Wed, Feb 23, 2011 - Page 6 News List

Western arms makers eye Mideast market

BONANZA:As governments around the region crack down on protests, the wheelers and dealers of lethal technology are hoping to cash in on the ensuing bloodbaths


Western arms makers, squeezed by budget cuts at home, jostled to sign deals at the biggest arms fair in the Middle East as crackdowns on anti-regime protesters claimed hundreds of lives in the region.

Shiny fighter jets and armored vehicles were showcased at the Sunday opening of the 10th International Defense Exhibition and Conference in Abu Dhabi amid reports of a bloodbath in Libya, the latest country in the region gripped by a sweeping pro-democracy uprising and ensuing violence.

“The post-financial crisis reality is that today it is clearly the Middle East that is seeing the biggest growth,” said Herve Guillou, president of Cassidian Systems, a subsidiary of European aviation defense group EADS.

Cassidian is in talks with a local company on computerizing the defense systems of the United Arab Emirates (UAE) army.

IDEX, which will run until tomorrow, hosts more than 1,000 exhibitors with more than 30 pavilions, mostly belonging to the UAE, the US, Britain, France and Germany. Nearly 50,000 visitors are expected from around the world.

A naval defense industries exhibition, Navdex, is also being organized for the first time this year.

The fair is taking place as the Arab world witnesses a wave of unprecedented revolts that have toppled veteran leaders in Tunisia and Egypt since the start of the year. Some governments have responded with violent repression.

In Libya, rights groups put the death toll at between 200 and 400 in the space of a few days. Yemen, Bahrain, Morocco and Algeria have also faced deadly unrest demanding an end to their decades-old regimes.

That has not stopped contractors from rushing to showcase their wares to Gulf states, whose defense expenditures are set to rise over fears of increased Iranian spending power because of high oil prices.

The six Gulf Cooperation Council countries — Saudi Arabia, Bahrain, UAE, Oman, Qatar, Kuwait — along with Jordan are set to spend US$68 billion (49.6 billion euros) on defense this year, according to research firm Frost & Sullivan. Their spending is expected to reach nearly US$80 billion in 2015.

“Undeniably, in the Gulf there are very big budgets that we don’t have in Europe,” said Christian Mons, president of the French Land Defence Manufacturers Association (GICAT).

The dynamic market is a godsend for Western contractors because defense budgets at home are being curbed, particularly in the US and in Western Europe.

However, they are faced with increasing competition from emerging economies. The Chinese, Ukrainian and South African stalls at the event expanded the most this year.

Nevertheless, negotiations are also long and difficult in the region because of demanding clients. France has been in talks with the UAE since 2008 of 60 Rafale fighter jets designed by Dassault Aviation, but Abu Dhabi is demanding a revamped version of the aircraft with a more powerful engine and an improved radar.

The topic of sharing the costs of touching up the jets is part of the negotiations.

“A negotiation always takes several years,” said Eric Trappier, who oversees the international operations of Dassault Aviation.

The new question mark is what long-term effects will the recent waves of revolts have on Arab defense policies. Some say that the level of expenditures on equipment, which are spread out over years, would not be affected.

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