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The UAE Is Turning Into the World Capital for Weapons Makers

dani191

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The UAE Is Turning Into the World Capital for Weapons Makers
Years of quiet development are finally paying off, and Abu Dhabi’s defense industry can largely stand on its own feet.
BY NAOMI COHEN | OCTOBER 20, 2020, 4:10 AM
Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed Al-Nahyan (C) listens to a representative at the Russian pavilion during a visit to the Dubai Airshow on Nov. 17, 2019.

Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed Al-Nahyan (C) listens to a representative at the Russian pavilion during a visit to the Dubai Airshow on Nov. 17, 2019. KARIM SAHIB/AFP VIA GETTY IMAGES
At Defence and Security Equipment International, the world’s largest arms fair, held last year in London, the organizers reported a record demand for space. A large chunk of that demand was from the United Arab Emirates, which reserved the corner with the most foot traffic. But its pavilion looked empty next to the life-size prototypes that surrounded it, and its delegate was too busy to talk to the press.
Still, the creators of the nearby surveillance equipment were keen to chat. They came from the United Kingdom, Sweden, and Australia, and they said they were pleased with how much room their new patrons gave them to explore. One of them had made a voice recognition system that cross-indexes international databases of police interrogations. Another displayed an internet-of-things radar system mounted on a police car that takes orders from intelligence officers.
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The UAE has not released data on its defense budget since 2014, but back then it already outspent the United States in per capita terms, according to the Stockholm International Peace Research Institute. Most of that money goes to buying the flashiest items on the market. But if a sale is not approved, the UAE is not at much of a loss; a growing portion of its budget is going toward developing its own technologies.
The debate over whether the United States will sell the Gulf country the F-35 fighter jet, then, misses the larger picture. If the UAE can’t get the jet, it might negotiate to join the F-16 supply chain and gain skills and contacts to help it build other sophisticated systems
The debate over whether the United States will sell the Gulf country the F-35 fighter jet, then, misses the larger picture. If the UAE can’t get the jet, it might negotiate to join the F-16 supply chain and gain skills and contacts to help it build other sophisticated systems
, according to Shana Marshall, an assistant research professor at George Washington University.

