Middle East nations are expected to increase defense
procurement amid rising revenues from crude oil and new regional threats.
A new study cited the Sunni insurgency in Iraq, the Al Qaida campaign
against Saudi Arabia and the Israeli-Palestinian war as triggers for an
increase in Middle East military spending. The report said this would result
in an annual $3 billion increase in
defense expenditures for the region in another three years.
Forecast International said in the study that annual defense spending in
the Middle East will rise to $55 billion in 2007. The Newton, Conn.
consultancy said defense expenditures in 2003 will amount to $52 billion, Middle East Newsline reported.
"The Middle East, which is one of the world's largest single regional
arms buyers, will continue to dominate the market," Forecast International's
senior analyst for the Middle East, Thalif Deen, said.
The report said the largest spenders on military procurement in the
Middle East will continue to be Saudi Arabia. Forecast said the Saudi
kingdom will average more than $18 billion in defense spending annually
The second biggest defense spender will be Israel. Forecast said Israel
will spend more than $9 billion annually.
Iran will spend $4.5 billion annually, followed by the United Arab
Emirates, with $3.7 billion, Forecast said. The report said Egypt will spend
more than $3 billion a year.
Egypt and Israel receive the largest amount of U.S. military aid. Israel
receives $2.2 billion a year and Egypt about $1.3 billion.
"The rise in military spending is also attributed to increased
expenditures on internal security prompted by potential terrorist attacks on
soft targets in the Middle East," the report said.
Forecast said Iraq and Libya will comprise new defense markets over the
next three years. The report cited the installation of a U.S.-backed
civilian administration in Iraq and the removal of United Nations military
sanctions on Libya.
The U.S.-led Coalition Provisional Authority has launched a project to
establish a 40,000-member military in Iraq. Most of the weapons for that
force are expected to be Soviet-origin.
U.S. weapons sales to the Middle East are also expected to rise over the
next three years. The report said U.S. sales declined to $3.7 billion in
2003, down from $5.2 billion in 2002.
But U.S. contractors are expected to increase sales to Middle East
clients to more than $5 billion each in 2004 and 2005. The report said the
increased arms sales are based on a stable oil market in the Middle East.
The report said Bahrain, Kuwait, Oman and the UAE are also expected to
buy additional military platforms from the United States. Over the last two
years, the Bush administration has agreed to sell a range of aircraft and
other systems to these Gulf Cooperation Council states.