During Abu Dhabi’s International Defense Exhibition (IDEX) on February 17, the Emirati company Calidus signed a memorandum of understanding with Saudi-based aerospace and defense company GDC Middle East to export its new B-250 light attack aircraft to other countries in the region. The project signaled the ostentatious resolve of the United Arab Emirates (UAE) and Saudi Arabia to strengthen their domestic defense industries. Foreign arms sales to Gulf countries have traditionally come with requirements, known as “offset clauses,” to ensure that the contractors support the local economy through joint ventures with domestic companies, investments, and employment of the local labor force—yet, to date, their economic output has been modest. Gulf defense industries are still barely on the radar of global arms markets, a strikingly low visibility compared to the size of the GCC military budgets.
In past couple of years, the UAE and Saudi Arabia have ramped up efforts to increase indigenous military capabilities. Two regional factors drive this new impetus. First, the 2014 fall of oil prices revived government efforts to reform national economies and diversify their sources of income. In this context, building an indigenous military industry not only creates jobs but can also support long-term economic development, for instance in the field of education and research. This is why strengthening local defense companies features prominently in documents such as Saudi Vision 2030 or Abu Dhabi Economic Vision 2030. Second, sustaining a domestic defense industrial base enables small states to build their own strategic autonomy, as it decreases their reliance on foreign arms.
Against that backdrop, the UAE—and to a lesser extent Saudi Arabia—provides a useful case study as the GCC country farthest along in developing a domestic defense industry. In the last decade, Abu Dhabi launched major reforms to reorganize the Emirati defense ecosystem. In 2014, the government integrated sixteen small firms into the Emirates Defense Industries Company (EDIC), the the largest arms manufacturing and services provider in the country. Along with the EDIC, the Tawazun Economic Council (TEC)—formerly known as the UAE Offset Program Bureau—plays a key role in financing local industrial initiatives. In February, it announced the creation of a Defense and Security Development Fund, which has a starting capital of $680 million.
It is through the investments of the TEC that the most significant successes of the Emirati defense industry were achieved, such as the formation of the Advanced Military Maintenance Repair and Overhaul Center (AMMROC). A joint venture between the EDIC, Lockheed Martin, and Sikorsky Aerospace, AMMROC focused initially on military maintenance and repair services, primarily for the Emirates Air Force. Since then, AMMROC has steadily elevated its ambitions. In January, it showcased a new weaponized version of the Sikorsky UH-60 Black Hawk helicopter. At the technical level, this modified helicopter is not unique, and other countries operate similar versions, but AMMROC used the event to underline both its growing technical capacity and its key role in supporting the localization of defense industries.
The trajectory of AMMROC is indicative of a pattern among domestic companies. Abu Dhabi Ship Building (ADSB), created in 1996, likewise initially focused on naval repairs and refits. Since then, the company broadened its expertise in shipbuilding. In the mid-2000s, the UAE Navy chose ADSB to build six Baynunah-class corvettes. While not all of the construction was local, as the first ship was developed in France by Constructions Mécaniques de Normandie, the other five were then manufactured inside the UAE. In recent years, ADSB has even exported landing craft to Oman, Bahrain, and Kuwait.
For the Emirati government, the success of companies such as ADSB or AMMROC is not only a way to build indigenous platforms but to compete regionally on major bids. Beyond the commercial prospects, this trend shows the extent to which the defense industry has become an instrument of the UAE foreign policy. The February announcement at IDEX regarding Saudi–Emirati projects helps institutionalize their official bilateral alliance announced on December 5, 2017 on the eve of the annual GCC summit. Similarly, in 2017 the UAE announced a joint project with Russia to build a fighter jet. The decision signaled Abu Dhabi’s ambition to develop a military platform that is both technologically complex and a symbol of military power. It also demonstrated improved relations with Russia, which until recently was only modestly involved in Gulf arms markets.
These achievements, however, remain limited in scope. The Emirates’ overarching goal is not to replace Western major companies, which will likely remain the primary source of Gulf military purchases for the near future through either arms exports or joint ventures. For the UAE, the objective is to develop specific skills that would put the local companies on the global market for niche commodities such as naval ships, armored vehicles, or unmanned aerial vehicles (UAVs)—another domain in which the UAE has demonstrated its industrial ambitions. One relevant comparison is Turkey’s defense industry: following the 1974 arms embargo, Ankara invested in building a local defense industry to make its national armed forces self-sufficient. It achieved this partly through research and development, and partly with niche strategies.
The extent to which other GCC defense industries can follow the UAE’s example remains unclear. The UAE is ahead of other GCC countries in building a local defense industrial base. Saudi Arabia, the biggest consumer of military services and products in the region, has embarked on a similar path. Saudi Vision 2030 sets an ambitious goal to “localize 50 percent of military and security spending” by 2030, but reaching this milestone on time might prove challenging for Saudi Arabia’s existing industrial base. Other GCC countries such as Kuwait, Oman, and Bahrain have not prioritized building a defense industrial base. While Qatar invested massively in its military apparatus in past few years, the investment has not significantly localized its defense industry. It appears the rise of the Emirati defense industry might end up an isolated phenomenon.
Jean-Loup Samaan is Associate Professor in Strategic Studies attached to the UAE National Defense College. The views expressed in this article do not reflect those of the UAE National Defense College, the Near East South Asia Center for Strategic Studies, nor any government.
