UK defense firms court GCC customers, but low oil bites

Published November 9th, 2015 - 03:00 GMT
Last month, BAE Systems inked a £5.8B deal to sell Eurofighter Typhoon combat jets to Kuwait. (File photo)
Last month, BAE Systems inked a £5.8B deal to sell Eurofighter Typhoon combat jets to Kuwait. (File photo)

Arab Gulf states bought an increasing amount of military weapons from British defence companies this year after entering the Yemen conflict, UK Minister Phillipe Dunne told reporters in Dubai on Sunday.

Dunne, the UK’s Minister of State for Defence Procurement, said at the Dubai Airshow that increasing security pressures in the region were pushing Gulf countries to buy despite low oil prices.

“We are not noticing a significant reduction [in purchases], in fact far from it. We’re seeing more interest in defence capability enhancement by countries in [the] region,” he said.

Gulf Cooperation Council (GCC) states — Saudi Arabia, the UAE, Kuwait, Bahrain and Qatar — are all part of a coalition fighting in Yemen to restore the internationally recognised government of President Abd Rabbo Mansour Hadi. Oman is the only GCC state not involved.

Dunne did, however, warn that low oil prices, which have fallen from $115 (Dh422.4) a barrel in June 2014 to below $50 today, could eventually eat into the spending habits of the Gulf States when it came to weapons procurement.

“Clearly the oil price has a significant impact on the income coming into the economy in this region and if this is sustained there might be some impact on their spending priorities,” he said.

Dunne said the UK government is looking for opportunities for British companies to work with UAE companies in the defence sector.

UAE companies, particularly those in Abu Dhabi, have set up joint-ventures and partnerships with European and US companies to manufacture civil- and defence-related parts.

In 2013, the UAE pulled out of talks to buy the Eurofighter Typhoon fighter jet made by a European consortium. The UK government was taking the lead on the talks with British company BAE Systems part of the consortium.

By Alexander Cornwell

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