Defence firms eye billion dollar Mid-east deals

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Global arms manufacturers will vie for deals worth billions of dollars at the Middle East’s largest military expo as unrest sweeping across the region pushes countries to beef up security.

The International Defence Exhibition & Conference opens on Sunday in the capital of the United Arab Emirates with some 1 060 companies participating including Lockheed Martin Corp, Boeing Co, Dassault Aviation, and Italy’s Finmeccanica.

At the last IDEX in 2009 more than 900 firms showcased their wares when the UAE, the biggest Gulf Arab spender there, announced deals worth 18.5 billion dirhams (US$5 billion), Reuters reports.

The UAE is in the final stages of negotiating arms deals worth billions of dollars, Major General Obaid al Ketbi, spokesman for IDEX, told Reuters.
“Most of the large projects are in the final tuning stage. We hope the amount will be within the range of last time’s deals,” he said.

Heightened security concerns due to turmoil in the Arab world and escalating tensions between the West and Iran could see wealthy oil-producing Gulf states ramp up their defence spending.

Crowds have taken to the streets in Libya, Yemen, Iran and Bahrain in recent days, inspired by popular revolts in Tunisia and Egypt that saw veteran leaders of both countries driven out of office.
“Given the current environment, spending levels will remain or may go higher. And a lot of technology is expensive,” said Theodore Karasik, director, R&D at the Institute of Near East & Gulf Military Analysis, a Dubai-based think-tank.

Arab countries and Israel have been big buyers of US warplanes, missile defense equipment and other weapons in recent years. The U.S. government in October announced an arms sale with Saudi Arabia worth as much as $60 billion.

The UAE has been in negotiations since 2008 with France’s Dassault to replace its existing Mirage-2000 fleet with Rafale warplanes.

The negotiations faltered last year when the UAE requested technical information on Boeing’s F/A-18E/F Super Hornet. But French and UAE sources have suggested that the Rafale negotiations were back on track.

The world’s third largest oil exporter has also been negotiating to buy the Terminal High Altitude Area Defense, or THAAD, an advanced missile defence system developed by Lockheed Martin.

The two deals could be worth as much as US$17 billion.

Figures released by the U.S. Congress last year showed that the six Gulf Arab states signed arms deals worth about US$66.9 billion from 2002 to 2009.

Oil revenues are helping Gulf countries to increase their defence spending with oil prices rising towards US$103 a barrel on Friday having closed at its highest level since September 2008 on Wednesday.

Defence experts say acquisitions were largely aimed at preventing a potential attack from Iran, which is at odds with its Arab neighbours and the West over its nuclear programme.



But Ketbi said UAE acquisitions were not aimed at Iran.
“Every state has an armaments plan and we have our own. It’s not targeted against a particular state.”