Nadim Hasbani is a Researcher at the Paris based French Institute of Geopolitics “Institut Français de geopolitique” and an Associated Researcher at the Middle East North Africa Research Group of the Ghent University.
This article was first published in the Defense & Security Analysis magazine, Vol. 22, No. 1, pp. 73-88, March 2006
The Gulf region currently remains the largest defence procurement market in the world. With tens of billions of dollars spent annually on highly lethal and technological weapons, it is a very high value-added market for Western defence industries.
The Middle East, which extends from the Maghreb, through the Mashrek to the Persian (Arabian) Gulf, is far from being homogenous, particularly in terms of its armaments market. However, a distinction must be made between the weight and the characteristics of the major defence markets in North Africa, the Near East and the rest of the Middle East.
Traditionally, Russia has had the monopoly on major Algerian Defence contracts. With the end of the arms embargo, a new Libyan defence market is emerging, but has yet to come into its own. Israel and Egypt are in a league of their own, because of massive US military aid received following the signing of the 1979 peace accords : approximately US$2.3 billion for the former and US$1.3 - US$1.8 billion for the latter . Jordan, since signing a peace treaty with Israel in 1994, is in a similar position. Syria finds itself virtually excluded from the international procurement market, with the exception of the sale of Russian ground-to-air missiles following Bashar el Assad’s visit to Moscow in January 2005. Conventional Syrian weapons are nearly exclusively Soviet, dating from the first half of the 1980s.
The oil monarchies of the Gulf Co-operation Council (GCC) - Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE) - make up the core of the Middle East defence market, with just under 40 percent of the world’s total weapons sales during the 1990s. Combined, its ratio of military spending to Gross Domestic Product (GDP) is the highest in the world and, on average, is above 6 per cent. This ratio is two times greater than in industrialised countries, where the average is closer to 2.4 per cent.
There are, of course, a number of reasons for these levels of expenditure. Ethnic and community fractures crisscross the Gulf’s geopolitical space. They are exacerbated by the region’s wealth in hydrocarbons, its specific geographic configuration, and large-scale foreign intervention. The region is also a stage for internally destabilising factors, such as radical Islamist movements and demands for social, economic and political reform.
Due to its wealth and geo-strategic importance, the Arab-Persian Gulf has witnessed three major international wars over the past 25 years : the Iran-Iraq war, the first Gulf War and the War against Iraq to oust Saddam Hussein. The “manna” of oil in the Gulf - almost one out of two barrels comes from this region and it has 70 percent of known world reserves - coupled with the strategic stakes and risks of military confrontation have transformed the Gulf into the principal weapons market for Western Defence industries.
Nevertheless, owning these large amounts of highly technological weapons has not allowed the Gulf states to take independent control of their own security. External threats still extend beyond their political, military and human capacities, and it is for this reason that an “oil for security” pact has remained for a long time the principal motivation for the large weapons orders in the region.
The decision-making process that precedes the signing of major defence contracts, which can some years amount to a total of US$50 billion, takes into account the political-security guarantee that these contracts offer, the technological quality of the equipment itself, the industrial marketing campaigns, and the quality and financial arrangements associated with competing offers. Other factors of varying importance also play a role, including the influence of the different members of the ruling families and the degree of power and influence of indigenous tribes. Moreover, a decision-making rationale is evolving and other factors are also being taken into account. Today, procurement policies are being devised more and more on “Western-style” geo-political grounds, where military, defence and security strategy dictates future equipment needs.
Finally, the influence of domestic threats on defence and military procurement policies, such as militant Islam and internal upheavals, is growing. These internal threats have become major decision-making factors since 11 September 2001 and following the various attacks - both successful and thwarted - in Saudi Arabia and elsewhere in the region.
THE GULF : THE WORLD’S LARGEST ARMS IMPORT MARKET
Since the first oil shock that followed in the wake of the October 1973 Arab-Israeli war, and on account of the subsequent regional instability and booming oil revenues that increased tenfold, the Gulf states took over first place in global arms imports. At the same time, 1971 was marked by the independence of four of the six GCC states consequent upon Britain’s withdrawal East of Suez. These new states then began to build up national armies from scratch, from building base encampments, military airports and, communications centers to the acquisition of military equipment.
The defence procurement market in the Middle East has been in existence for a long time, basically because there had been virtually no demand for military equipment prior to the 1970s and also because there was no domestic defence industry. Since then, very little by way of defence manufacturing capabilities has been developed, the preference being to access weapons from abroad. Despite the unique financial capacities of the Gulf region states, technological transfers are rare when seen in contrast with other defence markets (for example Israel, Turkey, India, China or Korea). The Gulf region states continue to import 99 percent of their military equipment and are extensively dependent on the vendor states to train their personnel and, in particular, to maintain their equipment. There have, however, been moves to increase defence industrialization in Egypt, Jordan and the United Arab Emirates, but the achievements have been modest.
