuit: Lockheed Martin filed a complaint mid-December with the Court of Federal Claims over the Army’s decision to award Oshkosh a contract to build its Humvee replacement. Lockheed originally filed a protest with the Government Accountability Office on Sept. 8 shortly after Oshkosh won the Joint Light Tactical Vehicle production award, and a decision was due Dec. 17. But new Army-supplied information that emerged toward the end of the GAO’s protest process led Lockheed to move its protest to federal court. In 2016, Oshkosh may be further delayed from starting work under the $6.7 billion contract to produce 16,901 vehicles the Army wants. Much is at stake in a court decision — building JLTV could be worth up to $30 billion in the long run.

US Navy (Chris Cavas) / 1 read-ms

New CNO making his mark: Adm. John Richardson steps out in his first full year as the chief of naval operations. The former director of naval reactors will have an increasing impact on the service as he gives congressional testimony in support of the 2017 budget and pushes for support of the Ohio-class replacement submarine.

LCS program changes: Defense Secretary Ash Carter’s December directive to cap littoral combat ship (LCS) production at 40 ships rather than 52 and down-select to a single shipyard is likely to produce heavy backlash in Congress, which is unlikely to support cutting a major program in an election year. Meanwhile, the 2017 budget should contain significant details on what the frigate version of the LCS will look like, while the Navy works to install surface-to-surface missiles on its ships already in service and under construction.

RMS decision: The future of the remote minehunting system (RMS) is now being decided at the Navy's highest levels. Test vehicles have long been plagued by reliability issues, but Navy and Lockheed officials say new production models will incorporate numerous fixes. A decision — which could come as soon as this month — on whether to proceed to production or cancel the program and seek alternatives will affect how the Navy carries out anti-mine warfare over the next five to 10 years.

T-AO(X) oiler: Sometime this summer the Navy is expected to select Huntington Ingalls Industries or General Dynamics National Steel and Shipbuilding (NASSCO) as the lead yard for a new class of fleet oiler replenishment ships. The other yard will then receive the contracts for LHA 8, a new large deck assault ship. As many as 16 oilers could be built.

US Coast Guard OPC: The largest US government shipbuilding program up for grabs is the offshore patrol cutter (OPC), 25 medium-sized cutters that will provide significant work for the winning shipyard for years to come. In a decision expected by late summer or early fall, the Coast Guard will choose between Bollinger Shipyards, Eastern Shipbuilding Group or General Dynamics Bath Iron Works.

US Air Force (Lara Seligman) / 1 read-ms

Bomber questions: After months of delays and speculation, the Pentagon finally awarded the long range strike-bomber (LRS-B) contract to Northrop Grumman in October. But the losing Boeing-Lockheed Martin team didn't back down lightly — the Government Accountability Office is scheduled to issue a decision on the contractors' protest of the award in February. But many questions remain about the highly classified program. How much will it cost, and how will the Air Force fund it? What companies will build the critical subcomponents? And what capabilities will the new bomber bring to the war fighter?

F-35's busy schedule: After declaring the Marine Corps' F-35B ready-to-go in 2015, the F-35 program is scheduled to hit another milestone this summer when the Air Force's F-35A variant goes operational. Meeting the August deadline is crucial to moving the program along to the Navy's 2019 target date. After an engine fire forced the F-35 to miss its planned debut at the 2014 Farnborough International Air Show in the UK, all eyes will be on the plane to show up for this year's event. Meanwhile, the Air Force must allay concerns about the plane's ejection seat, helmet and IT system.

Next for JSTARS: The Pentagon in December finally gave the Air Force the green light to take the next step in its effort to recapitalize its ground surveillance fleet, the Joint Surveillance Target Attack Radar System, putting to rest rumors it might cancel JSTARS. Now, the three contracting teams can move forward with additional risk reduction and prototyping work. Industry widely expects a down-select for the development contract in the summer or fall of 2017, but the Air Force may look to accelerate that schedule.

Air Force Space Command boss: As the commander of Air Force Space Command, Gen. John Hyten is tasked with overseeing a planned $5 billion expansion of space surveillance and protection efforts — many of which are classified. The fight over the  Russian RD-180 engine — currently used to power US military space launch — will also come to a head in 2016.

