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Emirates builds its own defense industry

March 18, 2013 at 3:06 PM   |   Comments

ABU DHABI, United Arab Emirates, March 18 (UPI) -- The United Arab Emirates, increasingly a major military power in the Persian Gulf, is stepping up efforts to develop its own defense industry.

In large part, it's doing this by making Western defense companies set up high-tech projects in the federation as a condition of lucrative arms contracts to diversify its economy from a dependence on oil and gas exports.

"It's a desire by the Emirates to become more self-sufficient," said Theodore Karasik, director of research at Institute for Near East and Gulf Military Analysis, a security consultancy in Dubai.

"In the last decade, the UAE has been the leader of this type of activity in the Gulf Security Council," the Arab regional alliance that also comprises Saudi Arabia, Kuwait, Qatar, Oman and Bahrain.

"It's the intention of the rest of the GCC countries to catch up," Karasik said.

That may well be but the Emirates is by far the most advanced in establishing its own defense industry, even more so than Saudi Arabia, the most powerful of the gulf monarchies, on the back of the billions of dollars they have spent on buying Western weapons systems.

A sizable proportion of the so-called offset defense manufacturing projects established in the Abu Dhabi and Dubai, respectively the economic and financial powerhouses of the Emirates, stem from major defense and aviation exhibitions they stage annually.

The 11th biennial International Defense Exposition, known as IDEX, in Abu Dhabi in February produced contracts worth $20 billion.

The Emirates' effort to secure offset deals has been boosted by the focus of Western defense contractors on foreign sales to compensate for stringent cuts in domestic defense spending by Western governments.

"A trend evident at IDEX is the need to establish full joint-venture relationships with local countries, particularly those associated with local governments and sovereign wealth funds," Oxford Analytica observed.

"At its root, the move toward joint venturing is driven by regional governments seeking organic defense capabilities, as well as questions by regional leaders about how long Washington will remain fully engaged in the region."

The Emirates, the world's fourth largest arms importer and riding on the back of high oil and gas revenues, is expected to spend nearly $13 billion on defense over the next three years compared to $9.3 billion in 2011.

The federation has several joint venture deals with global defense giants such as Lockheed Martin and the Boeing Co. of the United States.

A couple of months ago, the Tawazun defense company, owned by the Abu Dhabi government and a creation of the military offset program, announced a deal with Sweden's Saab to build advanced radar systems in the Emirates.

On Feb. 21, the last day of this year's IDEX, the Emirates military announced it would buy 1,000 of Tawazun's high mobility Nimr armored tactical vehicles designed for desert operations.

The Nimr is the first piece of military hardware system built entirely in the Emirates.

Abu Dhabi Ship Building, arguably the most advanced defense contractor in the GCC, has built two 420-ton landing craft for the Bahrain navy at the company's $30 million headquarters in the Mussafah industrial zone.

Along with Mubadala, established in 2002 as Abu Dhabi's investment vehicle in sectors as diverse as aerospace, energy, infrastructure and services, ADSB is in the forefront of building up an indigenous defense sector.

It was established in 1995 as a joint venture between Newport News Shipbuilding of Virginia and the UAE Offset Group, now owned by the Abu Dhabi government.

Its most important contract, for five of the six planned Baynunah class corvettes for the emirates' navy with ADSB's strategic partner, Constructions Mecaniques de Normandie of Cherbourg, France, is nearing completion.

Project Baynunah, worth $1 billion, is the Emirates navy's flagship naval procurement program, and points to the federation becoming the first Arab state to build its own navy.

Abu Dhabi Aircraft Technologies, a Mubadala subsidiary, has a partnership venture with Sikorsky Aerospace and Lockheed Martin, both of the United States, in the Advanced Military Maintenance, Repair and Overhaul Center.

Raytheon is expected to set up manufacturing plants when it upgrades the Emirates' Patriot missile systems, boosting a burgeoning defense and aerospace industry that's arguably the most advanced in the Arab world.

Topics: Abu Dhabi
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