Border and Maritime Security Market Insight Aug 2012


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Frost & Sullivan Market Insight on Border and Maritime Security: Global Security Challenges to Shift Border and Maritime Security Focus

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Border and Maritime Security Market Insight Aug 2012

  1. 1. Border and Maritime Security: Global Security Challenges to Shift Border and Maritime Security Focus Anthony Leather, Research Analyst, Europe – Aerospace, Defence & Security
  2. 2. Border and Maritime Security: Global Security Challenges to Shift Border and Maritime Introduction Despite continued growth and investment, border and maritime security continues to present challenges to governments around the world. Over the last decade it has yielded priority to what have been perceived as higher threat domains such as airport security, safe cities and most recently cyber security. This may be due to the immediate impact that can come as a result of an attack in these domains, which are perceived to have greater consequences than a breach in border and maritime security. Border and maritime security has, of course, not been fully neglected. The rise of piracy, especially in the Indian Ocean, as well as sophisticated and well executed cross border attacks have provided stark reminders of the importance of this domain. However, threats that are unrelated to terrorist organisations continue to rise, but have not received as much attention in recent years. Escalation of these threats will cause countries more problems in the future and will become their greatest challenge if they are not addressed now. This brief insight considers the growing threats and challenges that maritime and especially border security face that will influence the security of states in the future. The map below shows a selection of global hotspots of activity in border and maritime Security Focus security and key areas of focus over the next ten years. Border and Maritime Security – Global Hotspots, 2012 - 2020
  3. 3. Border and Maritime Security: Global Security Challenges to Shift Border and Maritime High Profile Threats Maritime Security – The High Seas There is a range of high profile border and maritime threats that state security institutions have to engage with on a daily basis. Links between global waters, oceans and seas are vital to the global economy. It is estimated that around 80% of the world’s trade is delivered by sea and remains the primary way to deliver goods including energy exports which are of principal importance to governments. Reliance on safe and secure passage of cargo is a priority for governments, uniting them in the common goal of security at sea. Piracy is a threat that countries have faced for hundreds of years, however awareness has increased with the growing number of incidents in the Indian Ocean, elevating media scrutiny over the last few years. A range of studies have concluded piracy costs the global economy around $8-12 billion a year through insurance claims, ransoms, re routing ships, security equipment and cost to regional economies. Several approaches to combat this threat have so far not been successful. The International Maritime Bureau reported 157 attacks worldwide with 18 hijackings between January and May 2012. Somali pirates currently hold 12 vessels and 157 hostages. These types of attack produce worldwide condemnation and have forced governments to place Security Focus naval assets in high threat areas. Although this is a strong deterrent, not all routes and vessels can be escorted, leaving vulnerabilities and opportunities for pirates. Consequently, merchant ship owners have been forced to provide their own security measures to protect their crew and vessels creating a strong growth in the maritime security market. A range of anti piracy solutions is available in the market. The most controversial strategy has been the increase in the use of companies providing armed guards on board commercial vessels. It has raised a number of legal implications, including the use of armed force by non military personnel in international waters. Countries have taken different approaches regarding this issue. Unlike most other EU countries, the Netherlands, for example, have refused any armed guards on a vessel registered with their flag. This is further complicated when armed guards engage vessels that have no illicit intent. There have been a number of reports of innocent fisherman being targeted by such security personnel. In addition, concerns over the escalation of weaponry have been raised. As merchants procure heavily armed guards to defend their vessels, so the pirate militants will increase their already substantial firepower, resulting in growing violent encounters. At present the method seems successful as there have been no successful attacks on vessels that have an armed guard provision. But this is an expensive approach and is not a long term solution to the piracy problem. Non - lethal weapons are an interesting prospect, with a range of solutions that can help deter and protect the ship. However, they can also not guarantee 100% protection. © 2012 Frost & Sullivan
