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Defense contest over major gulf arms buys

Nov. 20, 2012 at 1:37 PM   |   Comments

ABU DHABI, United Arab Emirates, Nov. 20 (UPI) -- Amid worsening turmoil in the Middle East, the Arab monarchies of the Persian Gulf are planning another surge of major arms deals with the United States and Europe.

This is setting off intense competition between Western defense companies, heavily backed by their governments, which are scrambling for multibillion-dollar export orders because of deep defense spending cuts.

A visit to the gulf earlier this month by British Prime Minister David Cameron, accompanied by Defense Secretary Philip Hammond and a high-powered defense delegation, in a drive to get Saudi Arabia, the United Arab Emirates to buy up to 100 Eurofighter Typhoon strike jets -- worth around $6.5 billion -- underlined how heavily Western leaders are investing in gulf arms sales.

Britain faces heavy competition from France, which is pressing the Emirates, which wants 60 advanced aircraft to replace its aging French Mirage-2000s, to buy Dassault Aviation's multirole Rafale strike jet.

It's cheaper than Typhoon, which is built by the European consortium EADS and marketed by BAE, Britain's leading defense conglomerate.

The Saudis have bought 72 Eurofighters and the British want them to buy another 72.

The scramble for new contracts in the gulf is to a large extent attributed to growing tensions in the region between Iran and the Americans, along with their longtime allies on the western shore of the strategic waterway, a key oil artery.

"There's a very legitimate concern about Iran being a revolutionary country," observed William Cohen, a former Republican senator who served as defense secretary in the 1990s under President Bill Clinton and is now a business consultant.

"Beyond Iran, you have terrorism, cyberattack threats. You see the implications of the Arab Spring. Every country wants to make sure it's protected against that."

Cohen noted that major U.S. defense companies, information technology firms and others "have an enormous opportunity" in the gulf now.

"The planned gulf purchases are likely to add to concerns by anti-conflict campaigners about the militarization of the Middle East, as war deepens in Syria, where Russia sold $1 billion worth of weapons last year to the regime and Qatari and Saudi Arabian arms are being channeled to the rebels," the Financial Times commented.

The new arms drive follows heavy buying by the Gulf Arab states on the international arms market in 2011, the U.S. Congressional Research Service reported recently.

U.S. sales alone to these, and other states, more than doubled from $32.7 billion in 2010 to $71.5 billion last year, with Saudi Arabia heading the list with deals worth $33.7 billion.

The kingdom and the United Arab Emirates, the major military powers within the six-member Gulf Cooperation Council alliance, are heavily involved in procuring U.S. and European weapons systems.

That's part of a U.S. $67 billion arms package designed to build up Arab forces in the gulf to counter Iran's ballistic missile buildup and its contentious nuclear program.

The Pentagon announced Nov. 6 that the Emirates, a major oil producer, and gas-rich Qatar, both key U.S. military allies, have asked to buy two units of Lockheed Martin's Terminal High-Altitude Area Defense anti-missile system. That includes 12 launchers, 150 interceptor missiles, radars, training and support for an estimated $6.5 billion.

The Emirates, which in December 2011 ordered two THAAD batteries with 96 interceptors for $4.3 billion, want an additional 48 interceptors, nine launchers and other materiel worth $1.135 billion, the Pentagon says.

Raytheon's another prime contractor on the THAAD program, designed to shoot down a wide range of missiles, up to intermediate-range weapons such as Iran's Shehab-3, currently operational, and the more advanced Sejjil-3 now under development.

On Nov. 10, the Defense Department announced the proposed sale of 20 Lockheed Martin C-130J-30 transport aircraft and five Lockheed KC-130J aerial tankers, along with training and logistical support. The deal's worth $6.7 billion.

Apart from Lockheed Martin of Bethesda, Md., prime contractors are General Electric Aviation Systems of Sterling, Va., and Rolls Royce Corp. of Indianapolis.

Congress has 30 days to consider these deal but they're pretty much guaranteed to secure approval since these days no-one passes on arms contracts of such magnitude because it could mean hefty job losses if it was rejected.

Kuwait signed up to buy 60 Raytheon Patriot PAC-3 air-defense missiles for $4.3 billion in July.

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