Next chief of staff? Air Force Chief of Staff Gen. Mark Welsh is scheduled to retire this summer, so the race is on to find a replacement. Early public consensus has coalesced around Gen. Lori Robinson, commander of Pacific Air Forces, whose meteoric rise in the service took her from two-star in June 2012 to four-star in October 2014. However, Robinson's quick rise and non-pilot status (she is a senior air battle manager with more than 900 hours aboard the E-3B/C and E-8C) could hurt her chances.


Minister of Defense: Harjit Sajjan, appointed Canada’s new defense minister on Nov. 4, has been was dubbed a "badass" on social media and by military commentators because of his combat experience during the Afghan war when he was an intelligence officer. But with the public relations honeymoon now over, Sajjan will be expected to deliver on Liberal Party government promises to start a new procurement program to replace Canada’s CF-18 fighter jets and oversee the introduction of more Canadian training troops for Iraqi security forces.

Defence Staff boss: High-profile issues facing Gen. Jon Vance, chief of the Defence Staff, in 2016 include how the Canadian Forces will deal with ongoing problems of the Royal Canadian Navy's ambitious shipbuilding program. But high on Vance's agenda is dealing with the sexual misconduct crisis plaguing the military.

Iraq war: New Prime Minister Justin Trudeau has promised to withdraw the country’s six CF-18 fighter jets that are taking part in the coalition bombing campaign against the Islamic State group (ISIS). Now he is trying to figure out how to keep his promise without angering the US-led coalition, while still offering a meaningful Canadian commitment to the war against ISIS.

SAR aircraft purchase: Efforts to acquire a new fleet of fixed-wing search-and-rescue (SAR) aircraft for the Royal Canadian Air Force has been ongoing for more than a decade. Bids are due from aerospace firms in mid-January and industry will be carefully watching whether Canada's procurement system can finally move forward on the multibillion-dollar program in 2016.

Europe: Aircraft, Naval Programs Advance Across Continent


Finmeccanica CEO: On Jan. 1, Finmeccanica completed its absorption of semi-autonomous units such as AgustaWestland and Alenia into a unified corporate structure where they will operate as divisions. CEO Mauro Moretti has said some historic brands will be retained, but only for products. Also, expect a new name to replace Finmeccanica.

Eurofighter: An effort to sell 28 aircraft to Kuwait paid off in September, but a year-end signing has slipped. Rome sources insist ministers are just looking for the right date for a ceremony, maybe even this month.

Defense Strategic Review: Italy published its first white paper in 13 years in 2015, which was meant to generate a strategic review by year's end — the first since 2005. The review should appear this year and could be followed by a new rule, suggested by the white paper, making defense budgets six-year, rather than annual, documents.

Defense minister: As Libya’s two rival governments slowly edge toward a peace deal, Italian Defense Minister Roberta Pinotti might OK Italian leadership of a Western military presence in the country, if the Libyans request it. The mission will likely stick to training and security on paper, although with Islamic State group fighters heading to Libya to avoid bombs in Syria, combat may become a reality./

The Hammerhead UAV: Piaggio Aerospace is expected to deliver this spring the first two of about four P.IHH Hammerhead UAVs to the Italian Air Force. The acquisition shows Italy's impatience with sluggish European efforts to launch a medium-altitude, long-endurance program, and is also noteworthy because Piaggio is controlled by Mubadala, an Abu Dhabi-based strategic investment firm.


Defense white paper: The Ministry of Defence is preparing its first white paper in a decade for adoption this summer. The document will redefine its military role within NATO and internationally, and provide guidance on how the Bundeswehr can deepen its military partnerships and what capabilities should be expanded or reduced.

Minister of Defense: After Defence Minister Ursula von der Leyen last year mastered a media campaign against her based on the allegedly unreliable assault rifle G36, she still faces plagiarism allegations concerning her doctoral thesis, possibly endangering her position. Her main tasks this year will be to improve weapon system readiness, strengthen international cooperation and make the armed forces more attractive to volunteers.

Secretary for Armament: Former McKinsey consultant Katrin Suder, now secretary of state for armament, has developed a formidable reputation as a capable manager and has taken steps to streamline the chronically late, costly armament acquisition process. It remains to be seen if she can prevail over the bureaucracy.

Procurement: The contract for procurement of a new air defense system based on MEADS should be closed by the end of the year. For MEADS, as well as for the new frigate program MKS 180, which is open to international bidders, a new project management concept is put to the test.

Cyber: The ministry wants to combine under a single command the cyber capabilities currently dispersed within the Bundeswehr.