Military Spending is Centered on Three States
Seventy percent of military expenditures in the Gulf region are accounted for by Saudi Arabia, the United Arab Emirates and Kuwait. In the 1980s, Iraq was the second largest weapons buyer in the Middle East, after Saudi Arabia. In 1987, it spent US$7.83 billion on military equipment. But in 1991, known Iraqi military spending decreased virtually to nothing. Saudi Arabia conversely has been the most consistent in terms of its weapons procurement policy. The 1987 and 1996 figures show Saudi spending US$9.32 billion and $9.05 billion on military equipment, respectively, making it the largest importer of weapon systems in the world. More recently, from 1997-2000, Saudi Arabia’s arms agreements reached $4.9 billion. From 2001-2004, Saudi Arabia’s arms agreements were $5.6 billion . Moreover, the GCC states’ military budgets are unequalled in the rest of the world ; together, they allocate between 23 and 45 per cent of their state budgets to defence .
Military Budgets Remain Dependant on Oil Prices
The Gulf defence markets continue to be highly dependant on the price of oil. The low oil prices in 1989 and 1998-1999 slowed down the armament procurement programs of the Gulf states. Some, such as Saudi Arabia, even made deferred payments for orders placed during times when oil prices were high. Saudi Arabia’s oil profits went from US$90 billion in 1997 to US$55 billion in 1998. In that one year, the Saudi budget, of which a huge amount is allocated to defence spending, dropped by US$35 billion.
The United Arab Emirates is the only country in the region to have succeeded in a relative diversification of its sources of revenue, making it the least dependant of the Gulf states on oil revenues. As such, it is the most financially secure client and has the means to support its military ambitions. This strongly appeals to the suppliers to the second largest purchaser of defence equipment in the Gulf region. As a consequence, the United Arab Emirates was the GCC state to sign the most defence contracts during the 1998 Gulf financial crisis.
Weak Demographics are Compensated with High-tech High Value-added Equipment
The Gulf states are characterized by a weak demography and a fragile sense of citizenship. These two factors have radically transformed the armaments market of each of the individual GCC countries. The lack of a sense of citizenship and allegiance to the state is primarily due to the way in which oil revenues have been gathered, as well as their political structures, which are based on a single royal family practically owning all the country’s resources and holding all the political power.
The Gulf market is characterized, also, by the absence of an integrated industrial capacity. This lack of local participation in manufacturing necessitates the delivery of “ready-made”, off-the-shelf defense products : a tank, for example, is delivered as a complete, finished product, with almost no modifications. The delivery of “ready-made” equipment is far more profitable for the supplier, as it does not have to adapt its product to meet the specific needs of the client. This again contrasts with other Middle East markets, including Egypt’s, and especially those of Turkey and Israel. Moreover, the attraction of very advanced technological military equipment comes at a high price. This need for technological superiority is typical of the Gulf states in their search to compensate for their lack of human resources.
Due to their weak demographics, but also the reluctance of local workers to take on professions seen as unprofitable (socially and economically), particularly following the 1973 oil boom, a very large number of Arab and foreign immigrants are required to meets the needs of the economy. This shortage also affects the recruitment, training and retention of soldiers, military commanders, technicians, etc. The call for foreign labour (especially Pakistanis for military personnel) has become the norm, since national domestic military recruitment is extremely difficult.
The Gulf defence market, however, has its limits. The most important of all is its lack of quantitative and qualitative trained human resources to operate and maintain the new, technologically advanced equipment effectively. During the 1990-91 Gulf War, the Saudi Army under the American Joint Forces Command comprised two National Guard battalions, a squadron of Tornado airplanes and a mechanized brigade of 5,500 men. Virtually all were Pakistanis, who had 100 tanks and 90 armoured vehicles at their disposal. During the war, Saudi Arabia put in a further order for 315 American M1-A2 tanks. In 1998, however, 200 of these 315 tanks had been placed in storage.
In some of the other Middle Eastern countries, the situation is even more complicated. Bahrain, for example, is confronted with a religious problem that limits recruitment even more. Shi’ites do not have the right to serve in the Bahrain armed forces or the police. As more than 70 percent of the 440,000 Bahrainis are Shi’ite, this means nearly 330,000 people are unavailable to serve in the armed forces. In the United Arab Emirates, at least 30 percent of its armed forces are expatriates . Nearly 20,000 of the 65,000-man army are from abroad. The Air Force and Navy are the most “nationalized”, and as a result, the Army is even more dependent on foreign labour.
Many analysts have, therefore, concluded that, due partially to their significant lack of human resources, the monarchies of the Gulf, and Saudi Arabia in particular, will not be able to rely on their own armed forces to guarantee their security in face of the more severe threats.
Unique Export Opportunities for Western Defence Industries Since the end of the Cold War, there has been a significant drop in European defence budgets. As a consequence, Europe, today, has more defence manufacturing firms than can be sustained by a very limited domestic market demand. The same is true of the United States ; although the US Navy and US Air Force purchased a total of 333 combat aircraft in 1998, they only purchased 24 in the period 1994-1995. Saudi-Arabia, over this same period, purchased 75 American F-15s , guaranteeing jobs and transforming the manufacturer’s turnover, and helping finance further research. For both Western governments and competing defence manufacturing firms, it was imperative to protect their defence industrial base. This was only possible by looking to the export market, and, in particular, the rich Gulf states.
