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07 April 2021

How advanced tech boosts defence localization efforts within the GCC

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The transfer of defence material and technology between the West and the GCC has traditionally been a one-way street.

This arrangement has greatly benefitted international defence companies as GCC countries, particularly the UAE and Saudi Arabia, are some of the biggest spenders on defence worldwide. 

UAE defence spending was estimated at $19.8 billion in 2020. Between 2010 and 2019, it is estimated that between 15 - 16 percent of the UAE’s annual defence budget was spent on procurement with foreign contractors. Saudi Arabia was estimated to spend $48.5 billion on defence in 2020, the largest military spending per capita in the world.

However, this is changing as Gulf countries take progressive steps to localize defence manufacturing to diversify their economies, create jobs, and reduce their reliance on imports.

To give some perspective, in November 2019, the UAE consolidated 25 indigenous, state-owned defence companies into one conglomerate EDGE, which has $5 billion in combined revenue. Saudi Arabia on the other hand formed the Saudi Arabian Military Industries (SAMI) in 2017 as part of the Vision 2030 programme to boost localization of manufacturing by up to 50 percent.

These efforts are starting to bear fruit with the UAE Armed Forces signing deals worth Dhs20 billion with local and international companies already in Q1 of 2021.

Automation
Advancements in technology, particularly automation and AI, support GCC countries efforts to apportion a piece of this very lucrative pie.

Artificial Intelligence (AI) based military systems such as cybersecurity, unmanned aerial vehicles and drones are the most in-demand products and technologies globally but particularly in the UAE, where an AI application was locally developed by students and successfully used by a prominent defence company in the USA. 

Last year, EDGE unveiled the first drone to be made in the UAE. Garmousha, a vertical take-off and landing (VTOL) drone that resembles a helicopter, was designed by Adasi, a subsidiary of EDGE, in a deal with the UAE Armed Forces.

Advanced technology allows GCC countries to build state-of-the-art air defence capabilities at a fraction of the cost.

The F-35, of which the UAE has ordered 50, has a sticker price of around $100 million per plane. By contrast, a Predator drone will cost around $16m. And drone technology is developing fast, meaning costs will continue to reduce over time. Meanwhile, the F-35 costs continue to escalate, with no end in sight.

Bottom-up approach
Unlike earlier technologies such as jet engines or nuclear power which were first developed for the military then adapted and for civilian use, AI and robotics have a decidedly bottom-up approach.

In 2017, the UAE Government announced its strategy for AI and became the first in the world to appoint an AI Minister as well as the first to have a dedicated AI university. Last year, Saudi Arabia also announced it will invest $20 billion in AI projects by 2030, a month after announcing its own AI strategy.

The UAE sees AI as crucial in defence says Omar Al Olama, the UAE’s Minister of State for AI and expects to see AI having a major impact on cyber defence, defence logistics and the ability to collaborate internationally.

The synergy between government, academia and industry provides the basis for countries such as the UAE and Saudi Arabia to advance their defence localization efforts by tapping into homegrown capabilities. 

Locally produced systems can better cater to regional-specific threats. EDGE CEO and managing director Faisal Al Bannai has said the conglomerate is exploring AI-powered defence systems, further adding that smarter weapons are needed to tackle the type of asymmetric threats common in the region.

SDF, the investment arm of Tawazun Economic Council and EOS Defence Systems of Australia recently signed an agreement to establish a JV to utilize the latest technologies in design and manufacturing to provide the market a superior Weapon System.1

SDFCEO, Abdulla Naser Al Jaabari commented, “This agreement paves the way for the JV to set up production in the UAE that targets to supply the global market.”

Saudi Arabia on the other hand has signed an agreement with Raytheon in 2019 as the kingdom seeks to build a home-grown industry and localize military spending. Raytheon’s Patriot forms the basis for the Saudi missile defence system.

Saudi Arabian Military Industries (SAMI) are the latest to announce its participation at the Dubai Airshow this year, highlighting Saudi Arabia continuous growing strength in the aerospace and defence industries via participation of its biggest players at the largest Airshow of its kind from the 14-18 November at DWC, Dubai Airshow site. The Dubai Airshow brings together some of the biggest names in aero-defence who will be exhibiting some of the most advanced aviation and military technologies in the world.
 

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