Efforts to modernise the military and improve defence will increase UAE’s defence expenditure from the average of $22.4bn during 2012-2016 to $28.2bn during 2017-2021, according to a report by Strategic Defence Intelligence (SDI).
Titled ‘Future of the UAE Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2021’, the report states that the UAE’s cumulative defence expenditure during 2017-2021 will grow to reach $140.8bn by the end of the forecast period.
UAE is estimated to spend $53.1bn on defence procurements on a cumulative basis during the forecast period. Defence spending will be driven by UAE’s efforts to protect crucial infrastructure, its territorial dispute with Iran, and initiatives to expand the domestic defence industry.
SDI also estimates the UAE’s defence expenditure as a proportion of its GDP to stand at 6.7%, with an average per-capita expenditure of $2,610 during the forecast period.
The report adds that defence manufacturers can seek export opportunities in aerial platforms, missiles, naval platforms and surveillance areas. It also highlights other areas where the UAE is likely to invest, such as reconnaissance, space, cyber security, border control, and digital warfare initiatives.
The US is the biggest supplier of equipment to the UAE, accounting for 65.4% of the country’s arms imports.
Foreign original equipment manufacturers (OEM) who wish to manufacture defence systems within the UAE are challenged by strict offset obligations. Limited liability companies are required to include a domestic partner with at least 51% ownership, adds SDI.