Space Policies, Issues and Trends in 2009/2010 Report 23 June 2010 Spyros Pagkratis Short title: ESPI Report 23 ISSN: 2076-6688 Published in June 2010 Price: €11 Editor and publisher: European Space Policy Institute, ESPI Schwarzenbergplatz 6 • 1030 Vienna • Austria http://www.espi.or.at Tel. +43 1 7181118-0; Fax -99 Rights reserved – No part of this report may be reproduced or transmitted in any form or for any purpose with- out permission from ESPI. Citations and extracts to be published by other means are subject to mentioning “Source: ESPI Report 23; June 2010. All rights reserved” and sample transmission to ESPI before publishing. Design: Panthera.cc ESPI Report 23 2 June 2010 Space Policies, Issues and Trends in 2009/2010 Table of Contents 1. Global Political and Economic Trends 5 1.1 Global Economic Outlook 5 1.2 Political Developments 8 1.2.1 Security 8 1.2.2 Environment 9 1.2.3 Energy 11 1.2.4 Resources 13 1.2.5 Knowledge 14 1.2.6 Mobility 14 1.3 The Financial Crisis and Its Consequences for the Space Sector 16 2. Global Space Sector Size and Developments 18 2.1 Global Space Budgets and Revenues 18 2.2 Overview of Institutional Space Budgets 18 2.3 Overview of Commercial Space Markets 22 2.3.1 Satellite Services 22 2.3.2 Satellite Manufacturing 26 2.3.3 Launch Sector 26 2.3.4 Ground Equipment 27 2.3.5 Insurance Sector 27 3. Space Policies and Strategies around the World 29 3.1 European Union 29 3.2 European Space Agency 33 3.3 EUMETSAT 35 3.4 National Governments 36 3.4.1 France 36 3.4.2 Germany 37 3.4.3 Italy 39 3.4.4 United Kingdom 40 3.5 United States of America 41 3.5.1 National Aeronautics and Space Administration (NASA) 42 3.5.2 National Oceanic and Atmospheric Administration (NOAA) 48 3.6 Russia 49 3.7 Japan 51 3.8 China 52 3.9 India 52 3.10 Emerging Space Actors 53 3.10.1 Africa 53 3.10.2 Southeast Asia 53 3.10.3 Middle East 54 3.10.4 Latin America 55 3.11 International Sectoral Comparison 55 3.11.1 Launch Sector 55 3.11.2 Missions Launched 58 3.11.3 Overall Assessment 59 ESPI Report 23 3 June 2010 4. European Institutional Market 61 4.1 European Institutional Features 61 4.2 Civilian Space Expenditure 62 4.3. European Space Agency (ESA) 62 4.4 EUMETSAT 64 4.5 National Agencies 66 4.5.1 France 66 4.5.2 Germany 67 4.5.3 Italy 67 4.6 European Union 67 4.7 Security-Related Space Expenditures 69 5. Space Industry Evolutions 71 5.1 Europe 71 5.2 United States 74 5.3 Russia 78 5.4 Japan 79 5.5 China 80 5.6 India 80 5.7 Canada 82 5.8 Brazil 83 5.9 Transatlantic Industrial Comparison 83 5.9.1 State of the European Space Industry 83 5.9.2 State of the United States’ Space Industry 85 5.10 Sectoral Overview 87 5.10.1 Launch Sector 87 5.10.2 Satellite Manufacturing Sector 93 6. The Defence Perspective 98 6.1 Recent Trends in Military Expenditure 98 6.2 Europe 98 6.2.1 National Military Space Programmes 98 6.2.2 European Union 100 6.2.3 ESA 101 6.3 The United States 101 6.4 Russia 107 6.5 Japan 109 6.6 China 110 6.7 India 110 7. The Specific Role of Institutions 111 7.1 Europe 111 7.2 United Nations (UN) Institutions 112 7.2.1 United Nations General Assembly (UNGA) 112 7.2.2 UNGA Committees 113 7.2.3 Other UN Bodies Monitoring Space Activities 113 7.3 Non-Governmental Organisations (NGOs) 114 Acronyms 116 Acknowledgements 122 ESPI Report 23 4 June 2010 Space Policies, Issues and Trends in 2009/2010 1. Global Political and Economic Trends In 2009 the global financial crisis entered a lasting post-crisis characteristics such as low new stage, in which the adverse effects of inflation, a drop in private consumption and last year’s credit crisis started to weigh on investment, and a steep rise in unemploy- worldwide economic activity. The year was ment which may become structural. Markets marked by a fall in global industrial produc- and financial institutions have been stabilising tion and trade activity and a consequent and will continue to do so in 2010. Neverthe- steep rise in unemployment. However, the less, market financial stress and risk aversion first signs of improvement also made their will remain elevated for the foreseeable fu- appearance, as bank earnings and capital ture, which will put considerable stress on levels began to rise again and GDP growth households and medium-size enterprises, and started to return, although it is not expected will consequently continue to increase bank to reach pre-crisis levels for several years. In loan delinquencies. On the upside, interna- 2010 this trend is expected to continue, but tional capital