GCC geopolitics spike military sales at IDEX
As most Gulf Cooperation Council (GCC) countries are embroiled in the almost 2-year-old war in Yemen and the perceived threat from Iran continues, the International Defence Exhibition and Conference (IDEX), one of the largest military trade shows in the Middle East, returned to the United Arab Emirates.
IDEX featured 1,235 participating companies, including some of the defence industry’s biggest names, such as Lockheed Martin, Boeing and Russia’s Rostec.
UAE officials announced more than $5.1 billion worth of arms deals for its military at the event, with Russia making the biggest mark in terms of contracts. Russian Minister of Industry and Trade Denis Manturov said at a news conference that Saudi Arabia was interested in Russian aircraft and ground weapons.
“Talks with partners from Saudi Arabia were and are being held regarding the military-technical aspect of cooperation, supplying various types of equipment, on the aviation segment, on the subject of ground [weapons],” Manturov said. “I cannot discuss more deeply but such talks are, in fact, under way.”
US-based defence analysis firm Teal Group said the Saudi defence budget for 2016 was forecast at $82 billion and is estimated to rise to $87 billion in 2020 and that United Arab Emirates’ defence spending is expected to rise from $15.1 billion to $17 billion in the same period.
Russia’s Federal Service for Military-Technical Cooperation (FSMTC) revealed that it was in negotiations with Saudi Arabia for the delivery of weapons and military hardware.
“We are conducting negotiations with the kingdom. We are ready to develop full-scale military-technical cooperation. Hopefully, the result will be positive,” FSMTC Deputy Director Alexei Frolkin told Russia’s Interfax.
Another Russian military success story has been weapons maker Kalashnikov, which has seen sales more than double in the last year. The Middle East market is considered a chief factor in the sales spike.
Regional demand for the Kalashnikov rifles, missiles, drones and military vehicles has seen the Russian firm offset losses due to US sanctions over Russian involvement in the Ukraine conflict.
Kalashnikov Chief Executive Officer (CEO) Alexey Krivoruchko, the Middle East market is Kalashnikov’s biggest, accounting for most of its exports. He told Reuters that sales doubled in 2016 because of growing demand for weapons and drones among other products.
Another huge deal signed at IDEX involved Pakistan Ordnance Factories (POF), the country’s biggest arms manufacturer. The firm plans on setting up shop in the UAE within the year to cater to what it described as the requirements for the Middle East region.
POF CEO Lieutenant-General Omar Mahmood Hayat told the Khaleej Times that the UAE had become the commercial hub of the Middle East “so it makes a lot of sense for us to establish an office within the year”. POF had its largest order from Saudi Arabia last year, a deal estimated at $100 million.
A January report by Deloitte stated that rising global tensions has led to international demand for defence and military products is increasing in the Middle East. This has resulted in increased defence spending globally, especially in the UAE, Saudi Arabia, India, South Korea, Japan, India, China and Russia. The report said many of those countries were increasing purchases of next-generation military equipment.