Bangladesh raises defence budget to $2.8 billion

Last week, the Government of Bangladesh announced that it will increase its defence budget for 2016-2017 by $2.8 billion. This is a 7% increase over the revised expenditure set for 2015-2016.

According to IHS Jane’s, the vast portion of the budget ($2.7 billion U.S.) will go into salaries, maintenance, and other operational costs. Approximately $58 million U.S. is allocated for “development” costs, which can include procurements.

Comment and Analysis

According to the Dhaka Tribune, the Bangladesh Ministry of Finance stated that the country is in talks with Russia and China for long-term and potentially larger loans, ostensibly for big-ticket items.

The Bangladesh Air Force has recently introduced the Yakovlev Yak-130 lead-in fighter trainer (LIFT). The Bangladesh Navy recently inducted two C13B corvettes, it also has two additional ships in the pipeline.

A line of credit from China could enable Bangladesh to access a range of high-tech equipment, especially in the form of fighter aircraft, armoured vehicles and other systems. The next few months will determine to what extent Bangladesh can tap into (in terms of upfront funding), and in turn, shape its medium and long-term acquisition plans.