In contrast to Western Europe and the US, the Middle East did not experience a decrease in its defence budgets at the end of the Cold War. The arms export race for the GCC market lent itself not only to the use of political pressure to sell, but also to offer the client what he wanted without taking into account either the operational efficiency or strategic utility of the purchases. A precedent was set for sales of poorly adapted equipment to the GCC countries with the primary objective of maintaining domestic production lines, reducing operating costs and maintaining skilled employment in the producing country.
Exports also allowed US industry to overcome a technological rupture. Exports often help extend the production life of weapons systems. Numerous weapons systems - AWACS (Airborne Warning and Control System) surveillance airplanes ; F-14, F-15, F-16 combat aircraft ; M1 armoured fighting vehicles, armoured Bradley personnel carriers, Patriot surface to air anti-aircraft missiles - are all technological products of the 1970s ; by the late 1990s, construction of these weapon systems for the domestic market had ceased or was coming to an end. The next generation of significantly different types of equipment, however, would not be ready until around 2010. To overcome this break in production and manufacture, US defence manufacturers focused on adapting and developing these products for export, which allowed them to maintain their production facilities.
For example, Kuwait received its M-1A2 tanks in 1994, one year after the company that produced them, General Dynamics, had completed the last tank ordered by the US Army. The assembly site of this Ohio-based firm is only in operation due to orders from Kuwait and Saudi Arabia. Along the similar lines, the Kuwaiti purchase of the F-18C/D combat plane not only helped to reduce the unit cost of production of these combat aircraft but also partially financed research for the new F-18E/F used today by the US Navy (most notably in the invasion of Iraq in 2003).
Lockheed Martin’s F-16 production chain continues, principally as a consequence of orders from the United Arab Emirates, Greece and Poland. The innovations and technological research for the F-16 E/F model purchased by the United Arab Emirates - a model that has the highest performance in its category of which 4,000 copies have been purchased over 30 years - was also financed by the UAE government. This new model can also be re-exported without additional investment.
BITTER COMPETITION FOR THE GCC MARKET
The three principal arms exporting states toward the region, the United States - which is the most dominant - the United Kingdom (UK) and France have different sales policies.
The US has the advantage of maintaining a robust state-to-state relationship through its Foreign Military Sales (FMS) and Excess Defense Articles (EDA) agencies. This relationship creates a political and security bond between both parties that goes beyond purely commercial ties. Consequently, US sales to the GCC countries increased to more than $97 billion between 1990 and 2002 .
Sales under the FMS label are perceived as strategic co-operation programs between the US military and the armed forces of the country importing the equipment. Therefore, the US military is deeply involved in the process, offering more than a simple commercial sale. This includes : personnel training, technical assistance, equipment modernization and the establishment and teaching of US military doctrine, in addition to political support.
The US also often offers Excess Defense Articles at bargain prices or, even, in the form of free military assistance - as, for example in the cases of Egypt, Jordan, and Israel, but also Bahrain and Oman - that decreases the market share of its competitors. Within this framework, the Americans have revealed the full extent of their size and scope, equipment in service and political influence by making available cheaply their surplus military material. They have also made available many types of high performance equipment for the countries with the means to pay, and, for others less well off less advanced equipment, sometimes even second-hand (from their stocks) or reconditione.
It is not uncommon to see the US government simply give away military equipment : for example, the modernised Perry-class frigates were given to Bahrain at the end of 1997 ; Oman, which was often seen as “British turf”, was given 30 M-60A3 tanks by the US in 1996 and a further 20 in 1997 . This ability to donate military hardware is essentially due to the large range of armaments the United States owns and which no other country can offer in comparable quantities. By getting states accustomed to handling US equipment, the client is often tempted to buy the newer version of the same equipment, thereby reducing maintenance and training costs in the process. In contrast, the European defence industry, in particular the French and British, use this same strategy to offering surplus (sometimes even new) equipment, but their means are much more limited, as are the results. France and the UK are constrained by the smaller size of their armed forces when compared to those of the US.
In terms of direct contributions of the US and its competitors to the security of Arab states, it is clear that the latest Gulf Wars, along with the perceived Iranian threat (and Iraqi threat in the 1980s and 1990s) have conferred a long-lasting pre-eminence to the US’s contribution in the region. However, political circumstances and the recent blocking of numerous sales to the Middle East by the US Congress have restricted some US arms exports to the region. For example, the US has repeatedly refused to sell their Gulf allies the most advanced military technology, despite the willingness - and ability - of these countries to pay for it. This has to do with a fundamental policy that categorically refuses to sell weapons systems to Arab countries that are as advanced as those sold to Israel.
