South Africa’s Public Enterprises Minister Lynne Brown, together with a South African delegation, will on Monday attend the International Defence Exhibition and Conference (IDEX) in Abu Dhabi.
IDEX is among the world’s leading defence exhibitions, with a total of 57 countries and 1 235 companies registered to participate. Participating companies include Boeing, Lockheed Martin, Rostec and South African state-owned arms manufacturer, Denel.
“Minister Brown will work to strengthen government-to-government partnerships, and relationships with global defence companies and stakeholders,” the Department of Public Enterprises said on Sunday.
Denel will be exhibiting its own global defence capabilities and services with a view to consolidating existing relationships and securing key new clients.
“Minister Brown will encourage international stakeholders to do business with Denel to expand the company’s order book and boost the South African defence manufacturing industry.”
Defence exports and linked services create jobs and contribute towards the filling of scarce skills in the high-tech and advanced manufacturing sectors. These skills are vital to South Africa’s global competitiveness.
The United Arab Emirates (UAE) awarded 4.5 billion dirhams ($1.2 billion) in military procurement deals on Sunday, part of a total of 20 billion dirhams worth of purchases it expects to make at IDEX fair this week, a spokesman for the expo said.
The deals awarded to local and international companies on Sunday included a 2 billion dirham award to the UAE’s NIMR Automotive, part of Tawazun Holdings, for the supply of 400 armored vehicles to the UAE Armed Forces, Rashid al Shamsi, a spokesman for IDEX said.
“We expect (to award) more than 20 billion dirhams in contracts by the end of IDEX,” he said.
Gulf Arab states are poised to continue to spend billions of dollars on defence despite low oil prices causing severe budget deficits forcing Gulf States to introduce austerity measures and cut spending.
Saudi Arabia’s total defence budget is forecast at $82 billion in 2016, steadily rising to $87 billion in 2020 while that of UAE is put at $15.1 billion in 2016 reaching $17.0 billion in 2020, according to Teal Group, a U.S-based defence analysis firm which has also forecast increased spending by Kuwait, Qatar, Oman and Bahrain.
“Defence spending is linked to national security and threat perception, not resource prices,” said Richard Aboulafia, vice president of Teal Group. Oil prices more than halved in 2016 from their peaks in 2014.
“Even if low oil prices might complicate the timing of defence deals, it really has little to do with the total medium- and long-term volume of sales,” he added.
Saudi Arabia and the UAE’s defence spend as a share of their GDP is the highest in the world, according to the Stockholm International Peace Research Institute.
That means big business for arms manufacturers at the biennial International Defence Exhibition (IDEX).
Big contracts at stake include the UAE’s requirements for up to 60 fighter jets. Talks have been ongoing with France’s Dassault Aviation and Britain’s BAE Systems.
Saudi Arabia is in the middle of its Eurofighter and F-15 acquisition programs, but they are due to be completed by 2019, after which the country will need more fighters to meet its ambitious force structure goals.Kuwait has requested 28 Boeing F/A-18 E/F Super Hornets, with an option for a total of 40 aircraft while Bahrain has expressed interest in the Lockheed Martin F-16.
Aside from fighter jets, countries in the region are looking to upgrade missile systems and to buy helicopters, tanks, drones, and other hardware to strengthen internal and external security.
The UAE will announce deals at IDEX 2017, the only time such contracts are awarded officially. At the 2015 IDEX, it announced deals worth $5 billion, up 30 percent over 2013.
“High or low oil prices, defence and security are irreplaceable, we cannot compromise,” a senior UAE military official told Reuters.