Defense Minister: Jean-Yves Le Drian remains defense minister despite winning office last month to head the Brittany regional council in western France. That double mandate is normally ruled out but President François Hollande asked Le Drian to stay as defense minister in view of the deadly domestic attacks Dec. 13 and deployments in Africa and the Middle East.

Nexter: The land weapons specialist will see how newly appointed Chairman Stéphane Mayer steers the company in the freshly created joint venture with German partner Krauss-Maffei Wegmann, and whether he will seal two export deals for the Titus six-wheel-drive armored vehicle.

French Rafale fighter jets are parked on the flight deck of the aircraft carrier Charles de Gaulle on Dec. 31 during operations against Islamic State militants in Syria.

Photo Credit: Kenzo Tribouillard/AFP/Getty Images

Dassault: Chairman Eric Trappier will see whether he is able to sign a contract with India for 36 Rafales in the next few months. If New Delhi does order the relatively small number of fighter jets, Trappier hopes a second order will follow. There also are talks on a Rafale order with the United Arab Emirates.

Frigates: DCNS launches studies this year on three intermediate frigates, which will equip the French Navy and target vital export markets. The warships will have antisubmarine warfare capabilities and launchers for the MBDA Aster 15 and naval cruise missile.

Cruise Missile: The MBDA naval cruise missile is due to enter into service this year on the French Navy's Aquitaine, the first of class of the FREMM multimission frigate. The weapon will give the Navy a long-range strike capability and is due to arm the Barracuda attack submarine in 2018.

A400M: Airbus Defence & Space expects to reach agreement with the seven core clients on a new delivery schedule for the A400M. Deliveries are due to ramp up to 23 units this year compared with a revised delivery target of 14 to17 in 2015.


New elections?: Dec. 20 general elections for president failed to produce a clear majority. Two possibilities have emerged: a minority government of the current ruling party PP (center-right), or a coalition of PSOE (socialist party) with extreme left-wing parties like Podemos or communists. A third option? New elections in spring.

Spanish A400M: Airbus expects to deliver the first A400M airlifter to the Spanish Air Force in May, becoming the sixth country to have the long-range transport plane.

Frigates, vehicles: Progress is expected on these two military programs, with companies like Navantia and Indra (F-110 frigates) and General Dynamics, Indra and Sapa (Piranha 5 8x8 armored vehicles) involved in R&D contracts approved last December.

Submarines: The Navy expects to have the final design for the S-80 class submarine after resolving weight problems.

Airbus: In his second year as head of Military Aircraft at Airbus Defence & Space, Fernando Alonso has a full plate in 2016: Solve the problems with the A400M airlifter; open new markets for Eurofighter (after Kuwait … Denmark next?); close potential contracts with Egypt or Jordan; and promote products like the A330 Multi-Role Tanker Transport (MRTT) aircraft or the C295 tactical airlifter. The Spanish Air Force expects to sign a contract with Airbus to buy two A330 MRTTs.


Tony Douglas: The ex-Abu Dhabi Airports boss took up the reins at the £14 billion (US $20.6 billion) a year Defence Equipment & Support arm of the British Ministry of Defence little over a month ago and will be expected to guide the organization as it pushes to improve performance.

Warren East: The boss of Rolls-Royce has a major restructuring on his hands as the civil and military engine builder seeks to recover from a series of profit warnings. A decision over the future direction of its nuclear submarine power plant business is possible this year amid government concerns over performance.

Defence Staff: This year sees the triennial senior military appointments merry-go-round get underway with Gen. Sir Nick Houghton, chief of the Defence Staff, and three of the four service chiefs due to leave their posts. Only Gen. Sir Nick Carter, chief of the General Staff and the army's top soldier, is not up for replacement in 2016. Pre-Christmas cocktail party speculation put Gen. Sir Richard Barrons, commander of Joint Forces Command, in pole position for Houghton's job. Other names in the frame for top jobs include Vice Adm Sir Phil Jones, currently the Royal Navy's Fleet Commander; Air Marshal Sir Baz North, the deputy commander capability for the Royal Air Force; and Air Marshal Sir Stephen Hillier, the deputy chief of defence staff (capability).

Ian King: Could this be the year BAE Systems' long-serving CEO steps down? Last year there was speculation BAE was preparing the ground by seeking government permission to appoint a foreign chief executive if it wished, and later the company confirmed media reports it had appointed head hunters to "scan the horizon" for a possible long-term replacement.

