Gulf defence spending seen strong despite low oil

ABU DHABI (Reuters) – Regional tensions are fuelling continued military spending by Gulf Arab states despite the global downturn and low oil prices, major arms suppliers said on Sunday.

‘The Middle East market, including the Gulf, remains very viable and credible. There is confidence in their ability to drive on their acquisition schemes,’ said P.T. Mikolash, Raytheon Co.’s Middle East and North Africa chief.


‘There are no delays in our projects so far,’ he said on the sidelines of the International Defence Exhibition (IDEX) in Abu Dhabi, the Middle East’s largest military show.

Raytheon announced on Sunday it had won a contract of ’sizeable’ value to provide the United Arab Emirates 224 advanced version AIM-120C-7 missiles.

Earlier this month Raytheon announced a $246 million contract for the UAE to provide spare parts for the new Patriot systems that Raytheon is building. Raytheon is also developing a laser-guided rocket programme for the UAE.

The energy-rich Gulf region has been affected by the collapse of world oil prices from nearly $150 a barrel last July to below $40 a barrel. The global financial crisis has also hit real estate and financial markets in the Gulf.

But concerns among Gulf countries, especially Saudi Arabia, over non-Arab power Iran’s rising influence is fuelling an arms race. Gulf Arabs fear Iran’s nuclear energy programme will allow it to develop nuclear weapons. Tehran denies any such interest.

Reuters