  4. 4. Border and Maritime Security: Global Security Challenges to Shift Border and Maritime Border Security While piracy remains a high profile issue that must be addressed, states face greater threats along their own borders. It is easy for focus to be drawn on terrorist related incidents that create immediate public danger and attention, such as the attacks in Mumbai in 2008 which saw gunmen enter the city via a fishing boat from Pakistan. In Africa, Boko Haram militants continue to use illegal entry and exit points along the border shared by Nigeria and Cameroon helping to avoid authorities before and after an attack. Although these incidents are high impact, the physical consequences are usually short term, and while posing risk to citizen’s welfare have not yet threatened the long term security of the state. Piracy and terrorist incidents will remain in the foreseeable future, however longer-term threats are emerging and security authorities must address these issues with equal importance. Persistent and Growing Threats Serious consideration must be given to threats that are not so acute in nature or apparent to the public. Many of these do not have an easily tangible impact, but if they continue to Security Focus grow, could threaten the economic and social prosperity of the state. These can be broken down into two categories: movement of people and movement of illicit goods over both land and maritime borders. Global events continue to catalyze the drive of global movements. The rising of the Arab spring in 2011, the continued growth of India and China and the ongoing conflict in Afghanistan have all driven the global movement of people, as many have been forced to find safer areas. The UNHCR currently estimates that there were 43.7 million forcibly displaced people in 2011, the highest number in 15 years and migration rates are continuing to grow. The key challenge for border and maritime security authorities is at illegal entry points. Legal entry points such as ports and border crossings are usually well equipped with a certain level of security personnel and technology to detect and contain threats. However, it is threats that gain access to the country through restricted or unmonitored areas that create the greatest problems. Movement of people Although governments have put in place a number of methods to monitor entry and exit of countries, illegal movement of people through borders remains high. This has a number of implications. An influx of either displaced peoples following conflict or famines can put real strain on government resources. This is a global issue affecting countries on all continents. Iran and Pakistan have taken millions of Afghan refugees trying to escape the ongoing conflict at home. Movement of people in Africa remains a serious issue, as people suffering extreme famine attempt to find help or better conditions in neighbouring countries. These situations © 2012 Frost & Sullivan
  5. 5. Border and Maritime Security: Global Security Challenges to Shift Border and Maritime can put serious strain on already scarce local resources and result in lack of access of these to indigenous people. With the global population having reportedly passed its seven billionth member in early 2012 and forecast to continue growing, movement of people must be monitored by countries to alleviate overcrowding issues. Countries that are not in high risk conflict areas may not face an influx of people over a short period, but face growing illegal immigration issues. Continued growth of illegal migration can equally place strain on local government resources and if this is not monitored overcrowding will be a problem in the coming decades. This is not an immediate threat to states, but the scenario is gradually building and will become one of the greatest challenges over the next twenty years unless it is properly addressed. A further complication is the spread of disease. As people move between countries, especially if they are in poor health, the movement of illness and disease is facilitated. Recent outbreaks of Swine flu, SARS and Aviation Flu, demonstrate potential consequences. Uncontrolled movement of people can bring disease to new communities creating more challenges to containment. This issue is likely to become more prominent as pressure on resources grows. Access to natural resources will further become a major area of contention for countries. Water is Security Focus becoming a scarce resource and could lead to conflict in the future. With no access to water, people will be forced to move to areas with greater basic needs. If there are not proper border controls in place, monitoring population size as well as goods coming in and out of the country is problematic. Movement of illicit goods Movement of illicit goods across borders and via seas can both damage the economy of countries as well as pose serious threats to the population itself. Smuggling of goods across the border to avoid import or export taxes can cost local economies serious loss of revenues. It is estimated that this kind of activity costs the EU economy around €285 billion every year, amounting to nearly 2% of the EU’s total GDP. The movement of illegal narcotics feeds drug abuse within countries. The 2011 United Nations on Drugs and Crime World Drugs report shows that this global problem is not being contained. South Asia, especially Afghanistan, remains the main producer of heroin, with the largest quantities flowing towards the European markets. South America is the strongest cocaine producer with the greatest quantities flowing towards North America. The continued supply bolsters drug addiction in countries and puts strain on government and health resources. Although governments have had little success in combating the continued drug production, they can do more to prevent less getting into their home markets. Of course there are a range of methods to identify illicit movement at authorised crossings; however, more must be done to stop narcotics entering through illegal entry routes. Finally the movement of weaponry and dangerous materials is of real concern for governments. Of primary concern is them falling in the hands of those planning to carry out © 2012 Frost & Sullivan