Nuclear deterrent: Parliamentary approval for BAE Systems to start building four nuclear missile submarines for the Royal Navy is hoped for this year. The recent strategic defense and security review (SDSR) revealed the program was being slowed several years but with a price tag of £31 billion and a contingency fund of a further £10 billion, the Successor program dwarfs other MoD procurement plans.

Apache replacement: Government go-ahead to renew the British Army's Boeing-built Apache helicopter fleet is set for this year. One key decision will be whether AgustaWestland, Britain's only indigenous helicopter maker, will find a role in the program to provide about 50 machines.

Mechanized Infantry VehicleLast November's SDSR signaled approval for an 8x8 wheeled mechanized infantry vehicle procurement for the Army as it seeks to create two new strike brigades by 2025. It's likely the process will get underway by the end of the year.

Type 26 frigate: The SDSR cut Type 26 anti-submarine warfare frigate program numbers from 13 to eight and said a lighter, general purpose warship would replace the five axed frigates. A production contract allowing for the first cutting of metal on the Type 26 could be pushed back a year to 2017, but it's possible the government will award some kind of deal to maintain program momentum after completion of the £859 million demonstration phase planned for April.


Air Force: After several postponements, on the decision-making time frame, the Ministry of Defense is now on course to select a new aircraft type for the Air Force in the second half of 2016. The three candidate aircraft left standing in the $4.5 billion Fighter Replacement Program are the Eurofighter Typhoon, the Boeing F-18F Super Hornet and the F-35A Lightning II. 

Finland’s Ministry of Defense plans to dispatch a request for information (RfI) concerning the Finnish Air Force’s (FAF) HX Fighter Replacement Program by April 1. 2016. The RfI will be directed at four countries and manufacturers, including Boeing and Lockheed Martin, (F-35, F-18, F-16 and F-15), France’s Dassault, (Rafale), Sweden’s Saab (JAS-39) and BAE Systems/NETMA’s (Tornado Management Agency) Eurofighter. The program aims to replace the FAF’s fleet of F/A-18 Hornets which are scheduled to be decommissioned in 2025. 


Supreme commander: Gen. Micael Bydén became the supreme commander of Sweden’s armed forces in October. 2015, replacing Gen. Sverker Göranson. Holding the position as the Swedish Air Force’s Chief of Staff prior to his appointment, Bydén can be expected to build on the Göranson’s legacy of fight ing hard, and often against political opposition and for significant increases in the armed force’s core budget; closer defense relations with NATO; and deeper common military structures with Finland. 

Saab: Håkan Buskhe is a strong advocate of growing Saab Group’s recently enlarged naval division through acquisitions and global partnerships, particularly in the area of submarine design and production. Saab can be expected to pursue ever more ambitious corporate acquisitions and collaborative partnerships within the naval segment globally in 2016., as the Swedish defense group re-positions to become a more robust international player in the supply of submarines as well as surface warship and Underwater weapons systems and technologies.


Poland's new defense minister: Antoni Macierewicz was appointed defense minister in November following a parliamentary election that paved the way for a new government formed by the conservative Law and Justice (PiS) party. The party's nationalist stance and its leaders' anti-Kremlin rhetoric likely will further strain Warsaw's ties with Moscow

Conscription: Lithuania reinstated its military draft last year as a result of "changes in the geopolitical situation in the region," according to the country's Prime Minister Algirdas Butkevicius. Latvia and Romania are among the other Eastern European allies mulling a return to conscription following Russia's military intervention in Ukraine.

Polish and Czech aircraft programs: Poland and the Czech Republic plan to buy new aircraft for their air forces, with procurements expected to enter decisive phases this year. In December, the Czech Defense Ministry invited producers from other NATO member states to submit offers for the delivery of 12 helos to replace outdated Soviet-designed copters. The ministry also plans to buy new transport aircraft. The new Polish government plans to remodel Poland's 60 multipurpose helicopter purchase. In addition to Airbus Helicopters' EC-725 Caracal, which won last year's tender, Warsaw is considering buying Sikorsky Black Hawks and AgustaWestland AW149s, both produced at Poland-based plants.

Polish defense industry overhaul: Following the appointment of a new chief executive to head leading state-run defense manufacturer the Polish Defense Group (PGZ), the country's new government announced plans to increase the Defense Ministry's control over Poland's state-run defense industry. The new CEO, Arkadiusz Siwko, was one of Defense Minister Antoni Macierewicz's closest aides. Last year, Macierewicz said his ministry would award more orders to Polish defense companies and foreign players who operate plants in Poland.