This policy includes a range of missiles, combat fighter radar and electronic warfare systems. The sales blocked by Congress have been numerous : for example, the sale of F-15 fighter aircraft to Saudi Arabia in 1978, (which incidentally opened up the opportunity for the British to sell their Tornadoes) ; AWACS surveillance aircraft ; aircraft with in-flight refueling capacities ; Sidewinder air-to-air missiles in 1981 ; and a wide range of air-to-air, and ground-to-air and air-to-sea missiles in 1986. The sale of 16 US Army Reserves Black Hawk UH-60L helicopters to Kuwait in 1996 was delayed for a long period of time on account of the model’s very advanced laser equipment.
When faced with these restrictions, the GCC states always turn toward other arms suppliers, most notably the French and the British. Both these European states are heavily dependent on export markets and the Middle East as a whole is their largest export market. For example, in 1998, four countries (in decreasing order of magnitude : Saudi Arabia, France, the United Arab Emirates and Germany) accounted for 76 percent of Britain’s arms exports, whereas between 1993 and 2003, Saudi Arabia and the UAE together represented nearly 30 percent of France’s registered orders.
Whilst French and British suppliers are indispensable to the Gulf States because of their arms exports and technological availability, they provide neither sufficient political clout nor the vital security guarantee that is provided by the US. In contrast with to the US, which favours state-to-state relationships through the FMS, France has chosen in the past to leave its defence industry to prosecute arms exports in a more efficient commercial manner. In so doing, France has been unable to fully involve the respective state services that offer buyers a specific political guarantee. Nevertheless, French exports, despite their apolitical nature, have been able to compete with their American and British counterparts in the Gulf. Several major French contracts were, however, presented as being a succession of commercial “coups” in conjunction with favourable, timely, but apolitical, economic policies. The absence of political guarantees of French state-to-state relations with the GCC appears paradoxical, however, since France has a strong and centralised state structure and substantial public ownership of its defence industrial sector.
Kuwait and the United Arab Emirates, in particular, have appealed numerous times for a review of the France’s approach to defence sales. These requests have long been ignored as French defence companies have been hesitant to become involved. Nevertheless, France has, at least in principle, state-to-state programs with Saudi Arabia. In 1974, SOFRESA (Société Française d’Exportation de Systèmes d’Armement) was created to deal with and negotiate large contracts with Saudi Arabia. SOFRESA’s mandate was to ensure co-ordination between the different French defence companies to be able them to negotiate with Riyadh for the signing of the Shahine contract. This was followed by the al Thakeb contract in 1986, worth more than $6 billion, for the Crotales NG ground-to-air missiles for air defence, as well as for successive contracts to supply AMX-30 and AMX-10 tanks, and Sawari (Lafayette) stealth frigates .
In the past few years, awareness for the need of a French political umbrella has increased. Consequently, the SOFRESA Agency has further developed its role in the negotiations for the recent French contracts in the Gulf. Moreover, all major negotiations are preceded by an official visit of the Defence Minister to the country in question (for example, Defence Minister Alliot-Marie was in Oman for the NH 90 helicopters contract) or by promises of forming a “strategic partnership” (as, for example, with the United Arab Emirates). It is noteworthy that, similarly, the United Kingdom demonstrated that it had good co-ordination between its defence companies when it competed with the Tornado for the Al Yamamah combat aircraft contract with Saudi Arabia.
France still holds an important political card. The acquisition of French equipment corresponds to a political willingness of Gulf States both to purchase equipment that is not American (and now also that which is not British following the 2003 invasion of Iraq) and to diversify their supply, while maintaining a technical superiority. Although the Gulf States see the US as allies, the US lacks confidence in its Gulf counterparts and, therefore, tends not see them in quite the same light. The French and other European states, however, do see the Gulf States as allies, despite the fact that they simply do not have the political weight to treat them as such. This gives them a particular advantage, especially when seen in the context of European defence co-operation.
In response to the Gulf States’ need for high-tech military equipment, France has sold the French armed forces’ equivalent (i.e. front-line) weapons to the armed forces in the Gulf, unlike the US. France did not hesitate to produce the Mirage 2000-9 - an advanced aircraft in the Mirage 2000 fighter range - at the United Arab Emirates’ request. It was ‘made to measure’, following UAE instructions and equipped with the MBDA-made long-range Scalp-EG cruise missile. This missile was qualified by the French Air Force for the first time in March 2004 and by the UK Royal Air Force during the war in Iraq . The same situation can be found in Saudi Arabia, where the French sold three stealth Lafayette frigates equipped with the Aster-15 surface-to-air anti-missile system, also made by the European missile manufacturer, MBDA. These missiles have only recently been installed in the Charles de Gaulle aircraft carrier.
Until the European defence industrial base as a whole has been rationalized and consolidated, the US defence industry will maintain its advantage in terms of competition and trade over the individual national defence industrial sectors within Europe. Europe currently produces three very competitive fighter aircraft in world markets : EADS’ Eurofighter, Dassault’s Rafale and the BAe Systems/Saab’s Gripen. Even with the advantage of equivalent technological transfers to the Gulf States, the gradual development of intra-European defence co-operation and the creation of the European Defence Agency, Europe still cannot offer the Gulf states the political support they demand.
