New Dimension to Gulf Defence Market

An F-35A Lightning II pilot assigned to the 4th Expeditionary Fighter Squadron prepares for a combat sortie in the US Air Force's Central Command area of responsibility 26 April 2019, Al Dhafra Air Base, United Arab Emirates.

Published in the Middle East Feb/Mar 2021 Supplement – The normalisation of relationships with Israel through the Abraham Accords will stimulate the growth of the defence industry, not least among the signatories.

Leaders in Washington DC have concluded that President Biden will probably not seek to change “the Abraham Accords”. Those are the US-brokered agreements of 2020 which normalised Israeli diplomatic relations with the UAE on 13 August, 2020 and Bahrain on 15 September 2020. Sudan normalised relations with Israel on 23 September and a formal letter confirmed Morocco’s ‘new era of relations’ with Israel on 22 December 2020. It was the first breakthrough in the normalisation of relations between Israel and Arab countries since Jordan in 1994. While defence and hi-tech trade did exist ‘out of sight’ before these Accords and agreements, these public statements will formalise such business into the future.

At the time of their signing, the broad consensus was that these Accords would alter the arms trade dynamic in the region. What might be the expected in the short to medium terms is the expansion of not only international defence industries looking to grow their footprints, and their profits, in the Gulf, but also a maturing of the Gulf’s own fledgling national defence industries.

Saudi Prince Alwaleed bin Talal once admitted that arms sales in the Middle East and the Gulf are ordinarily “highly secretive and subject to no ministry of finance oversight or controls.” Gulf monarchies (plus the governments of the Arab world, Iran, and any developing states) are governed in ways such that and not subject to the same arms trade rules of the kind prevailing inside NATO members or allies.

Gulf monarchies operate under none of the arms restrictions which most democracies have in place, nor is there any national institution which regulates arms acquisition standards. In essence, the Gulf’s governments have created decision-making processes which are intentionally meant to be opaque. This may continue to cause difficulties for defence manufacturers located in highly regulated countries.

According to a tracker developed by one US-based non-profit, Forum on the Arms Trade, more than $42 billion has been specified in mandatory Foreign Military Sales notifications since 30 March, 2020.

The General Atomics Predator XP is an updated version of the Predator RPA. It has been licensed by the US Government for sale to a broader customer base, including Middle Eastern, North African, and South American regions.

To better understand the impact of the Accords we asked notable experts to provide their views about the interplay between the Gulf’s monarchies, the US government, and those defence firms which are looking to sell arms to the Gulf monarchies. These discussion were conducted before the 20 January inauguration of President Biden. Here’s what we learned:

Raffaella A. Del Sarto, associate professor of Middle East Studies at The Johns Hopkins University School of Advanced International Studies. Ms Sarto thinks that “it is very unlikely that the Accords will bring any degree of greater transparency to the region. The accords with Israel have further boosted the international reputation of these countries and their image as ‘moderate’ regimes, especially in the US. They are likely to be seen as real partners in a turbulent region, and the sale of advanced weapons to these countries is likely to increase. In addition, the Accords promise to boost business deals on advanced technology with Israel even further (which were conducted secretively before).

The weapons industry provides huge profits and employment, which is even more relevant in times of economic crises, most recently experienced globally as a result of the COVID pandemic. The Gulf states are key clients as the Middle East is currently one of the most militarised regions in the world.

Dr. Osamah Khalil, associate professor of History at Syracuse University in New York believes that “the Abraham Accords will facilitate greater arms sales to the Persian Gulf region. Even before the agreement, the United Arab Emirates (UAE) sought a greater role in US military planning and operations and purchased large quantities of US weapons.” It also was a consumer of Israeli surveillance technologies.

Bahrain is home to the US Naval Forces Central Command and the US Fifth Fleet, and is responsible for US naval activities in the Persian Gulf, Red Sea, Arabian Sea, and parts of the Indian Ocean . Both the UAE and Bahrain have sought expanded ties with Washington to contain Iran’s influence in the region. As demonstrated by the sale of up to 50 Lockheed Martin F-35 fighters, 18 armed General Atomics MQ-9 Predator XP unmanned aerial systems and other defence equipment to the UAE worth around $23 billion, there will be an even greater demand for US and Israeli weapons and technology.

Dr. Eckart Woertz, director of the German-based GIGA Institute for Middle East Studies sees an additional benefit, in that “one aspect of the arms trade in the Gulf is to cultivate foreign alliances, not necessarily to increase military effectiveness.”

Dr. William D. Hartung, director of the Arms and Security Program at the Washington, DC-based Center for International Policy does not expect the Abraham Accords to lead to more transparent arms procurement: “They are the result of a pragmatic decision by the governments of the UAE and Israel to publicly align in service of their de facto alliance against Iran; curry favour with the (then) Trump administration; and open up potentially beneficial economic and security ties. For its part, the Israeli government has discussed a countervailing $8 billion arms package from the US, one that would include additional F-35s beyond those it already possesses, along with attack helicopters and other offensive weaponry.

Taufiq Rahim, senior fellow in New America Foundation’s International Security programme stated that “the normalisation of relations between the UAE and Israel take a relationship previously in the shadows into the public view, which will inevitably lead to greater attention, security, and ultimately heightened transparency.”

Rahim was asked about the possible implications of the Abraham Accords – especially for those who are seeking to encourage more transparency in arms procurement. He thinks that “there will be opportunities for media and academic institutions to openly engage in further exploration of the relationship between the defence sectors …and given the open media in Israel, this will be a natural result.”

The Ticonderoga-class guided-missile cruiser USS Leyte Gulf transits the Persian Gulf after a port visit. The vessel was on a routine deployment to the US 5th Fleet area of responsibility.

Dr. Seema Gahlaut, director, Strategic Trade Management Initiative & Senior Fellow, Trade, Technology and Security Program at The Henry L. Stimson Center; a noted expert on munitions export controls and sanctions, was asked about the most likely categories of arms that the US might sell (via the FMS process) or allow its companies to sell via direct commercial sales (DCS) and 600 Series programs (through the Commerce Control List) ) to Bahrain. “In 2018, Bahrain’s arms imports were reported to be $65 million. These figures do not include military equipment such as small arms and light weapons, trucks, small artillery, ammunition, support equipment, technology transfers, and other services. Some of these excluded categories have been part of what US allies (such as the UK) have been selling to Bahrain for over a decade.” Dr Gahlaut says these categories are “now part of the 600 Series in the Commerce Control List, where the traditional emphases has been on promoting US sales, with much lower level of due diligence than the State/DDTC-managed, ITAR-controlled, arms sales.”

Dr. Gahlaut concludes that, “on the issue of diversion, Bahrain’s own regulatory structures provide some protection: arms, ammunition, explosives and military weapons cannot be imported/exported into/from Bahrain without a No Objection Certificate from the Ministry of the Interior.”

While the defence industries of the signatories are all likely to benefit directly from the brokered Accords, international defence manufacturers and suppliers will also find an expanded market which is likely to be less restricted than before.

by Andrew Drwiega & Gordon Feller