Elections: In general elections June 7, the ruling Justice and Development Party (AKP) lost its parliamentary majority for the first time since it came to power in 2002. But in snap polls Nov. 1, Prime Minister Ahmet Davutoglu won 49.5 percent of the vote and formed his single-party government. The renewed polls gave him a four-year mandate.

President Recep Tayyip Erdogan: The founder of AKP is the man to watch in 2016. He has limited constitutional powers and the seat he occupies is largely symbolic. But he is pushing ahead for a constitutional amendment to introduce an executive presidential system. He needs at least 330 votes in parliament for any amendment, but the AKP has 317 seats.

Defense minister and procurement chief: After a brief departure when he was elected parliament speaker between the two elections, Ismet Yilmaz returned to his seat as defense minister when Davutoglu announced his cabinet in November. Chief procurement official Ismail Demir, head of the Undersecretariat for Defense Industries, remains in office.

Kurdish war, again: After a two-year cease-fire, Kurdish separatists returned to arms. Thousands have been killed since violence erupted after radical Islamists killed more than 30 pro-Kurdish activists in a July 20 suicide bomb attack in a small town near Turkey's border with Syria. The resumption of the three-decade fight has changed Turkey's procurement priorities in favor of asymmetrical warfare gear.

Anti-IS coalition: Turkey has not only allowed a US-led coalition to use its airbases in attacks against the Islamic State group (IS) strongholds in Syria but has also joined the campaign. On Oct. 10, IS militants killed more than 100 people in Ankara in Turkey's worst-ever terror attack.

No more Chinese air defenses: Two years after selecting China Precision Machinery Import-Export Corp. (CPMIEC), a Chinese systems maker, to build its first long-range air and anti-missile defense system, Turkey scrapped the contract. CPMIEC had defeated US (Lockheed Martin and Raytheon), European (Eurosam) and Russian (Rosoboronexport) rivals in its $3.44 billion bid. Turkey has tasked local companies Aselsan and Roketsan with developing the system but may buy an interim off-the-shelf solution.

Russia crisis: Turkey became the first NATO country to shoot down a Russian bomber since the beginning of the Cold War. Ankara cited a brief violation of its airspace by the Russian Su-24 in the Nov. 24 incident and has refused to apologize to Moscow. Russia imposed a slew of economic sanctions on Turkey but President Vladimir Putin has vowed that retaliation would not end there.

Indigenous programs: The most important Turkish programs to watch in 2016 include serial production of the homegrown Altay new-generation battle tank, various drone efforts, helicopters and a project to produce a regional jet with dual military and civilian use. Turkey also will continue to push an ambitious program to build its first indigenous fighter jet.

MIDEAST/AFRICA: Yemen, Syria Conflicts Rage; Israel Eyes Missile Defense, US Ties

Yemen: Defense Minister Gen. Mahmoud al-Subaihi has been a prisoner in the hands of the Houthi militias since March. Forces commanded by al-Subaihi helped capture the Aden airport on March 19 but the general was captured March 25. The release of al-Subaihi and other commanders has been a major stumbling sticking point during UN-sponsored peace talks. Meanwhile, operations in Yemen are intensifying and a major push is expected toward Sanaa if the ongoing peace talks fail this month. Kuwait has ordered ground troops to join the Emirati, Saudi, Bahraini, Sudanese and Qatari military presence in Yemen.

The US remains the dominant weapons exporter in the world, with the sales of high-end systems like the F-15 to Saudi Arabia maintaining a global edge.

Photo Credit: Fayez Nureldine/AFP

Saudi Arabia: Prince Mohammed bin Salman, deputy crown prince and minister of defense, is also director of the Council of Economic and Development Affairs and chairman of the supreme council of Saudi Aramco. He is facing an impending economic crises due to because of low oil prices in addition to and the ongoing operations in Yemen against the Houthi rebels. The Saudi military is also revamping its naval component and may send special forces into Syria.  

Egypt: President Abdel Fattah al-Sisi has been engaged in the Libyan conflict, battling an insurgency in Sinai and revamping the economy. Military moves included becoming Egypt became the first international customer for the Rafale fighter jet, and securing secured the purchase of two, made-for-Russia, Mistral amphibious ships. Deals are expected this year with China for military equipment and France for military satellites.    

