COVID-19 has a significant impact on the Navy development budget

As the effects of the pandemic spread completely, the Navy’s defense budget is expected to vary from region to region.

The verdict conducted a poll to assess the impact of budget shortages caused by COVID-19 on Navy development.

Analyzing poll results, we found that 52% of respondents predicted significant impacts and 33% predicted minor impacts. The remaining 15% of respondents expect COVID-19 to have no impact on the Navy’s development budget.

The analysis is based on 254 responses received from readers of Navy technology, The Verdict Defense Site from May 17th to June 7th, 2021.

Impact of COVID-19 on Navy Development Budget

The global economic contraction caused by the COVID-19 pandemic has affected naval defense budgets around the world. While tensions in the South China Sea increased, naval budgets in some Southeast Asian countries increased, but defense spending in the majority of countries in the region, as well as in the United States and Europe, declined during the pandemic.

China increased its defense budget to $ 281.1 billion for the first time in 2021, according to GlobalData, to $ 258.7 billion in 2020 and $ 247.2 billion in 2019. The budget was primarily focused on procuring more aircraft carriers amid growing tensions between the United States and Taiwan over the South China Sea.

However, the defense budgets of the majority of Southeast Asian countries in 2021 declined during the pandemic, despite increased budget allocations for Indonesia, the Philippines and Vietnam. For example, Indonesia increased its defense budget by $ 10.2 billion in 2021, compared to $ 8.4 billion in 2020 and $ 7.8 billion in 2019. The budget increase is primarily aimed at strengthening the Navy’s fleet after the sinking of the KRI Nanggala-402 submarine in April. 2021. Indonesia plans to procure at least 12 submarines and fleets to strengthen its Navy’s capabilities to counter geopolitical tensions in the South China Sea.

Similarly, the Philippines and Vietnam increased their defense budgets by 12% and 11.6% in 2021 compared to 2020, respectively. However, Singapore (-2.4%), Brunei (-19.8%), Myanmar (-5.5%), Malaysia (-2.3%)) and Thailand (-3.8%) have cut their defense budgets.

Meanwhile, European defense spending is projected to shrink in 2021. NATO predicts that two-thirds of its members will not be able to meet their 2% target spending on GDP in 2021. If some members reach their target spending, they will remain below the target due to the reduction in GDP caused by the pandemic.

For example, the European Defense Fund (EDF) was initially expected to receive € 13.4 billion ($ 15.8 billion) between 2021 and 2027. Funds fell 40% in May 2020 to € 8 billion ($ 9.4 billion) and in April 2021 to € 7.9 billion ($ 9.3 billion). US defense spending, albeit modest, fell to $ 716.2 billion in 2021. 2020. The pandemic will include test delays in the Aegis Ballistic Missile Defense (BMD) system program, production delays in the Standard Missile-3 (SM-3) Block IIA, and construction delays at the Aegis Ashore missile site in Poland. Also affected. COVID-19 has a significant impact on the Navy development budget

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