April 1989, Page 35

Mideast Military Markets

By Brendan McNally

Last Sale of the Century?

Battle lines are currently being drawn over what might be the century's last major arms sale. Saudi Arabia is currently looking for a new fighter plane, as its fleet of 110 Northrop F-5s will need replacement within the next 10 years. Whichever aircraft is picked by the Saudis will be flown well into the 21st century. The deal is estimated to be worth $5 billion.

The Saudis have already been offered a 20 percent share in the European Fighter Aircraft (EFA) program and 50 percent of France's Rafale project, but it is widely believed that they want the American McDonnell Douglas F- 18A, a fast, heavy, twin-engine fighter capable of maritime operations.

Though the Saudis have suffered repeated humiliations in past attempts to buy US defense equipment, Saudi Ambassador Prince Bandar Bin Sultan says, "The Saudi government still prefers to buy American." He adds, however, that "We are not going to go through a lot of problems."

Rather than reject the European offers, the Saudis are likely to hold them as a continuing option while they explore prospects for a US purchase. Such a sale could mean the creation of 200,000 American jobs.

There is evidence that the Bush administration plans to take a stand on the issue, arguing that further congressional opposition to sales by US companies of defense equipment to moderate gulf Arab states costs the US badly in needed jobs and foreign exchange, and results in those countries purchasing arms in Europe or even from the Soviet Union. During his confirmation hearing, Secretary of State James Baker told the Senate: "It's your responsibility not to rule out a particular sale before we have a chance to make our case."

The administration has already informally announced its willingness to supply the Saudis with 315 M-1Al tanks worth an estimated $1.5 billion.

Prince Bandar is the son of the Saudi Defense Minister, Prince Sultan, and is influential in defense acquisition matters. Though he has yet to make a formal request for either the F-18A or M- I A 1, he has met with US industry officials as well as local community and union leaders to make his case. He has visited McDonnell Douglas in St. Louis, MO; Lockheed in Calabasas, CA; and FMC Corp. in San Jose, CA, where he signed a $550 million contract for the purchase of 200 Bradley fighting vehicles, representing the first foreign sale of the Bradley.

Jordan Tornado Deal Off

Jordan's planned purchase of eight Panavia Tornados fell through when Kreditstalt fur Wiederaufbau (KfW), a bank owned by the West German government, withdrew its offer of support. KfW was one of four independent European banks providing $20.77 million to finance the deal.

Jordan had originally decided to purchase the Soviet-built MiG-29, but backed out after receiving American encouragement to buy the Tornado. The Panavia Tornado, an attack fighter built by a French-German-British consortium, is presently being flown by Saudi Arabia. Its sale to Jordan represented an important second sale within the region.

KfW withdrew the offer after an uproar in the West German Parliament in which the government was accused of aggression against Israel.

Israeli SDI Update

Israel Aircraft Industries (IAI)and Lockheed Missiles and Space Co. have signed a joint venture agreement to coproduce and market the Arrow antitactical ballistic missile (ATBM). The Arrow ('Chetz' in Hebrew) is being designed to intercept and destroy incoming missiles.

The Pentagon awarded the $158 million contract to IAI in July as part of its Strategic Defense Initiative (SDI). An additional $31.6 million is to be provided by the Israeli Defense Ministry. The contract will cover a concept development phase with flight testing scheduled for late 1990. The Arrow currently absorbs 90 percent of the SDI funds committed to Israel.

Brendan McNally, a Washington, DC-based free-lance writer, specializes in Middle East and military affairs.