Saudi, UAE top defense spending in a record-breaking year
The Eurofighter Typhoon is popular with the Royal Air Force of Oman, Kuwait and Saudi Arabia. (Wikimedia Commons)
Fuelled by the Middle East and Southeast Asia, global defence trade reached a record-breaking $65 billion in 2015 as the value of imports by Saudi Arabia and the UAE surpassed the combined cost of military equipment purchased by Western Europe.
The annual Global Defence Trade Report released on Monday by IHS Inc., revealed that with $21.6 billion in deliveries of defence equipment, the Middle East was the largest importing region in 2015. The report predicted that the global defence market would increase to $69 billion in 2016.
"The global defence trade market has never seen an increase as large as the one we saw between 2014 and 2015," said Ben Moores, senior analyst at IHS. "2015 was a record-breaking year." Markets rose $6.6 billion, bringing the value of the global defence market in 2015 to $65 billion.
According to IHS, the largest Middle Eastern importers remain among the largest globally in 2015. Saudi Arabia, the largest defence importer globally, and the UAE imported $11.4 billion (17.5 per cent of the global total) worth of defence systems in 2015, up from $8.6 billion in 2014.
"The combined value of Saudi Arabia and the UAE's defence imports is more than all of Western Europe's defence imports combined," Moores said. Saudi Arabia's imports grew from $6 billion to $9.3 billion; an increase that is three times that of the entire sub-Saharan Africa market. The value of defence imports by the UAE was $2.07 billion in 2015. In 2016, while Saudi imports are estimated to exceed $10 billion, the UAE will record imports bill of $3.06, according to HIS.
After Saudi Arabia, India was the world's second largest defence importer with a value of $4.33 billion in 2015. However, in 2016, India's total import bill will drop to $3.95 billion, HIS data revealed.
"The US, Canada, France and the UK are the main exporters of defence equipment to the Middle East and beneficiaries of this spending boom," Moores said.
The IHS report indicates that US trade flow to the Middle East has been driven by sales of military aircraft and associated mission systems. Canada is the second-largest exporter of defence equipment to the Middle East with $2.7 billion in sales, moving the UK down the table to fourth place, just behind France. Germany and Russia each saw a 25 per cent growth in exports to the region of $1.4 and $1.3 billion, respectively. Russia is likely to increase its trade in the region as post-sanctions Iran begins to replace its exhausted aviation assets.
In 2018, France will move from the third to the second largest global exporter of defence equipment, pushing Russia down the table for the first time in decades.
"France has revived its defence industry and had spectacular back-to-back year of sales," Moores said. "2014 and 2015 were France's best-selling years in decades." France sold $26 billion of defence equipment, $8 billion in 2014 and $18 billion in 2015. In 2016, France secured the record-breaking $38.7 billion Australian submarine order.
This extended run has increased the French 10-year backlog for defence exports from $36.1 billion to $54 billion in 2016. These sales have included Rafale multi-role fighter aircraft, submarines and helicopters. The bulk of the sales went to India, Saudi Arabia, Australia, Qatar, Egypt and the UAE.
Saudi, UAE defence imports more than Europe
> The global defence trade market has never seen an increase as large as the one between 2014 and 2015.
> Saudi Arabia, the largest defence importer globally, and the UAE imported $11.4 billion worth of defence systems.
> The combined value of Saudi Arabia and the UAE's defence imports is more than all of Western Europe's defence imports.
> Global defence market would increase to $69 billion in 2016.
By Isaac John
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