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Hollande drives for arms deals in Persian Gulf as U.S. power wanes

Jan. 7, 2014 at 12:45 PM   |   Comments

DUBAI, United Arab Emirates, Jan. 7 (UPI) -- French President Francois Hollande is pushing hard to restore Paris' once-thriving defense links with the Persian Gulf monarchies, especially the major military power Saudi Arabia and the United Arab Emirates, with the aim of securing major arms deals.

He concluded a two-day visit to Riyadh Dec. 31 designed to restore France's diplomatic clout in the strategic, oil-rich region clearly exploiting Saudi Arabia's growing differences with the long-dominant Americans over their refusal to help topple Syrian President Bashar Assad, and the Obama administration's new strategic objective of a rapprochement with Iran, the kingdom's bitter rival for leadership of the region and the Muslim world.

And so far, Hollande's plan seems to be working: Witness the Dec. 29 announcement that Riyadh has pledged $3 billion to buy weapons from France to strengthen Lebanon's military against Hezbollah, the powerful Iranian-backed movement that's helping Assad, a key Iranian ally, hold onto power against Saudi-backed Syrian rebels.

That should be a major shot in the arm for France's defense industry, which has had a lean time in terms of arms deals in recent months.

Dassault Aviation, one of France's major defense contractors, has a lot riding on its efforts to sell 60 Rafale multi-role combat jets to the Emirates, a contract worth upwards of $10 billion.

Dassault has lost out in several big combat fighter contests in recent years, including a $4.5 billion 36-jet deal with Brazil, and is desperate to secure the gulf contract that would be Rafale's first confirmed export sale.

In 2012, Rafale was tipped as the winner in an Indian competition for 126 combat aircraft worth more than $120 billion, but disagreement with New Delhi over the cost of building 108 of them in India has left the whole deal hanging, with no sign of an early resolution.

If the Emirate contract fizzles, Dassault will have to seriously cut back the Rafale production line amid French defense budget reductions.

France slashed its Rafale order in mid-2013, from 11 per year to 26 over six years, and now the assembly line will be threatened if Dassault can't make a big Rafale export sale in the gulf.

"Rafale relies on the French government for its survival, but Paris can no longer afford to shoulder the $2.02 billion-$2.7 billion annual cost of keeping up production," observed British defense analyst Carola Hoyos.

"Ending Rafale's production ... would maim France's military aerospace industry and undermine the diplomatic and military influence it gains from being one of the few countries able to rely entirely on its own equipment."

In December, the Emirates dropped the Eurofighter Typhoon, built by a European consortium headed by Britain's BAE Systems, boosting Rafale's prospects. But Dassault, which has been negotiating with the Emiratis for years, could still lose to Boeing's F/A-18.

"France will pursue its efforts to increase its defense market share in the gulf despite the commercial tensions this will create with its U.S. and U.K. allies," observed Oxford Analytica.

"Defense ties should become stronger as France responds to further requests for security assistance from the gulf states. Yet its quest for renewed diplomatic influence in the region cannot be pursued alone, and will require U.S. and U.K. support."

Restoring defense and trade ties with the gulf has been one of Hollande's priorities since his May 2012 election.

"Hollande's new team was eager to turn the page after the Sarkozy presidency's inconclusive partnership with Qatar and distant relations with the Saudis and the Emiratis," Oxford Analytica noted.

"Defense Minister Jean-Yves Le Drian has invested considerable time and energy to fulfill that objective, resulting in a major improvement in ties."

Indeed, Le Drian has visited Saudi Arabia, the Emirates and gas-rich Qatar, which seeks 72 new strike jets and could become a Rafale customer, no less than 13 times since mid-2012. Hollande's visit to Riyadh was his second in a year.

In the 1980s France supplied Saudi Arabia with several frigates and other warships under the Sawari naval program and these now need to be replaced. Paris hopes to secure the contract, worth around $13.8 billion, for six advanced frigates and 5-6 submarines.

France is also hoping to secure a $2.72 billion contract to upgrade the kingdom's air defense system, known as the Mark 3 Program.

© 2014 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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