THE ROLE OF SECONDARY SUPPLIERS
Although there is a multitude of active secondary defence suppliers (principally the US, UK, and France, but also Germany, Italy, Spain, the Netherlands Norway and Sweden) they currently play a very modest role in the Gulf arms market. Neither their political weight vis-à-vis the Middle East nor their technological autonomy gives them the necessary advantage. Despite well-known companies such as Krauss Maffei in Germany, Finnemeccanica in Italy, CASA and Bazan in Spain, and Saab in Sweden, these states cannot offer the level of military co-operation required by the Gulf states. Aside from the top three Western countries for defence exports, these secondary suppliers are moderately successful in other domains, such as in naval armaments, where the competition is more open. The market for fighter aircraft is too strategic for a secondary defence industrial actor, as it binds two states together for more than 30 years in a key area of air superiority.
As for the Russians, the arms trade is even more important, where it is considered an important means to extend its political and diplomatic influence, both in the Gulf and elsewhere. Moscow’s sale of arms to Iran gave Russia indirect access to Gulf affairs. Wanting to extend its influence in the Gulf beyond Iran, Russia then looked to the GCC states. It started with the United Arab Emirates, who were looking to diversify their defence suppliers and maintain a certain degree of independence from Saudi Arabia and the US. Abu Dhabi had already ordered 500 armoured personnel carriers (BMP-3 IFV) in 1992, which were delivered between 1992 and 1996. This delivery opened the way for the Russian defence manufacturers to show the quality of its products to GCC buyers. Kuwait then made the same choice, purchasing 76 BMP-3 IFVs, at the bargain price of US$800,000 each, to compliment the 254 vehicles it had purchased from the British firm GKN. With its technological capacities, Russia can be seen as having opened up the Gulf to new suppliers and the recent talks about a sale of anti-missile S300 systems to the United Arab Emirates is proof of this development.
THE DECISION-MAKING PROCESS
For a long time, defence manufacturers were able to sell virtually what they wanted in the Gulf region, often taking advantage of, and profiting from, their clients’ lack of knowledge. It would not be an exaggeration to say that these Western defence companies themselves evaluated their clients’ needs in terms of equipment, systems and support, and the Gulf States simply signed the contract.
Recent contracts clearly show that this situation has drastically changed. The UAE purchase of the long-negotiated American F-16 fighter aircraft from Lockheed Martin and the Mirage 2000-9 combat aircraft from France’s Dassault are illustrative of this change. Offers put forward by defence manufacturers are scrutinized and followed by long and detailed negotiations with the aim of making the most of the West’s security guarantee and to get the best and operationally relevant product possible at the best price. A new generation of military personnel has reached senior command and has been educated at the universities and military colleges in the West. These new decision-makers are aware of the needs of their respective states as well as the range of equipment available. They also know, above all, how theycanprofitbyplayingthe competition off one against another.
Nevertheless, behind this decision-making dynamic, certain aspects of the region’s sociopolitical structures remain important. Decisions are also shaped by different local interpretations of the external threats against which they must arm themselves. Furthermore, they are well aware of the growing importance of domestic threats, which create new capability requirements and new defence systems.
THE MONOPOLISTIC ROLE OF TTHE RULING FAMILIES : THE CASE OF THE SAUDS
According to Lebanese author, Georges Corm, the concept of “Islamic Arab” should not be taken as a given. It does not allow one to understand the ethnic complexities of Arab society, which ranges from the Berber Arabs in the Maghreb, Aramaean Arabs in Machrek and Egyptian Arabs to the Bedouin Arabs in the Gulf States. This Bedouin component remains one of the most important factors in the choice of defence equipment in the GCC states, where the princes from different genealogies and tribes have varying degrees of influence and make for heterogeneous political choices.
The political structure in each of the Gulf states is shaped by one family. This is particularly true of Saudi Arabia, the United Arab Emirates, Bahrain and Qatar. As a consequence, defence policies and procurement decisions are generally the result of the autocratic decision of a single man or, at most, a small group of influential men from within the reigning family. At the centre of this decision-making group, tribal and clan loyalties and the genealogical structure of the royal family play important roles in defining who influences, and decides, what.
The Bedouin structure shows itself in the division of the intra-GCC alliance into two distinct groups : those GCC countries belonging to the northern Gulf and those in the south. This grouping, primarily along tribal lines, explains the reasons for certain international alliances and justifies particular procurement decisions. For example, the Sabah, the Emirs of Kuwait, belong to the Utub tribe that originated from the Anza tribe. The ruling family in Bahrain, the Kahlifas - and the Sauds from Arabia - come from the same Anza tribe. One can, therefore, understand the same unconditional alliance these three countries have shared with the US. At the same time, the states of the southern Gulf are focused more strongly toward Europe : Qatar and the United Arab Emirates purchase the majority of their equipment from France, and Oman has for a long time purchased almost exclusively from its former colonizer, the UK. Since the end of the 1990s, however, these three countries have tried to diversify the sources of their arms purchases.
