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Home > Focus
 
Abu Dhabi’s ambitious military industrial complex in the spotlight

Haseeb Haider / 14 February 2013

Not many people know that Abu Dhabi, which is a leading oil and gas producer and best known for its sovereign wealth funds, has emerged as a defence manufacturer in the past six to seven years.

The opening of a new industrial sector to business has given it a distinction in the Middle East and North Africa, or Mena, region.

The Mena region largely depends on Western defence contractors for acquiring military weaponry of all types in the absence of domestic manufacturing capability.

The development of military industries aims at making the nation self-reliant in this sphere and creates business opportunities for investors with greater emphasis on technology transfers, innovation and product development. The UAE’s achievements in the development of a military power house have given confidence to economic planners and entrepreneurs. — KT file photos by Shoaib Anwer

 

 

According to Frost & Sullivan, the total defence spending in the Middle East countries is expected to exceed $100 billion by 2015.

The defence budgets of the GCC countries and Jordan are expected to reach $80 billion by the same year.

This market is growing steadily, as data from the International Institute for Strategic Studies in London shows that the share of the Mena region amounted to eight per cent of the total global defence spending in 2011.

According to a report from the Stockholm International Peace Research Institute, traditional arms shipments increased by 24 per cent during the period 2007-2011 compared to 2002-2006.

The Congressional Research Service reported that the value of arms transfer agreements with developing countries in 2011 was double that of 2010 and amounted to more than $71 billion. The value of actual arms delivery between countries in 2011 was $28 billion, the highest since 2004.

Abu Dhabi is organising the International Defence Exhibition, or Idex, which will be attended by global defence contractors to showcase their new weapons and technologies. This year’s edition will provide Abu Dhabi an opportunity to exhibit its military industry’s capabilities. Aviation, aerospace and defence industries are among the main engines identified by the Economic Vision 2030 for achieving the objectives of economic diversification in 12 sectors in which Abu Dhabi has competitive advantages that are capital intensive and export oriented mostly to regional and global markets.

Abu Dhabi’s military industrial complex, which comprises more than a dozen industries in the public and private sectors, reflects the vision of the President His Highness Shaikh Khalifa bin Zayed Al Nahyan and General Shaikh Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, who want to reduce Abu Dhabi’s dependence on oil by setting ambitious targets to transform the economy into a knowledge-based economy under Abu Dhabi Economic Vision 2030.

The development of military industries aims at making the nation self-reliant in the military sphere and creates business opportunities for investors with greater emphasis on technology transfers, innovation and product development.

It all started with Abu Dhabi’s aggressive Offset Program Bureau, which in 2002 encouraged global defence contractors to carry out transfer of technology programmes that later created the basic industrial infrastructure required to develop a modern defence industry.

The Offset Program Bureau in the last 10 years has successfully tied up the local business houses with global makers of defence hardware and enabled them to acquire basic industrial knowledge and know-how. The result is very encouraging and enviable, as a large number of industries have been established in Abu Dhabi in joint ventures with global industry giants.

In the past eight years, the country has set up a number of repair and maintenance companies in public-private partnerships and in the public sector to service the military hardware in the use of army, air force and navy. These companies are not only catering to the domestic requirements but are also capable of handling regional business.

Abu Dhabi Ship Building was the first major firm set up to build naval vessels in association with Italy’s Selex Sistemi Integrati and Abu Dhabi Systems Integration, which is involved in the integration of systems and techniques in the fields of defence and security, and electronic systems design, development, maintenance and the provision of an integrated high-level systems through rehabilitation and training of competent citizens.

The modern shipyard is busy constructing corvettes as large as 72 metres and high-speed naval boats for the country as well as for export purposes, giving a clear advantage to the UAE in the defence arena.

Abu Dhabi manufactures Nimr Automotive, a multi-purpose military vehicle, which has applications ranging from tactical missions in harsh environments such as arid deserts to modern urban warfare, deep infiltration missions, reconnaissance, border surveillance, support logistics and riot control.

Nimr vehicles can be employed in many roles, including as an armament carrier, logistics vehicle, ambulance, mobile command and control centre, and as a platform for a wide variety of other uses including conforming to multiple fleet strategies of the armed forces.

Tawazun Holding, a strategic investor that has developed a network of defence industries in a huge complex outside the capital in the last year, has concluded several successful joint ventures to manufacture radars, light guns and other hardware.

Abu Dhabi Autonomous Systems Investments is a manufacturer of air, land and marine systems, and unmanned, remotely controlled vehicles.

Tawazun Precision Industries provides components related to oil and gas, aviation and defence industries. The company has tremendous productivity and service capabilities including design, metalworking, surface treatment and plastic-injection molding and metal testing and maintenance.

Tawazun Holding Company also owns Tawazun Advanced Defence Systems, which manufactures long-range sniper rifles in collaboration with Russia’s Tsar-Cannon.

Caracal International is a manufacturer of light weapons and was established in late 2002.

In cooperation with the UAE Armed Forces, the company has developed a system of modern handguns linked to larger European weapons designers and users. The Caracal system includes complete and compact pistols currently used by armed forces, police and security agencies around the world.

Military industries offer promising business opportunities, which attract foreign investment and contribute to transferring technology through joint ventures between national companies and leading international firms.

Abu Dhabi’s leaders have shown their interest not only in industrial manufacturing but also in developing and innovating new technologies.

The achievements in the development of a military power house have given confidence to economic planners and entrepreneurs, who are ambitious to take up even bigger projects.

So in the next five to ten years, Abu Dhabi which has capital, leadership and excellent networking, may be able to bring world-leading defence contractors to set up industries to develop sophisticated weapons and defence systems for export purposes.

—haseeb@khaleejtimes.com

 

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