Why defence expenditures by Arab states can only rise
Dubai - Arab states, in particular Gulf Cooperation Council (GCC) members, are among the highest spenders on defence in the world, either in per capita terms or as a percentage of gross domestic product (GDP). According to the Stockholm International Peace Research Institute (SIPRI), the GCC had a combined defence expenditure of $113 billion in 2014.
Saudi Arabia represents almost 60% of the combined GCC defence expenditures, which is close to 10% of its GDP and nearly double its $48.5 billion defence expenditure in 2011, according to SIPRI.
Following the drastic slump in oil prices, with low prices forecast to remain until at least 2017, there has been widespread speculation on the implications for defence budgets in the GCC.
Austerity measures in the West following the economic downturn led to severe cutbacks in defence spending. Strict new guidelines were issued to militaries, including a number of controversial directives cancelling major contracts and the downsizing of others, such as with the F-35 Joint Strike Fighter Lightning II.
In contrast, Saudi Arabia has cut defence and security expenditures once since 2000, despite heavy exposure to the price of oil. More importantly than historical precedence, however, Arab states find themselves in the front line of escalating military conflicts, such as in Yemen and Syria, and are facing a barrage of emerging hybrid threats that require, at least in part, an effective military response.
For now, the focus of defence budgets has temporarily turned to operations and support (O&S) for the Saudi-led coalition engaged in Yemen. O&S costs include expenses for personnel, infrastructure, supplies, information systems and any services associated with operating, modifying, maintaining, supplying and supporting a system in the inventory.
Since operations in Yemen began, expendables have become depleted and, according to Heidi Grant, deputy under secretary of the US Air Force, the demand for weapons by the Saudi-led coalition has exceeded the US industry’s capacity to meet.
The United States is in the midst of clearing the sale of more than 10,000 advanced air-to-ground munitions for Saudi Arabia worth an estimated $1.29 billion to replenish Saudi inventories of a variety of laser-guided bombs (LGBs), general-purpose bombs, penetrator warheads and fuses. Similarly, the UAE and other GCC partners, which have performed major roles in the military campaign in Yemen, also need to replenish stocks.
Although precise figures are not available, high-tempo operations, such as those in Yemen, take a toll on equipment — aircraft, vehicles, communications equipment, etc. — which requires more maintenance and spare parts that can be difficult and costly to service, given the short turnaround times required by field commanders.
However, ageing and overworked equipment needs not only more frequent and accelerated maintenance but helps militaries identify and prioritise later procurements to either replace it or, more importantly in the Middle East context, to plug capability gaps that the operations demonstrate to the military leadership.
For the time being, various major procurements have been put on hold by Arab states as many focus on the largest military operations they have ever executed.
Still, major procurements have not stopped altogether. In November, the UAE placed a $1.27 billion order with Saab for two Erieye airborne early warning and control (AEW&C) aircraft, and announced procurement plans for the AW609 tilt-rotor search-and-rescue aircraft.
In September, Kuwait agreed to buy two squadrons of Eurofighter Typhoons and is expected to procure additional F/A-18 Super Hornet fighter-bombers. The Royal Bahraini Air Force is gearing up to place orders for various new aircraft within the next 18 months as well.
Egypt, which recently acquired the two Mistral-class amphibious ships (LHDs) that France had originally built for Russia, is planning to receive 50 Russian Ka-52 Alligator reconnaissance and attack helicopters.
Defence operates in an environment characterised by inherent complexity and uncertainty and the fact that Arab states recognise the criticality of ensuring operational readiness for a wide spectrum of missions means defence expenditures will remain at the elevated levels.
The winding down of operations in Yemen and Syria, when the time comes, is almost certainly going to be followed by major procurements that will drive defence expenditures by Arab states higher, rather than signal defence spending cuts.