The fight for influence within the ruling royal families has certain repercussions for armament policies. The most interesting country to demonstrate this phenomenon (that is spread in most of GCC countries) is Saudi Arabia, which has the largest weapons budget as well as the largest royal family in the region, with more than 7,000 members. Within the Saudi Royal family, there is an important rivalry between the Crown Prince Abdallah, the de facto ruler of Saudi Arabia, and now King, and Prince Sultan, the head of the National Guard and Defence Minister, who is second in-line to the throne and head of the Sudairi, or the “Clan of Seven” (i.e. the seven sons of the founder of the kingdom Abdel Aziz Ben Saud).
The late King Fahed and King Abdallah and their five brothers are the sons of Assa bent Ahmed Sudairi. She was the favourite wife of the founder, so much so he married her twice ! When King Khaled died in 1982, the seven Sudairi divided all the top level positions between them : Sultan got Defence ; Na’if, the Interior Ministry ; and Sulmane was awarded Governorship of the capital Riyadh and Nejd, the historic heart of Arabia.
Abdallah, the Crown Prince of King Fahd, is not a Sudairi, but belongs to the Shammar tribe, who were nomads roaming widely between Saudi Arabia, Jordan, Iraq and Syria. The Shammar fought the Saud before surrendering. Prince Abdullah has earned a reputation as a conservative ascetic and is a nationalist Arab. He has never been considered corrupt by the population, unlike other members of the al-Saud family. He is a man of the tribe and a relatively more pro-American leader than his reactionary Sudairi half-brothers.
The rivalry between Abdallah and Sultan openly manifested itself during the 1990 Gulf War, when Abdallah implicitly opposed the US intervention. Sultan, the Saudi Defense Minister, conversely both wanted and encouraged the invasion. After King Fahd’s illness in 1995, Abdallah became the de facto ruler of Saudi Arabia. Upon King Fahd’s death on 1 August 2005, Abdallah succeeded to the throne and immediately appointed Sultan as Crown Prince, thereby avoiding an immediate power struggle within the royal family. Though Abdallah is considered to have a close relationship with the US, he nevertheless refused to grant the US direct access to Saudi bases during the invasion of Iraq in 2003.
Procurement decisions for the security forces of the Ministry of the Interior Minister (police, border guards, etc.) are made by the conservative Prince Na’if ben Abdel Aziz, the Interior Minister since 1975. Procurement for the National Guard has largely escaped Sudairi hands, since Abdallah, as Crown Prince, was the head of the National Guard since its creation in 1963.
The National Guard’s importance is that it was created to protect the royal régime and its interests, including protecting strategic sites such as oil installations. The National Guard is made up of two separate forces : a large group of 60,000 men and a smaller core force of 20,000 men originating from Bedouin tribes such as the Otaiba and Qahtani, who can be mobilised quickly. The men of the core force are called the “White Army”, a name given to them because they wear the white robes of the Bedouin. As the Head of the National Guard, Prince Abdallah has been able to win the backing of the tribes, something that the Sudairis in principle do not have. However, basic recruitment of core units is fraught with inter-ethnic and tribal rivalries. Few men are recruited from the Hijaz region, one that has been opposed to the Sauds since they came to power in the 1920s and 1930s.
PROCUREMENT POLICIES LINKED TO THE PERCEIVED THREAT FROM IRAN
Another factor that influences the decision-making processes in the GCC states is that of geopolitical concern : the enemy and his military capabilities. Gulf States today are purchasing more specific weapons to counter specific threats. The six GCC countries see their principal threat to be that from Iran. In response, they have, on different scales, looked to acquire weapon systems to defend themselves against Iran’s arsenal, in addition to the security guarantee they have solicited from the West.
Why this fear of Iran ?
Well before the GCC countries perceived the Islamic Republic of Iran - which emerged in 1979 - to be a threat, they had already considered Iran under the Shah as a danger. In 1925, the Shah of Iran, General Riza Khan, claimed the sovereignty over the Bahrain archipelago. The United Kingdom refuted this claim. During the 1950s, with the development of the region’s oil production, the US considered Iran to be the police force for the Gulf. In close collaboration with the US, Iran was able to put in place ambitious military programs and steadily increase its defence budget. With a large population, Iran was able to equip more than half a million men under arms. The Shah then took advantage of a military vacuum left by Britain’s withdrawal from the region to occupy the Straits of Hormuz islands of Abu Moussa and then the Two Tunbs in 1973, which hitherto had belonged to the Emirates of Sharjah and Ras el Khayma. The Shah reiterated his claims over Bahrain and increased attacks on Iraq in the border region of Shatt al-Arab.
The régime of the Ayatollah Khomeini that emerged after the fall of the Shah declared Iran to be the defender of all Shi’ites and wanted to export its doctrine. The Shi’ites are a significant component of the populations in most Gulf States : principally, Iraq, Saudi Arabia, Kuwait and Bahrain. The Khomeini Islamist Revolution’s vision was the opposite of that held by the rest of the region. It was revolutionary, republican and anti-monarchy, whereas the Emirates of the Gulf were conservative and pro-Western.