Counter-Terror Coalition: Details remain sketchy after the announcement in December by Mohammed bin Salman of an Islamic military coalition to fight terrorism. More details are expected to emerge on how the coalition will function, if there will be any presence in Syria, Iraq, Libya or Yemen, and who will be the major participators.

Kuwait and Qatar: Both governments are close to finalizing deals for fighter jets from both US and European suppliers, with an expected announcement that Kuwait will purchase 28 Eurofighters. Kuwait is also expected to buy Boeing F/A-18 Super Hornets, Apache helicopters and naval weapons from France. Qatar last month made a down payment for its 24 Rafale fighter jets and has new interest in acquiring F-15 fighters for its air force.


Prime minister: Re-elected last March, look for Prime Minister Benjamin Netanyahu and his nationalist-religious coalition government to perpetuate a zero-tolerance-for-terror platform, with continued settlement building in the West Bank, disparagement of the Palestinian Authority and firm military responses to attempted border incursions and rocket, mortar and missile attacks from Gaza, Lebanon or Syria. On Iran, where Netanyahu remains opposed to last year’s nuclear deal, expect him to flag Israel’s right to preemptive self-defense with every perceived direct or indirect violation by Tehran of the Joint Comprehensive Plan of Action (JCPOA).And w   While Netanyahu will strive to mend soured relations with US President Barack Obama, — or at least not actively contribute to another rupture, such as interfering in the US presidential race — look for him to draw closer to Russian President Vladimir Putin as Israel and Russia continue to coordinate military deconfliction in Syria.

Defense minister: Moshe Ya'alon, once rebuked in Washington for his ad hominem attacks on US Secretary of State John Kerry as an "obsessive" and "messianic" proponent of an Israeli-Palestinian peace deal, is emerging as the responsible adult in Israel's actions vis-a-vis the US administration. The two-term defense minister and former IDF chief of staff now enjoys sufficient credibility in the cabinet to challenge hardline settlers who seek to circumvent IDF authority in the West Bank. Ya'alon could elevate US-Israel strategic ties to new heights while smoothing the way to a new, 10-year US-Israel security assistance package.

Missile defense: The late-December sacking of Israel Missile Defense Organization (IMDO) Director Yair Ramati over breaches of information security guidelines comes at a critical juncture for Israel's multi-tiered intercepting network. In the first quarter, MoD will deliver its newest David's Sling intercepting layer to Air Force users as it segues into low-rate production of the upper-tier Arrow-3 system and continues to make improvements to its lowest-tier Iron Dome and the 20-year-old Arrow-2 system. Look for MoD to replace Ramati with someone from Rafael, rather than IAI, which provided the previous three IMDO directors.

Elbit Systems: Israel's largest publicly traded defense firm has systematically acquired over 20 years nearly 80 percent of the country's non-state-owned defense industrial sector. Look for Elbit's newest big-ticket acquisition: state-owned IMI, which the government hopes to privatize during 2016.

Plan Gideon: The Israel Defense Forces (IDF) is moving ahead with its first pre-approved multi-year plan in years. Plan Gideon-prescribed modernization priorities include intelligence systems, cyber, additional strike fighters, a new commando force, ground force protection and new fully equipped surface fleet to defend Israel's offshore energy assets.

ASIA: Chinese Ambitions Drive Asia-Pacific Politics


Elections: Tsai Ing-wen, under the Democratic Progressive Party (DPP), is expected to win Taiwan's Jan. 16 presidential election by a landslide and unseat the China-friendly Chinese Nationalist Party (KMT). There are also indications the DPP will unseat the KMT in the legislature. If the DPP wins both, it will have to be tread carefully and not enrage China. Tsai is intimate with cross-strait political issues and served on the National Security Council under former President Lee Teng-hui.

Submarines: Despite having no experience building attack submarines, the Taiwan Navy is moving forward on a design program. The question many are asking within the Taipei government is whether the US government will allow US companies to participate in the program.


South China Sea: China appears dedicated to continuing its controversial land reclamation program in the South China Sea. The effort appears related to China's efforts to claim the South China Sea as Chinese territory, and efforts by the US Navy to challenge these claims have only aggravated tensions.

Xi Jinping: China's president has been ramping up territorial claims along the border with India, aggravating Southeast Asian nations by claiming the entire South China Sea as Chinese territory, and challenging Japan's claims over the Senkaku Islands. Xi has also initiated a sweeping anti-corruption campaign targeting senior government officials, many of whom have fled the country. Will Xi continue his policies into 2016? Most likely.


