UAE Hosts World's Largest Defense Show

by Shawn L. Twing

The United Arab Emirates hosted its biannual International Defense Exhibit (IDEX '97) in Abu Dhabi March 16-20, with 747 defense companies from 53 countries attending to show their wares. Aside from hundreds of booths exhibiting products ranging from Swiss army knives to main battle tanks, there were live-fire demonstrations featuring advanced military hardware, simulated rescue operations, and a flotilla of warships berthed in Abu Dhabi from the United States, Germany, Britain, France, Italy and the UAE.

The massive defense show, the largest of its kind in the world, once again demonstrated the importance of the Gulf Cooperation Council (GCC) countries (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE) to international defense companies. These six countries are expected to spend up to $80 billion on defense procurement in the coming decade, 10 percent of the worldwide total, making them the crown jewels of the international arms market that has endured massive downsizing since the end of the Cold War. It is their enormous oil and gas resources and their proximity to Iran and Iraq, twin sources of perennial concern to themselves, other countries in the region and the U.S. and its NATO allies, that motivates the GCC countries to make such large defense expenditures.

The UAE, for example, spent $6 billion on new arms between 1987 and 1994 and plans to spend up to $7 billion more to modernize and improve its armed forces during the next five years. The two largest purchases will be for advanced combat aircraft and for next-generation naval vessels.

In what may be the last major purchase of its kind this century, the UAE is planning a multibillion-dollar buy of up to 80 fourth-generation combat aircraft. In the runup to IDEX '97 there were only two competitors for the contract: U.S. defense giant Lockheed Martin's F-16 (block 60), and the Rafale, made by the French Dassault firm. UAE officials announced at IDEX that they also will evaluate the Eurofighter 2000, built by a consortium of defense firms from Britain, Germany, Italy and Spain. A decision on the contract is expected this summer.

The UAE also is planning to purchase up to six ocean-capable patrol boats with an estimated value of $1 billion. Competing for this contract are six companies from five countries, including two from the United States (Newport News Shipbuilding and Halter Marine). The front-runner for the competition appears to be Vosper Thornycroft of the UK, which already has delivered several advanced warships built to the demanding specifications of other GCC navies.

Saudi Arabia also is planning major arms purchases before the end of the century. One such purchase for up to 250 main battle tanks has armor builders, including General Dynamics Land Systems of the U.S. which makes the M1 Abrams tank, scrambling to make the best offers in hopes of eventually winning the multibillion-dollar contract that will employ tens of thousands of workers and keep production lines open for several years.

Once an almost commonplace event at the height of U.S.-U.S.S.R. Cold War rivalry, these massive arms purchases are virtually a thing of the past. Big sales, like aircraft and boats to the UAE and tanks to Saudi Arabia, have nearly disappeared, and arms manufacturers are desperate to find new customers. To the benefit of the GCC countries and others looking for new weapons, the end of the Cold War has created a buyers' market for defense products.

One incentive used by defense companies to win contracts are offsets, industry parlance for spending some of the expenditures for arms sales in the buyer's own country. Most of the offsets involve transfer of technology and development of indigenous industries to provide parts and maintenance for the weapons systems that are being purchased. This eventually helps create viable defense industries within the recipient nations.

Saudi Arabia's International Systems Engineering Company, for example, is a Saudi-American joint venture created under an offset program with the Seattle, Washington-based aerospace leader, Boeing, Inc. ISEC's sales grew by 50 percent annually from 1993 to 1995, with growth reaching 200 percent between 1996 and 1997. The company made nearly $13 million in sales in 1996 and this is expected to almost double in 1997, according to ISEC projections published by Defense News. Other options for offset arrangements include the development of local industries unrelated to defense but financed with capital from foreign defense companies and staffed primarily by local workers.

A walk around the various pavilions and outside display areas on IDEX exhibition grounds offered awesome glimpses of the world's most advanced defense products. Among the myriad offerings were American Patriot missiles, French main battle tanks, British anti-ship missiles and Russian rocket launchers and artillery. Countries with smaller arms manufacturing industries, including the UAE, also had products on display.

Also impressive for visitors to IDEX '97 was Mina Zayed, Abu Dhabi's huge new deep-water port on the Arabian Gulf. The berthing area was dominated by the British aircraft carrier HMS Illustrious, which was accompanied by the HMS Richmond and other large warships including France's advanced design, new-generation Lafayette frigate. Representing the United States Navy was the cruiser USS Paul Hamilton.

To accommodate some of the estimated 45,000 conference attendees, the UAE opened its new Officers' Club, a massive 519-bedroom facility that will serve as a training nexus for future generations of Emiri officers. Dwarfing other such establishments, this officers' club occupies a land area greater than the Pentagon and houses an Olympic-class sports facility, several libraries, conference rooms and more. Workers literally were putting the last coats of paint on the interior as guests arrived, in keeping with the UAE's decision to accelerate the opening of the facility when it became clear that all of the UAE's many other first-class hotels combined couldn't accommodate all of the guests arriving to attend IDEX '97.

What's next for the UAE after hosting the world's largest defense show? Officials in Abu Dhabi have announced that next year they will host TRIDEX (Triple Defense Exhibit). It will add an air show to an arms show similar to IDEX and will specialize in defense communications, logistics, training and electronic warfare.