Following the end of the Iran-Iraq war, Iran began to rebuild its arsenal. The Iranian Army purchased an estimated US$ 7.8 billion in armaments in 1987-1990 and a further US$ 2 billion between 1991 and 1992 . Every year, the Iranian Navy brings together approximately one hundred war vessels and tens of thousands of men to take part in its Nasr training exercises. One of the principal characteristics of the Iranian deterrent is its power to block the entire length of the Gulf, thereby bringing navigation to a halt. This could, in the short term, paralyse Western and Asian economies. This is, of course, in addition to Iran’s Shehab 3 missiles that was first tested in July 1998. The latter’s range could allow it to target the GCC countries, as well as US bases in the Gulf, Israel and Turkey.
It is not easy for the United States to prevent Russian arms exports to Iran, given the high level of US exports to other states in the Arab-Persian Gulf. Furthermore, according to many analysts, the US benefits from the portrayal of Iran as a threat, as a détente would impact on the level of defence armaments purchases of the other GCC states from Western industry.
The Iranian Arsenal
The perception of Iran as a military threat has solidified over the last few years due to suspicions of Iran’s development of a nuclear bomb, as well as the purchase in the mid 1990s of six Russian Kilo Class submarines capable of blocking the waterways through which passes 40 per cent of the world’s oil . Western industries have profited from the Russian sale of submarines to sell more equipment to other Gulf States, in particular Saudi Arabia and the United Arab Emirates.
Faced with this threat and motivated by its border dispute with Iran, the United Arab Emirates has embarked on an important armament program, as demonstrated by modernisation and increase in the number of its combat multi-role aircraft to a total of over 140. The UAE has purchased 30 Mirage 2000-5, standard 9, and 32 more 2000-9 from France, in addition to 80 American F-16E/Fs. These are some of the most advanced aircraft in the region and are technologically superior to any Iranian combat plane if not to any other Arab fighter aircraft available in the region. Moreover, they are specially equipped to be able to penetrate deep into Iranian territory, with extra fuel tanks, active radars, Storm Shadow-Scalp/EG cruise missiles, etc.
Following the Iranian Kilo-Class submarine purchase, the United Arab Emirates hastened to order anti-submarine frigates, in addition to rapid, agile, efficient and heavily-armed maritime patrol aircraft. It has also developed substantial anti-submarine means, including five Super Puma helicopters with anti-submarine capabilities and seven Panthers ordered from Eurocopter and delivered in 1998 armed with anti-ship missiles. It also has the Spanish-Indonesian Casa CN-235s for maritime patrol and several Hawkeye EAW aircraft.
In 2000, the United Arab Emirates placed an order for the Russian S-300 anti-missile missile system to counter the threat of Iranian Scud missiles. The Russians evidently sold the missiles at a lower price than the American Patriot missiles, in exchange for Abu Dhabi writing off the Russian debt.
Since 11 September 2001 and the rise of anti-Americanism sentiments in the region, the Gulf states, fearing a US withdrawal from the Gulf, are looking to protect their interests themselves and to decrease their security reliance on the West. At the same time, Saudi Arabia’s response to the Iranian threat seems less clear, as it is still counting on the US to intervene in the event of a conflict with Iran, an intervention that is much less certain than it arguably was in the past.
INTERNAL THREATS INCREASINGLY INFLUENCE DEFENCE AND ARMAMENT CHOICES
Bahrain is a perfect example how internal threats influence defence procurement policies. The reigning Sunni family governs a predominantly Shi’ite population, whose origins are often Iranian. The Khalifas of Bahrain have made the decision to rely on Sunni Saudi Arabia to provide for their security.
A great socio-economic disparity exists between the Sunni élite and the Shi’ite population. Despite a GNP estimated at us$16,900 per capita in 2004, the distribution of the country’s revenues remains at the discretion of the Sunni élite and Shi’a are excluded from armed forces. For many years, political tensions between the Sunni élite and the country’s Shi’ite majority have threatened to ignite into civil war (especially in 1995). In that event, Iran would have attempted to become involved in the name of the Shi’ite majority. This risk helped Bahrain receive favoured and exclusive US military aid, including large amounts of free military equipment, and to be able to purchase weapons that had previously not been available.
Moreover, it is said that there is a secret agreement between Saudi Arabia and Bahrain that stipulates that Saudi forces can be rapidly deployed to Bahrain in the event of a Shi’ite uprising. The 25-kilometer causeway connecting the island to Saudi Arabia would most certainly assist any rapid intervention by the Saudi military. Saudi Arabia fears that an uprising in Bahrain could prompt unrest among its own Shi’ite minority. Certain reports also indicate that Saudi Arabia discretely helped Bahrain build up its military arsenal, both in terms of financing certain purchases and in direct donations of military equipment.