Najib Razak: Malaysia's prime minister, alleged to have received $700 million in questionable transfers to his personal bank account, responded to the allegations with a National Security Council law giving him unprecedented powers over security issues. Opponents have called the bill a move toward authoritarianism and a threat to human rights.


White paper: The 2015 defense white paper will now have to be the 2016 DWP, despite the line taken last year that it would be published that year. Major programs include replacing the fleet tanker and acquiring a littoral operations ship.


Nuclear missiles: North Korean leader Kim Jong-Un is advancing efforts to develop a nuclear-armed ballistic missile force. No amount of sanctions or threats appear to slow his efforts.


Manohar Parrikar: India's defense minister will announce long-pending initiatives on procurement  procedures that could include ending the blacklisting of certain overseas defense majors. In addition, Parrikar will have to decide how hard to push homegrown defense projects over imports, and how to prioritize weapon purchases in the face a budgetary crunch.

PROJECT 75-I: The delayed $12 billion Navy project to procure six air independent propulsion submarines is likely to be floated in 2016. Russian, German, French and Japanese firms are contending.

AMCA: A final decision on the indigenous Advanced Medium Combat Aircraft is likely to be decided in 2016. Clearance of AMCA for the Indian Air Force could put a cap on purchases of medium combat aircraft from the overseas market. Final operational clearance of the homegrown Light Combat Aircraft also is expected in 2016.

FICV: Bids for the $11 billion homegrown Future Infantry Combat Vehicle close in 2016. FICV is the first project built under the "Make India" category, under which the government will fund 80 percent of a prototype.


Defence minister: Marise Payne is expected to release Australia's Defence White Paper and Force Posture Review in January, along with what the government calls a "fully costed" capability plan. Payne became the third person to hold the position in less than a year when she took office in September.

Combat vehicles: A down-select for Phase 2 of Land 400, part of the Army's AUS $10 billion (US $7.3 billion) Land Combat Vehicle System program, is expected at the end of March. Phase 2 seeks to acquire 222 combat reconnaissance vehicles.

Future Submarine: The government is expected to announce by mid-year who will be invited to participate in Project Sea 1000, the Future Submarine Program.

PAKISTAN / 1 read-ms

JF-17: Talks are ongoing with a number of possible buyers for the Sino-Pakistani fighter aircraft, with Myanmar believed to have ordered 16 for delivery in 2017. Possible orders could be forthcoming this year from Egypt, Morocco, Nigeria and Sri Lanka. Export earnings would be reinvested into the program. The Pakistan Air Force's modernization efforts may include more F-16s as well as continued JF-17 acquisition.

Tanks and troop carrier: Chinese company Norinco's VT-4/MBT-3000 seems to have been rejected, in its current form at least, as Pakistan's next-generation main battle tank, but there could be further developments this year. The upgraded Al-Khalid II, which failed to make an appearance at IDEAS 2014, may be unveiled. Details of a plan to upgrade the T-80UD tanks bought from Ukraine in the 1990s also could emerge this year. And confirmation could be forthcoming on efforts to domestically produce (or not) the Norinco ZBL-09/VN1 8x8 armored personnel carrier.

Naval needs: The contract for eight Chinese air-independent propulsion submarines agreed to last year will have to be signed soon to stave off the likelihood of a submarine gap once Pakistan's two Agosta-70s decommission. Obsolescence looms for the Navy's surface fleet. Its aging Type-21 frigates are increasingly outclassed and unable to effectively defend themselves against missile attack, and Congress has effectively killed hopes of replacing them with more acquisitions of former US Navy Perry class frigates. Submarine acquisition is taking precedence, however.

Operation Zarb-e-Azm: Pakistan's counterterrorism efforts continue with the final Pakistani Taliban positions in the Shawal Valley, North Waziristan, being incrementally taken. Army chief Gen. Raheel Sharif has said terrorism will be eliminated in 2016, but difficult terrain, sociopolitical conditions on the ground and a lack of government follow-on measures may hamper this goal.

National security adviser: Nasser Janjua, a retired Army lieutenant general appointed to the post in October, is unusual in having the trust and respect of both the prime minister and Army chief. This should ensure smooth military/government relations and contribute to the combined effort regarding counterterrorist operations, Pakistani-Afghan relations and the critically important dialogue with India.

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