The Defence Industrial and Technological Base of the Gulf countries

Introduction

Over the past decade, 7 of the 10 countries with the highest share of military spending in the world are in the Middle East: Oman (12% of GDP), Saudi Arabia (10% of GDPThe 15 countries with the highest military spending allocate on average 4.2% of their GDP.), Kuwait (5.8% of GDP), Jordan (4.8% of GDP), Israel (4.8% of GDP), Lebanon (4.5% of GDP) and Bahrain (4.1% of GDP).For the United Arab Emirates, there are no data after 2014. However, the country allocated on average 4.8% of its GDP between 2005 and 2014, according to World Bank data.

The Gulf's largest economic power, Saudi Arabia (GDP $796 billionFrench Treasury Directorate General, "Letter of the Arabic Peninsula n°3" January 2019, p. 15 https://www.tresor.economie.gouv.fr/Articles/a58ebd9c-45dc-4cce-a38e-8e…), is the largest defence investor (3^rd in the world after the United States and China) and the largest arms importer in the Middle East. Since the arrival of Mohammed Ben Salman in June 2017, military expenses have increased again, reaching $69.4 billionSIPRI Military Expenditures Database, p. 22.           

https://www.sipri.org/sites/default/files/1_Data%20for%20all%20countrie… ($76.7 billion according to Military Balance(2018) Chapter Ten: Country comparisons and defence date, The Military Balance, 118:1, 499-508.).

The Gulf's second largest economy, the United Arab Emirates (UAE) (GDP of $456 billionFrench Treasury Directorate General, "Letter of the Arabic Peninsula n°3", January 2019, op. cit.), is also ranked second in terms of military spending in the Middle East. In 2014Latest data available., it spent $24.4 billion.SIPRI Military Expenditures Database, op. cit. p. 21.

Although all the Arab Gulf countries (Iran is not mentioned in this note) spend large sums of money on their defenceOn average $130 billion per year for the Gulf Cooperation Council countries., only two countries have decided to take the plunge into a logic of technology transfer via financial or non-financial compensation (offsets). For Saudi Arabia and the UAE, the ambition to create a modern military industry that can compete in the international defence market is emerging as a strategic priority for the 21st century. It highlights a range of national and international interests.

These two States wish to develop their military defence industries with the rather traditional aim of:

• respond to threats against their national security;
• reduce their dependence on the powers that dominate the international defence market (Saudi Arabia is the second largest arms importer in the world, after India, accounting for 7% of the world's $46 billion in arms imports, while the UAE ranks 4th, accounting for 4.6% of global imports);
• diversify their economies;
• consolidate their influence on the regional scene through the prestige resulting from the creation of a Defence industrial and technological base (DITB) and increase their military credibility;
• amplify their diplomatic power and achieve greater autonomy.

The other countries either do not have the human and technical resources to establish an autonomous DITB, despite their financial means (Qatar, Kuwait, Oman), or their autonomous political capacity (Bahrain).

But the financial and economic dimension is not the only vector that pushes the main Gulf States to undertake the establishment of a DITB. They are increasingly suspicious of the reliability of the United States as the sole guarantor of their security. The country’s behaviour during the "Arab springs" and the declarations of the American presidents on the "strategic pivot" towards Asia-Pacific led them to an accelerated reflection towards the search for an empowerment of the means of defence.See Emma Soubrier, chapter "The defence economy of the Gulf countries, between maintaining the status quo and the desire to assert" in Aude-Emmanuelle Fleurant (dir.), "Quelles stratégies face aux mutations de l'économie de défense mondiale? "IRSEM Studies No. 38, p. 20-27. 

https://www.researchgate.net/profile/Emma_Soubrier/publication/277863423_The_defense_economy_of_Gulf_countries_between_maintaining_the_status_quo_and_volunteering_of%27affirmation/links/5575720c08ae753637500803/The_defense_economy_of_the_countries_of_Gulfe-entre-maintien-du-statu-quo-et-volonte-daffirmation.pdf See also Fatiha Dazi-Héni, "Le Conseil de coopération du Golfe : une coopération de sécurité et de défense renforcée?", Sce-Po-CERI, note September 2011, p. 4. https://www.sciencespo.fr/ceri/sites/sciencespo.fr.ceri/files/art_fdh.p…