Procurement: The Gulf Arabs Pay And Pray


April 2, 2014: The oil-rich Gulf Arab states continue to spend heavily on weapons to protect their wealth and independence. Qatar recently announced orders for $23 billion of new weapons and military equipment. Qatar spread it around, thus U.S. firms only got about 35 percent of the orders. Among the items purchased were 24 AH-64 helicopter gunships, 22 NH90 transport helicopters, two aerial tankers and lots of air defense gear. Because of the shortage of local technical staff, the price also includes lot of expensive Westerners to maintain it all.

Qatar is small (11,437 square kilometers/4,416 square miles) state with a population of 1.7 million. It has large oil revenues, giving it a per-capita GDP of over $80,000 (the highest in the world). The emir (ruler) has made sure that the money is shared, making the population tolerant of being ruled by a monarchy. The emir has recognized that most of the oil and gas will be gone within 40 years and is trying to build a "knowledge economy" that will keep Qatar prosperous after the oil boom is over.

Qatar is one of the many emirates that occupy the western shore of the Persian Gulf. In the 19th century the coastal emirates (city states that depended on trade, pearls, and fishing) allied themselves with Britain, for protection against the Turks (who controlled what is now Iraq), Iran (always a threat to the Arabs), and the interior tribes of Arabia. Britain was interested in suppressing pirates (which often operated out of the emirates) and halting Turkish expansion. In 1971, seven of the emirates formed a federation: the UAE (United Arab Emirates). There were immediate disputes with Saudi Arabia about where the land and water borders should be. Some of those disputes are still unresolved. The Saudis consider themselves the leader of Arabia but most of the population (in Yemen, Kuwait, Oman, and the UAE) often disagrees. There is a lot of friction. Nevertheless, in 1981, the Gulf Cooperation Council was formed by Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE.

It’s not just Qatar that’s buying weapons. In 2013 the Arab Gulf states ordered another $13 billion in weapons and military support services from the United States. About half of this was for Saudi Arabia, the rest went to Kuwait, Iraq and the smaller Gulf states (in that order). The 2013 purchases included a lot of smart bombs and air-launched missiles (SLAM ER, Harpoon, JSOW) as well as billions for maintenance and upgrades for existing equipment.

Arms sales like this are not unusual for the Middle East. Since 2010 annual arms exports to this region have averaged over $60 billion a year and most of it has gone to the six oil-rich members of the GCC (Gulf Cooperation Council). Saudi Arabia, the UAE and Kuwait are the big buyers and the main reason for that is fear of Iran.

On the face of it all those purchases appear to be overkill because Iran must smuggle in its arms imports, as legitimate purchases are banned by international embargoes. Iranian military procurement is less than a tenth of what their Arab neighbors are spending. But the Iranians have a long tradition of doing much with little when it comes to military equipment. In addition the Arabs have a much less impressive combat record, especially in the last century. So the oil-rich Arabs are trying to equip their troops with a lot of the best stuff available and hope for the best.

The U.S. continues to be the leading arms exporter followed by Russia, France, Britain, China, Germany, and Italy. The sharp growth in arms exports is largely because in the past decade global defense spending has increased nearly 50 percent to over $1.4 trillion. That's about 2.5 percent of global GDP. After the Cold War ended in 1991, defense spending declined for a few years to under a trillion dollars a year. But by the end of the 1990s it was on the rise again. The region with the greatest growth has been the Middle East, where spending has increased 62 percent in the last decade. The region with the lowest growth (six percent) was Western Europe. Spending growth has resumed now that the recession is over in many parts of the world.






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