Advanced Equipment Procurement Agendas Evolve In The Middle East

Rising defense budgets in Asia and Europe in recent years mean that the Middle East no longer is the principal outlet for Western arms exports. But the region’s financial muscle and efforts to establish local arms manufacturing centers have kept it central to shaping the dynamics of the global defense industrial base.

Saudi Arabia recently illustrated this in unveiling its latest defense budget plan, which calls for a 5% hike in spending. The budget will rise to 272 billion riyals ($73 billion), the world’s seventh largest, from a revised estimate of 259 billion riyals in 2024.

• Dassault aims to deliver Rafales to the United Arab Emirates in 2027
• Embraer eyes C-390 and A-29 deals in the Middle East

The budget documents suggest a strong focus on advancing Riyadh’s Vision 2030 goal of buying 50% of defense equipment locally by the end of the decade. The interim target for this year is 20%. A reduction in procurement spending over recent years amid budgetary constraints will help Saudi Arabia achieve this benchmark by minimizing large off-the-shelf purchases from overseas suppliers. The budgetary situations in the United Arab Emirates (UAE), Oman and Bahrain are similar.

When the U.S. released the details of its fiscal 2024 arms transfer data, valued at a record $117.9 billion, the only Middle Eastern mention was the authorization of a logistics package for Saudi Arabia that made the list of 10 largest Foreign Military Sales authorizations—and barely, as it was the ninth largest, valued at $2.8 billion.

That is not to say the Middle East no longer looms large. Saudi Arabia’s requirement for more combat aircraft has drawn the focus of Boeing with its F-15EX, Dassault with its Rafale and Eurofighter with its Typhoon.

Saudi defense officials have made clear they are looking to couple their next combat aircraft purchase with efforts to boost indigenous defense production capacities, including through involvement in a next-generation fighter project. Italian Prime Minister Giorgia Meloni said during a January visit to Saudi Arabia that she was open to the country joining the Global Combat Air Program (GCAP). Italy has partnered with Japan and the UK on GCAP, with an eye to introducing the aircraft into service around 2035.

Those deals also show how Saudi Arabia is working to catch up with the UAE in building up its domestic arms industry. The UAE has taken a lead largely through its effort to build up the five-year-old Edge Group through a series of acquisitions. The company, created out of the merger of several businesses, has evolved into a provider of uncrewed aircraft systems (UAS), munitions and other equipment. Edge recently said its total sales have reached about $5 billion. While the domestic market remains the backbone of the company’s turnover, Edge says, its exports now surpass 40% of revenue.

Leonardo used Meloni’s visit to announce an agreement to expand cooperation with Saudi Arabia in combat aircraft and helicopters. Italy’s ELT Group signed a similar deal with Saudi Arabian Military Industries subsidiary SAMI Advanced Electronics Co. to look at collaboration and localization of advanced technologies.

Persian Gulf state procurement activity is somewhat more muted than in the past, in part because the countries shopped heavily over the past decade, particularly for U.S. and European-made fighters. Dassault rolled out its first Rafale in January for the UAE and plans to start delivering the 80 fighters in 2027.

Even so, there is still appetite for systems to support other armed forces needs, Embraer Defense Chief Commercial Officer Frederico Lemos says.

The Brazilian aircraft-maker has been in talks with countries in the Middle East to sell its C-390 tactical transport, Lemos says, noting that recent success securing orders elsewhere has helped in those talks. The company expects about 30% of the 460-aircraft addressable market over the next 20 years to be sold in the region as countries look to replace long-serving Lockheed Martin-built C-130s. Lemos asserts that the C-390 could serve as a tanker to support special operations or to deliver lower-cost refueling options than the larger strategic tankers some air forces in the Middle East operate.

Both Saudi Arabia and the UAE have boosted the size of their tanker fleets in the past three years. Abu Dhabi  ordered two more Airbus A330 Multi-Role Tanker Transports in 2021, and Saudi Arabia ordered four more in July, growing its fleet to 10 aircraft. The additional tankers expand the expeditionary capabilities of the two air forces; both  now regularly deploy their aircraft into Europe and South Asia for training and power projection.

Like Embraer, Airbus sees transport aircraft opportunities in the region and hopes to secure orders for the A400M, particularly from Saudi Arabia. The deal could gain momentum now that Germany has lifted a block on arms exports to the country.

Embraer also sees opportunities in the Middle East to place more A-29 Super Tucanos, which Lebanon already flies, Lemos says, in particular as countries look to tackle intercepting UAS. The turboprop combat aircraft could do that mission at a fraction of the cost of using a jet fighter, he says. The UAE already has taken steps to address that threat, placing an order in November 2023 for 40 indigenously developed Calidus B-250 turboprop training aircraft.

Another sign that air defenses are high on the agenda in the region is South Korea’s success selling the medium-range ground-based KM-SAM II to Iraq, Saudi Arabia and the UAE.

Militaries in the Middle East are not just looking to defend against UAS—they are pursuing large stocks themselves. Having struggled to purchase U.S. platforms for many years, several countries have opted for rival Chinese equipment only to encounter reliability issues. Now Turkey is seemingly becoming the UAS provider of choice.

Istanbul-based Baykar on Jan. 1 announced the delivery of at least two Bayraktar Akinci twin-engine systems to the UAE, part of an order for roughly 60 airframes. The country is buying a similar number of the smaller tactical TB2 platforms and plans to arm them with weaponry developed by Edge. Baykar also has signed a large deal to provide Akinci to Saudi Arabia, with Saudi industry expected to perform assembly of the aircraft and some of the sensors through agreements with Turkish industry. SAMI also has ambitions to build its own systems. Kuwait and Qatar have acquired TB2s as well, but the UAE is ramping up in-house UAS efforts under Edge.

Despite China’s drone missteps, it has made inroads into the region with training aircraft, including selling its Hongdu JL-10 advanced jet trainer to the UAE. Those initially went to the country’s aerobatic team, but the UAE has options for an additional 36 for advanced training.