Keeping the peace key to keeping a thriving economy

Driving down Khaleej Al Arabi Street in Abu Dhabi this week was like driving through the set of the next Die Hard movie.

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Driving down Khaleej Al Arabi Street in Abu Dhabi this week was like driving through the set of the next Die Hard movie.

Grey helicopter gunships buzzed the highway in pairs. Naval patrol vessels, tooled up and kitted out with diamond-shaped Radar towers were being tied up at the water's edge by teams of smart sailors in UAE naval uniform just feet from the hard shoulder.

The bleacher-lined arena in front of the Abu Dhabi National Exhibition Centre had its perimeter draped with cargo netting and camouflage scrim so that it looked like an impromptu black ops base set up by the roadside.

A few miles further on, towards Zayed Military City, and groups of soldiers in desert fatigues ran in platoon formation across the sands as camouflaged trucks and armoured personnel vehicles whizzed about. Above them, Air Force jets soared while a cargo plane prepared to land at Abu Dhabi airport.

There was nothing to worry about, of course. The extensive mobilisation of all three branches of the UAE Armed Forces at once did not mean an invasion force was headed up to Bab Al Bahr. No, this bristling display of military prowess was all in preparation for Idex, the much-anticipated International Defence Exhibition, taking place next week in Abu Dhabi and centred around the National Exhibition Centre.

And if the preparations were anything to go by, it promises to be quite a show.

There will be daily "choreographed displays" taking place on the water and on a purpose-built demonstration track, with the Grand Opening Day Parade on Sunday expected to be the highlight.

But none of this pomp and circumstance would be possible, or indeed worthwhile, had the UAE's defence industry not developed so rapidly in recent years.

From humble beginnings, the offset programme transformed into the Tawazun Economic Council, which just six years ago spawned Tawazun, a corporate umbrella housing technologically advanced manufacturers and designers, each of which is partnered with at least one international defence contractor.

The Emirates has one of the highest per capita defence budgets in the world, but all this development is not just about military might. It's about a rapid evolution of an industry that involves engineering, design, manufacturing and marketing.

It is about education, training, apprenticeships, scholarships and employment.

About 60 per cent of the workforce engaged with Tawazun projects are Emirati and almost all of them are receiving world-class education and vocational training to equip them for the high-tech jobs of tomorrow.

This and the creation of a self-sufficient national defence force to protect the UAE's borders are noble and necessary causes indeed, but they are only half the story told by the companies and agencies on display at Idex.

As people of this region know too well, in the wrong hands such hardware and know-how has the opposite effect to that which the UAE is working so hard to promote.

Far from creating economic opportunity and building an economy based on high-tech innovation and manufacturing, conflict is purely a destructive force.

One need only look to our neighbours in Iraq, Syria, Libya and Afghanistan for evidence of this.

A couple of years ago I came across a study of the economic cost of conflict by Strategic Foresight Group, an Indian think tank.

The organisation produced a strikingly detailed account of conflict in the Middle East from 1991 to 2010 and concluded that the various civil campaigns had cost the countries of the region as much as US$13 trillion (Dn47.75tn) in lost economic opportunity.

It seems the bigger the economy, the more opportunity is lost during regional conflict.

On this basis, "The opportunity cost for 1991-2010 appeared largest for Saudi Arabia at $4.5tn or one third of the total opportunity loss incurred by 13 countries in the region," the report claimed.

However, compared with the size of its economy, Iraq suffered the largest loss with the Strategic Foresight calculations showing that the country's GDP could have been more than 30 times its present size had it not been for a decade of war on its soil.

China and the United States, the most successful economies on Earth, have been involved in many conflicts in the past century, but not at home.

Pearl Harbor aside, America has never fought a war on its home turf. Since the end of the Chinese civil war in 1950, China has enjoyed relative peace at home - discounting border wars with India in 1962 and Vietnam in 1979.

Not having to cope with the destruction and distraction of domestic conflict has allowed both economies to flourish almost unhindered.

There are many more human arguments in opposition to war but cold, hard economics is not so easy to ignore. Keeping the peace, it seems, is the only way to prosperity. This maxim should be remembered at Idex next week and beyond.