CONFIDENTIAL
4. Asia and Australasia consist of two sub-sectors, South West Asia (Pakistan through Burma) and the Eastern Pacific Rim and South East Asia. South West Asia is expected to account for up to 10% of the market, as India will continue to strive to become the local regional power. Problems with funding throughout the 1980s/1990s will continue with many plans being extended into the next century. Exports may also have become a factor in both India and Pakistan, but lack of skilled and trained manpower will still prevent many of the more sophisticated programmes from being completed. Competition from the civil side of the economy for these resources will
lead to further complications. This sector could still account for up to 10% of all 00A defence imports.
5.
The Eastern Pacific Rim and South East Asia is likely to be the most important of all the regions. In the period covered by this study further expansion and increasing sophistication in the regional Services will lead to increased opportunities. UK industry, both generally and defence- orientated, has already identified this region of the world as most important from an investment point of view, and in terms of the defence industry a large number of joint ventures and licence production deals are likely to arise. It is expected that this area could be responsible for 35% of demand in the
OOA region.
6.
Generally, technology, manpower and financial constraints will still continue to be important across all the OOA nations in the 2000-2015 period. However, the effects of increased expenditure on education may well help solve the trained manpower problem in some of the Asian nations by the end of the period. Overall, industrial joint ventures, as well as cross-continent collaboration, may well prove to be important factors in the defence export market, without which the developed world (UK) will not be able to take advantage of the general shift in defence expenditure in favour of the OOA nations. In order to sustain the UK's ability to produce the majority of our defence requirements, industry will need a strong export base to maintain economic production levels, especially as NATO and UK defence expenditure is likely to be
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B5-2 CONFIDENTIAL