  6. 6. Border and Maritime Security: Global Security Challenges to Shift Border and Maritime terrorist attack. Porous borders allow the facilitation of terrorist organisation growth and movement. If those with criminal intent manage to get weaponry that they intend to use into a country, containing the situation becomes much more difficult for security organisations. Mexico and Colombia provide strong case studies, where escalation of weaponry in the country has facilitated an increase in organised crime which security authorities now find difficult to control. Implications Although governments are aware of these issues, focus has shifted to new threats, allowing these to persist and grow in a more subtle fashion. So, the question that must be raised is what is the solution? Of course, this will differ from country to country depending on their circumstance, threat level and global positioning. It is clear that simply building large scale fences with barbed wire around national borders will not prevent movement of people or goods. More governments are now looking to technology for solutions as defence and security organisations develop more advanced and capable equipment. However, border and maritime security authorities strive for a total situational awareness solution that can identify real time threats and potential security incidents. To achieve this, Security Focus a fully integrated system involving ISR, C2, communications and perimeter security is required. Currently, most governments have been sceptical to invest in a full solution, especially in the border domain, resulting in a fragmented global infrastructure. A bottom up approach however must be the best strategy to provide comprehensive security coverage. Tier 1 players in the market who are capable of supplying an end to end solution are of course promoting this concept, not only to provide very lucrative contracts (such as those in Saudi Arabia and planned for Brazil) but also because it gives the most comprehensive situational awareness on the ground. The investment is large, especially in times when governments are facing global economic uncertainty, but the returns of a more secure state must be worth the instigation of such systems. While the approach of buying parts of equipment that can cover certain areas is a more appealing option to governments at present, this will likely incur greater expense in the long run. Procuring parts of systems leave huge gaps in border and maritime defence that can be easily exploited. Furthermore, it will require high integration costs and will not benefit from economies of scale. Unlike airports and ports that are able to operate more commercial models, outsourcing border and maritime security is more problematic. Some countries, however, are now turning to this model. Nigeria is a good example, having signed a ten year contract in 2012 for $103.4 million with Global West Vessel Specialist Nigeria Limited (GWVSNL) to ensure maritime security for Nigeria, although this approach has been met with strong criticism from within the country. It is likely that border and maritime security will remain under the authority of governments, but strategic partnerships with industry are vital to ensure a robust security system. © 2012 Frost & Sullivan
  7. 7. Border and Maritime Security: Global Security Challenges to Shift Border and Maritime Frost and Sullivan research indicates strong growth in the border and maritime market with expenditure forecast to increase from $29.35 Billion in 2012 to $52.67 Billion in 2021. APAC, the Middle East and North America will drive this growth as the regions continue to invest heavily in security. They will provide the greatest opportunities for industry with a . number of planned border and maritime programmes to be implemented over the next decade. Border and Maritime Security: Market Potential by Regions, 2012 Security Focus Conclusion Political pressures and difficult relationships with neighbouring countries pose challenges to deployment of technologies along borders. However technology is only half of the solution. More than other security domains this segment requires the most coop cooperation between governments. Although there are tensions between border and maritime areas, for comprehensive protection, the cooperation of states that share common borders is essential. As with many other areas of security there remains a wide gap between nations who have been able to invest in stronger security measures and those who have struggled to allocate adequate resources to address issues. Governments must realise that problems stem from easily accessible or poorly monitored borders. Not fully addressing this long ot standing issue will only escalate the threat over the next twenty years. About Frost & Sullivan Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best-in-class positions in growth, innovation and leadership. The class companys Growth Partnership Service provides the CEO and the CEOs Growth Team with disciplined research and best-practice models to drive the generation, e best practice evaluation, and implementation of powerful growth strategies. Frost & Sullivan leverages 50 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from more than 40 offices on six continents. To join o Growth our Partnership, please visit