Over the past decade, the small Gulf state has built a reputation for splurging its petrodollars on soccer teams, museums, dairy and produce farms, real estate, tech start-ups, and banks—whether to claim a stake in rising markets, diversify its economy, or buy political clout. The logic is similar with defense production, but more than simply adding a logo and funneling proceeds, it is moving much of the creation process onshore.
In a world where multinational companies already have unclear jurisdiction, that may not seem significant. But in one where rich countries are reprioritizing spending, where regional powers are shifting, and where warfare is prioritizing brain over brawn, Abu Dhabi is “a defense executive’s absolute dream,” Marshall said. It pays quickly, generously, and without bureaucratic oversight.
Boosted by its recent agreement with Israel to normalize diplomatic relations, the monarchy could become the pumping heart of an unbridled defense industry sooner rather than later. Those working to ban arms and technology transfers to unfriendly countries will find their efforts lost. Those looking to cash in on the military industrial complex will get to know a new pole beyond the United States and China—one that literally considers itself at the center of the world.
The way here was neither long nor conventional. Most countries that produce arms today—or at least parts for foreign ones—kick-started their industries during the Cold War, with the help of U.S. firms looking to buy consumer and political loyalty. The UAE only broke free from British protection in 1971; it took the Emirati government until the Iraqi invasion of Kuwait in 1990, and then the U.S. invasion of Iraq in 2003, to take interest. Those wars signaled to the Gulf monarchies that they had to be strong and self-reliant. They subsequently signed deals with foreign defense firms to start investing in their own industries and promised to boost one another’s. Saudi Arabia stepped up, but the clear leader was the UAE.
The Emirates’ approach to these deals was different. The standard agreement since the Cold War, known as an “offset,” holds that the defense contractor does not just sell a weapon but also pays for infrastructure around it. The buying country can demand investment either directly related to the sale, like a factory for small parts or training in maintenance, or in something not related at all, like factories for civilian goods, real estate, universities, industrial parks, or shrimp farms.
Both profit: One side provides cheap labor, another subsidizes development. In 1997, as price tags got bigger, the U.S. Department of Commerce advised governments to manage the offsets through investment funds. The UAE was the only country that listened. Its offset bureau helped establish two sovereign wealth funds—Tawazun and Mubadala—where offset money would be dumped before it was invested. Run by well-connected merchant families and their financial consultants, these funds favor high-return portfolios like financial services, oil-related infrastructure, and a shipyard for yachts and warships.
But the commerce department’s own Bureau of Industry and Security turned against the previous advice in the late 1990s to use investment funds because it found the practice to be corruption-prone. The U.S. Government Accountability Office also criticized offsets as an opaque form of offshoring and warned of the risks of technological transfer. But their words had little effect. As the U.S.-Soviet arms race petered out, the United States consolidated its military bureaucracy, shaving the budget of those who monitored these kinds of deals. Mohammed bin Zayed, the UAE’s de facto ruler and deputy commander of its armed forces, also has friends in think tanks and lobbying circles to push deals through.
Still, offsets had their limits. They are known to be slow, to be rarely completed, and to keep the buying country dependent. The Emirates set tight rules to wring the most out of them but was too impatient to build indigenous military infrastructure from the ground up. Instead, by streamlining and scaling up its investment funds, it has been pooling money to bring foreign projects—and with them, their engineers and patents—to Abu Dhabi.
Self-sufficiency is less about the nationality of the developers or the origin of every part; what matters more is that the UAE owns, assembles, maintains, and services a growing share of the technologies it uses.
In 2014, it brought together the Tawazun and Mubadala funds under the Emirates Defence Industries Company, which then merged with two dozen other subsidiaries last year to form the defense conglomerate Edge. Its CEO manages a $5 billion budget to develop what he calls “sovereign capability.” In practice, that means partnering with big foreign defense firms, buying out small ones, and hiring midsize ones to open shop in Abu Dhabi, registered under a local name. Since the intellectual property belongs to the Emiratis, export controls to limit the exchange of technological know-how do not apply.
The UAE will likely never build an entirely sovereign defense industry—nor, with global supply chains, does it need to. Emiratis will likely never run the whole show, given that the country has few native workers and many foreign ones. But, the way global supply chains work, self-sufficiency is less about the nationality of the developers or the origin of every part; what matters more is that the UAE owns, assembles, maintains, and services a growing share of the technologies it uses.
Its full arsenal is kept confidential, but the war in Yemen offered a preview. The offensive said to have triggered the world’s worst humanitarian disaster, the 2015 blockade of the Hodeida port, was enforced by the Baynunah corvette, a small warship manufactured at Abu Dhabi Ship Building. Observers of the war also spotted UAE-branded missiles, drones, machine guns, and armored vehicles. These arms may not be the highest grade, but they do the job in battle. They are now tested, advertised, and on the market for export.
Gulf states that haven’t been able to emulate the Emirates’ defense drive, like Kuwait and Bahrain, are reliable customers, both in weapons and services. Saudi Arabia has tried to follow suit but is nowhere near the Emirates in exports or innovation. Its target to localize up to half of its military industry by 2030 is more talk than walk; it still puts most of its money in joint projects rather than research and training, which the Emiratis count on for bigger and longer-term returns.
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With a pandemic raging and economic priorities shifting, it may not be the best time to secure an arms deal. Global military spending relative to GDP—notably in research and development—has already been falling for a decade, and the Gulf states in particular have been losing their shine in Western capitals. Due to its intervention in Yemen, the UAE has also had sales blocked or suspended, pushing it to decrease its arms dependency on the West. But all of this works in the UAE’s favor.
As conventional defense giants are struggling with problems at home, smaller countries are looking to buy elsewhere; among the UAE’s biggest customers are the Democratic Republic of the Congo, Mali, Nigeria, Jordan, Algeria, South Sudan, and Egypt
As conventional defense giants are struggling with problems at home, smaller countries are looking to buy elsewhere; among the UAE’s biggest customers are the Democratic Republic of the Congo, Mali, Nigeria, Jordan, Algeria, South Sudan, and Egypt
, which may have a tough time accessing certain weapons from the United States or European countries.

The UAE’s products cater to their needs, with cheaper prices and features such as adaptability to desert weather and minefields. It already sells to nearly two dozen countries, according to the Stockholm International Peace Research Institute; it has joint projects with such powers as Russia and Saudi Arabia; and it sends equipment for free to U.N.-embargoed countries including Somalia and Libya. Edge’s CEO recently said that despite the global economic slowdown, the conglomerate is preparing an order of armored vehicles for Algeria and is discussing new projects with several other countries.
One of those countries, he said, is Israel. Even before they normalized relations, the two had reportedly collaborated in defense, especially in drone surveillance, and announced in July that their defense and intelligence firms would partner to combat the COVID-19 pandemic, likely involving technologies led by artificial intelligence. The UAE-Israel match is ideal for the pair: Both countries are small, urbanized, and specialize in artificial intelligence and cybersecurity. Now that they have a direct channel, they can sell and share technologies that the United States had blocked.
The Israeli defense ministry is not likely to object to a close partnership, since the two countries’ strategies—to counter Iran, curb the Muslim Brotherhood, and refine domestic surveillance—align. The respective defense firms are also eager for big-ticket deals, which will fund Israeli experimentation in advanced technologies and boost Emirati status in the market.
The way it’s headed, the UAE is hoping to become the center of gravity of an industry in need of deep pockets. It does not need to copy the United States to prove it has succeeded. “The Emiratis find a niche because they know that they are small, and that if they want to matter, they have to not play the game according to others’ rules,” said Florence Gaub of the European Union Institute for Security Studies.
The defense industry the UAE is subsidizing is planning less for wars on land or sea, and more in cyberspace and urban airspace. That’s a market projected to grow and an area that particularly concerns a monarchy intent on holding onto power. And that means the world’s elite engineers, retired officers and mercenaries, private equity managers, defense contractors, and brand consultants are likely to continue packing for Abu Dhabi.
 

