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Research Report

Defence industries in Arab states:: players and strategies

Copyright Date: Mar. 1, 2017
Pages: 87
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Table of Contents

  1. (pp. 5-6)

    All indexes and figures on current global defence spending highlight that a power shift is occurring: expenditure on armaments is both growing worldwide and becoming more visible in countries and regions that were previously less significant in this domain. This rebalancing is mostly happening to the detriment of the West and, in particular, of EU and European NATO members. Moreover, some of the new big spenders on defence worldwide are ever less reliant on buying equipment off the shelf – mostly from Western suppliers – and keener on developing some sort of ‘home-grown’ armaments industry, often starting from niche capabilities...

  2. (pp. 9-12)

    Conflicts in the Arab world share many features: they occur repeatedly, they take place within the region – and they are fought with weapons purchased elsewhere.

    Not only have Arab states traditionally relied on imports to meet their military needs, they generally spent high amounts. In the 1970s and 1980s, nearly half of the global arms trade (worth $165.4 billion) went to the region; whereas the world arms trade doubled in the 1970s, it quadrupled in the Middle East. In 1982, the countries with the highest military spending per capita were all Arab.¹ Three decades on, this trend has not...

  3. (pp. 13-24)

    The first signs of ambition in the Arab world with regard to national defence production stared to appear in the 1950s: recovering from the defeat against Israel and the crucial tactical insights gleaned from the war (e.g. gaps in vital arms, such as rifles, and ammunition as well as dependence on foreign suppliers) spurred the creation of a first series of military factories in Egypt and even a dedicated ministry. But within only a decade, three quarters of these factories faced over-capacity, and the ministry of defence production was closed down. This was only the first in a series of...

  4. (pp. 25-30)

    Arab states’ attitude to defence spending changed significantly at the end of the Cold War. While the early 1990s spelt détente for the rest of the world (and even for Israel, which signed the Oslo Accords in 1992 and a peace treaty with Jordan two years later) leading to disarmament and low defence spending, this was not the case for the rest of the MENA region. In constant 2014 prices, SIPRI data shows that, while Western Europe decreased military expenditures by 5% and the US by 15%, North African and Middle Eastern states compensated for this by increasing their outlays...

  5. (pp. 31-38)

    Much of the momentum that Egypt built up in the second half of the twentieth century in its drive towards military self-sufficiency has since been lost. Despite its status as the longest-standing arms manufacturer of the Arab states, Egypt maintains low rates of indigenous manufacturing and has plateaued as a ‘third-tier’ arms producer. With low-tech production capabilities and limited demands for technology transfers, Egypt’s economic motivations to maintain its industrial base outweigh its strategic ambitions. Egypt fulfils its strategic needs primarily through diversifying its sources of arms imports. Its factories therefore exist to support its arms imports rather than to...

  6. (pp. 39-46)

    The main driver of Saudi defence industrialisation has been the deepening of ties with and concomitant frustration with the US. In the early 1980s, Saudi programmes sought to become more independent from suppliers with strong connections to Israel. The US has previously reassured Israel that it will be the only operator of the F-35 fifth generation fighter jet in the Gulf, regardless of interest from GCC countries. The Obama administration in particular irked the Kingdom, notably including the refusal in 2013 to export armed Predator UAS. This has translated into a renewed determination to bolster the domestic DTIB. As recently...

  7. (pp. 47-62)

    The Emirati DTIB is significantly younger than its Egyptian and Saudi counterparts. State-owned firms in the UAE only began dabbling in defence services and industry related to maritime security 20 years ago. Yet today, the UAE appears the most promising of the Arab candidates seeking to gain emerging arms producer status. Indeed the UAE has also been more explicit about becoming a net arms exporter, already differentiating its motivations from the other regional players.

    In part, this has to do with the fact that the Emirati economy is in a better position to provide the necessary ingredients for a knowledge-based...

  8. (pp. 63-68)

    Apart from Saudi Arabia and the UAE, smaller GCC economies have also expressed interest in developing their own DTIBs. Bahrain and Oman have offset bureaus that conduct military deals but are relatively inactive, while a more concerted effort in this direction may be observed in Kuwait and Qatar. Their prospects are limited, however their intentions are interesting in that they: (i) follow similar patterns seen in the countries above; (ii) could become export markets and more equal-footed partners with the UAE in the future; and (iii) would need to be considered if GCC defence cooperation (or at least stronger coordination)...

  9. (pp. 69-72)

    The armaments industries of Arab states share one common aspect: they evolve within a very specific strategic landscape determined very much by war and conflict. Whereas European arms industries are less concerned with European conflict theatres, Arab arms industries are a reflection of how their respective decision-makers perceive challenges emanating from their immediate political, and ultimately military, environment. This applies particularly to the Gulf States but to a lesser extent also to Egypt.

    In the Gulf, several developments have led to the insight that greater independence from outside security providers is paramount for national security: the American withdrawal from Iraq...