Mena region countries will be shopping this week for military hardware at the Middle East’s biggest defence exhibition, which takes place against a backdrop of falling oil revenues and the threats posed by ISIL militants and the Houthi movement in Yemen.
Everything from drones and fighter jets to guided missile systems will be on display at the International Defence Exhibition and Conference (Idex) in the capital from today, to counter such threats.
A total of 1,154 international and local exhibitors are at Idex this year, up from 1,112 in 2013, organisers said.
Forty-two countries have pavilions.
At the previous biennial event, about 80,000 visitors flocked to the arms expo.
Ivor Ichikowitz, the founder and executive chairman of Paramount Group, which is participating at Idex, said: “Africa and the Middle East are facing very similar threats from the likes of ISIL and Boko Haram to Al Shabaab. In the face of this growing global terrorism, defence budgets are being carefully scrutinised.”
Arabian Gulf countries, such as Saudi Arabia and UAE, that have amassed enough financial reserves will be able to ride out the tide of ebbing oil prices, according to analysts.
“With these reserves they will try to go through the storm,” said Pieter Wezeman, the senior researcher at the Stockholm International Peace Research Institute (Sipri). “They don’t have to start cutting defence budgets immediately. They can wait and see what happens in the oil price in the next few years.”
It comes as no surprise then that defence spending in the Mena region is expected to touch US$150 billion this year from $148bn in 2014 and $136bn in 2013, according to defence consultancy IHS Jane’s. Such spending has grown by an average of 10 per cent a year between 2012 and last year, according to IHS Jane’s.
According to Mr Ichikowitz, the defence budgets of GCC countries now accounts for about 83 per cent of overall military spending in the Middle East.
Saudi Arabia, which was among the world’s top four military spenders in 2013 with $67bn, according to Sipri, will remain so despite the oil price slump.
Saudi military spending in 2013 was equal to 9.3 per cent of its GDP, while the UAE ranked 15th globally, with $19bn worth of military spending.
“The Saudi government seems content with riding out a period of lower energy revenues and it certainly has the reserves to be able to do that,” said Craig Caffrey, a senior analyst for defence budgets at IHS Jane’s.
“Saudi Arabia has only reduced defence and security spending once in the past 15 years, so recent history certainly suggests that the budget is resilient to short term oil price shocks.”
The US is seeking to allocate $8.8bn of its 2016 budget to fight ISIL and help Iraq, while Iraq is expected to spend 20 per cent of its 2015 budget on defence.
“In Iraq, you see an increased requirement for both conventional and counter-insurgency systems and equipment, to include tactical gear and small arms, armoured and combat vehicles, and various ground support platforms – such as reconnaissance and attack aircraft,” said Aleksandar Jovovic, principal at the aerospace and defence consultancy Avascent.
“Elsewhere, for instance in the Emirati case, the primary tools are higher-end systems, so the UAE is likely to spend more on servicing and spares for their F-16s, as well as on precision-guided ammunition and other ordnance.”
Iraq, which had the biggest regional increase in military spending in 2013, according to Sipri, will have a hard time managing its resources to fight ISIL as it lacks enough financial cushion, unlike Saudi Arabia and the UAE, analysts said.
“The reduced income will have no impact on the mission to fight ISIL,” said Mustafa Alani, the senior adviser for the Geneva-based Gulf Research Center. “Money will be spent in this field without hesitation because it is a real threat and a strategic threat.”
The threat in the region from Iran has receded with the diplomatic push to strike a deal on a nuclear disarmament programme by June 30.
Meanwhile, William Cohen, the chairman and chief executive of Cohen Group and a former US defence secretary, said that Arabian Gulf states are now playing a more decisive and role in the region’s security.
The involvement of Saudi Arabia and the UAE joining the US and its allies in bombing ISIL positions in Syria is a case in point. “I think change comes about through adversary,” Mr Cohen said.
“I think this will push Gulf states to find ways to share more technology, techniques, and tactics and become a more effective force operating on a consensual basis.”
dalsaadi@thenational.ae
selgazzar@thenational.ae
Follow The National's Business section on Twitter