Pandora

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In what world? With face of Sheikh pasted on the top it is clearly a paid article for PR campaign of UAE. A world capital of weapons that imports everything from world.
 

Lincoln

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What weapons are they making? Their jets, their assault rifles, their tanks, their MCAV's, even their scientists! They all come from the West!
 

Titanium100

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In what world? With face of Sheikh pasted on the top it is clearly a paid article for PR campaign of UAE. A world capital of weapons that imports everything from world.
I fail to see why anyone can't hire intellectuals and build their own new technology and adventure into a new technology discovery. In fact everyone should be doing exactly that. UAE is not only buying but hiring intellectuals to build new technology
 
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PAKISTANFOREVER

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I fail to see why anyone can't hire intellectuals and build their own new technology and adventure into a new technology discovery. In fact everyone should be doing exactly that. UAE is not only buying but hiring intellectuals to build new technology




In other words the UAE cannot do it themselves so they hire non-Arabs who can.......... :disagree:
 

Titanium100

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In other words the UAE cannot do it themselves so they hire non-Arabs who can.......... :disagree:
You have a defeatist mentality. Do you think the Americans build the Nuclear weapons themselves? No they saved the best scientists from Nazi Germany and they help make the US great. They also on regular gather intellectual developers and insert them into their ranks. Gathering intellectual property is the way to go forward taking diversified knowledge.

Even 80% of todays technology was developed by a poor immigrant in American from the Balkan. They took his ideas and this is what it's all about. Diversifying and collecting intellectual properties as much as you can
 

dani191

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You have a defeatist mentality. Do you think the Americans build the Nuclear weapons themselves? No they saved the best scientists from Nazi Germany and they help make the US great. They also on regular gather intellectual developers and insert them into their ranks. Gathering intellectual property is the way to go forward taking diversified knowledge.

Even 80% of todays technology was developed by a poor immigrant in American from the Balkan. They took his ideas and this is what it's all about. Diversifying and collecting intellectual properties as much as you can
yes elbit have companies all over the world
 

PAKISTANFOREVER

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You have a defeatist mentality. Do you think the Americans build the Nuclear weapons themselves? No they saved the best scientists from Nazi Germany and they help make the US great. They also on regular gather intellectual developers and insert them into their ranks. Gathering intellectual property is the way to go forward taking diversified knowledge.

Even 80% of todays technology was developed by a poor immigrant in American from the Balkan. They took his ideas and this is what it's all about. Diversifying and collecting intellectual properties as much as you can



In the 1940s, the Germans and americans were both white western european Christians. The UAE Arabs are not neither do they have the IQ or natural creativity to be able to build advanced technologies and sciences themselves.
 

dani191

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In the 1940s, the Germans and americans were both white western european Christians. The UAE Arabs are not neither do they have the IQ or natural creativity to be able to build advanced technologies and sciences themselves.
so they import people like usa do and uk do and every develop country do
50 % of the big companies in the usa are of people that didnt born in usa
 

dani191

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This sounds more like racism to me. What the! Anyways they have alot of brillant Arabs from Syria, Egypt and other part of the middle east.

By the way did you know that Stevie jobs was a fucking Arab as well. There are brillant arabs and productive
so they need to develop there countries
 

PAKISTANFOREVER

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This sounds more like racism to me. What the! Anyways they have alot of brillant Arabs from Syria, Egypt and other part of the middle east.

By the way did you know that Stevie jobs was a fucking Arab as well. There are brillant arabs and productive, intellectuals and gifted individuals but that shouldn't deny them from accessing into a deeper intellectual pool from the larger world




What advanced sciences and technologies have the Arabs ever invented?
 

PAKISTANFOREVER

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Chemistry, Math, most of the current medical surgeries, biology. Which is basically what you learn in school. All of that Comes from the Arabs. They came with the foundation of knowledge the world is build on today



Did Arabs invent aeroplanes, submarines, computers, i-phones etc?
 

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