Islamist opposition to the current political regimes
The GCC countries are also faced with the domestic threat of radical Islamists, particularly prevalent in Saudi-Arabia and, on a lower scale, in Kuwait and Oman. It has also been seen in Qatar, with the 20 March 2005 suicide car bombing near a theatre. Since 1995, and especially after 11 September 2001, terrorist attacks have been multiplying in Saudi Arabia. Many presume that al-Qaeda in the Arabian Peninsula have infiltrated the Saudi military, particularly in the National Guard, despite the fact that it has the smallest number of foreign mercenaries. Fears of infiltration are justified by November 1979 insurrection of Mecca that nearly overthrew the Sauds. Members of the military were alleged to have helped the insurgents store weapons in the basement of the Great Mosque, which allowed them to hold out for many weeks.
There are various ways to infiltrate Saudi territory and the military, including through the Pakistani mercenaries, some of whom have returned from Afghanistan. Moreover, Saudi Arabia’s 6,500 kilometers of land and sea borders are porous and difficult to control. Although the Saudi socio-political system is favourable to the domestic development of fundamentalist cells, many of its surrounding states export experienced jihadists, including the Yemen (1,500 km of shared border) ; Iraq after Saddam Hussein (800 km of shared border) and, on a smaller scale, Jordan (750 km of shared border).
In an attempt to stop border infiltration, the Saudi Minister of the Interior negotiated a colossal contract with a consortium, headed by the French electronics defence company Thales, of over US$9 billion for a complete command, control and intelligence system (C4I) to survey and protect Saudi Arabia’s borders. This system - nicknamed ‘MIKSA’ - includes acoustic, seismic and magnetic systems, 225 radars linked to a satellite, infrared sensors to detect the movement of people and vehicles in border zones, as well as reconnaissance aircraft, approximately 20 helicopters, 400 border guard posts, and military barracks to house up to 20,000 men.
Although initially discussed in 1990, the actual specifications of this system were not seriously studied until the beginning of 21st century, following the increase threat of Islamist activism in Saudi Arabia. The MIKSA contract, whose full name is Saudi Border Guard Development Program (SBGDP), illustrates a marked development in the negotiation of armaments contracts in the Gulf, particularly in Saudi Arabia. As Saudi Arabia was motivated by the Islamist threat to sign the contract, so France has also adapted its export strategy. The concept of “strategic partnership” is not longer limited to the United Arab Emirates, but now extends to Saudi Arabia. Many French officials used the idea of partnership to convince Saudi negotiators. Speaking of state-to-state negotiations, President Jacques Chirac removed the French Minister of the Interior from negotiations with his Saudi counterpart, Interior Minister Prince Naïf - one of the “seven Sudairi” who, according to some sources, renegotiated the entire contract from scratch - and took control of the dossier himself, and directly negotiated with the then Crown Prince Abdallah during his visit to Paris in April 2005.
The Americans, however, are putting pressure on Saudi Arabia to divide the contract between the numerous parties and call for bids. Whether or not this happens will demonstrate whether or not Saudi procurement policies have indeed changed.
Due to the current ambiguity of US policies toward the Gulf since 11 September 2001, GCC countries are beginning to question the availability or reliability of the American security umbrella. This is particularly true of Saudi-Arabia. The GCC states are currently re-evaluating their internal security priorities, while also looking toward domestic political reforms. As a consequence, Gulf defence procurement policies might be considered to be in a transitional phase. Currently, defence procurement in the region shows two general tendencies that might lead to new future policies.
On the one hand, and in the short term, most GCC states are taking a “wait-and-see” attitude, even though the price of oil has been oscillating around US$50 the barrel and has now soared in August 2005 to a record price of US$64. Orders for military equipment that are linked to regional security have been in steady decline. Many Gulf States, however, had already placed their orders, especially for combat aircraft : 22 F-16s for Bahrain ; 12 F-16s and the modernisation of its British Jaguar ground attack aircraft for Oman. Qatar, a small state but one of the richest (it has the world’s third largest gas reserves), seems to have no new projects planned but seems to be waiting to get a clearer understanding of US intentions before placing new orders. Although Qatar’s negotiations for the sale of 12 Mirages 2000-5 to India were completed, the purchase of 12-15 fourth generation combat aircraft seems to be on hold.
At the same time, Saudi Arabia, which needs to replace a hundred or so old F-5s, is leaning toward modernising its fleet by adding new capabilities such as Storm Shadow/Scalp cruise missiles from MBDA or its US equivalent that recently did tests along the lines of those on the British Tornado GR.4. But the negotiations are also underway for the purchase of 48 French Rafales, with the possibility of purchasing 48 more. In that event, the Saudi Air Force would therefore be composed of fleets of air combat aircraft from the US (F-15s), UK (Tornados) and France (Rafales).
On the other hand, other countries such as the United Arab Emirates and, to a lesser extent, Oman are not waiting but seem to be trying to achieve real, if relative, defence autonomy through the acquisition of sophisticated and efficient military equipment. By the end of 2007, the UAE will have 62 Mirage 2000-9, the highest performing Mirage (equivalent to the Rafale Standard 2) and 80 F-16 E/Fs that currently have no equivalent model, unlike the 4000 F-16s sold over the last 30 years throughout the world.