flows are on the way to recover- economic recovery will be slow and precari- ing3. ous. This year’s economic policies are ex- In the financial sector the year has been pected to focus on continuing the reform of marked by a slow return of risk appetite that the financial and banking system, rebalancing has led to considerable currency fluctuations, the patterns of global trade, boosting private with the Euro strengthening its position consumption, enhancing international coop- against both the Dollar and the Yen on the eration and restraining unemployment rates second half of 2009, before falling again in before they change from cyclical to struc- 2010. Bank loans to the private sector how- tural. The pace of economic recovery is ex- ever are still stagnating, especially in ad- pected to be slow and very different from vanced economies. In fact, credit risks re- country to country. Emerging economies will main elevated and the sustainability of bank exit the crisis at a quicker pace than ad- earnings is still precarious at best: in October vanced ones, but the whole process will re- 2009 global bank write-downs were esti- main fragile and extremely vulnerable to mated to reach $2.8 trillion and more than adverse events such as rising commodity half of this amount has not yet been recog- prices, geopolitical events, or a resurge of nised. The bulk of these losses are attributed protectionism. to U.S., UK and Euro zone banks. In addition to this, a further $1.5 trillion wall of maturing dept will have to be met by 20124. By com- 1.1 Global Economic Outlook parison to European banks, U.S. banks have deleveraged faster and this may help credit In 2009 the global economy appears to be conditions in that country to ease sooner. expanding again and this trend is expected to Nonetheless, financing conditions for con- continue in 2010. At present, Asian econo- sumers and medium-size companies in de- mies seem to be the driving force behind veloped countries are expected to remain global economic recovery, whereas stabilisa- difficult. tion and modest improvement is the case In the second half of 2009 global markets elsewhere. Apart from Asia however, recov- continued to stabilise and this is expected to ery is projected to be weak and slow by his- continue in 2010. Even though investment torical standards and GDP growth will remain will not attain pre-crisis levels in the foresee- well below pre-crisis levels until 2014 at able future, a certain risk appetite has re- least1. For 2010 global activity is expected to turned. For the moment, however, market expand by approximately 3%, after a 1% recovery seems fragile, a number of financial contraction in 2009. Growth in emerging stress indicators remain high and the fear of economies will be significantly higher2. This a possible reversal weighs heavily on inves- sluggish recovery will be marked by long tors. In the context of the credit conditions described above, global markets are thought 1 International Monetary Fund. World Economic Outlook: Sustaining the Recovery. Washington D.C.: IMF, October 2009: 1. 3 Ibid: 2–4. 2 Ibid: xiv–xv+29. 4 Ibid: 5–6. ESPI Report 23 5 June 2010 to remain extremely sensitive to external choosing the right timing, and respecting as factors such as geopolitical events or real- much as possible macroeconomic budgetary estate-related shocks. Real-estate in particu- and fiscal constraints. Indeed in 2009 and the lar will continue to put pressure on bank bal- first half of 2010, public support for the re- ance sheets, whereas subsequent low con- capitalisation of financial institutions dimin- struction activity is expected to create addi- ished considerably, especially in advanced tional risks for the financial sector in general5. economies. Public opinion is becoming more and more sceptical on measures that are On a global scale inflation moderated to 1% perceived as generous government bailouts in mid 2009 down from 6% a year earlier and for firms that were largely responsible for the is expected to remain low in 2010 as well. credit crisis in the first place9. This develop- Inflation rates in emerging economies varied ment, in conjunction with increasing unem- considerably from region to region, dropping ployment, will make governments reluctant in Asian countries and rising in East European to increase recapitalisation measures in the ones. Advanced economies are still facing face of mounting political pressure to do the mild deflation risks as the pace of economic opposite.