Fighters, Missiles and Transport: GCC Spending Priorities Take Shape

WASHINGTON — Despite the pinch on Western defense spending, Middle Eastern nations are continuing to invest in new weapons and capabilities, particularly combat and transport aircraft, missile defenses and cyber warfare technology.

And US defense companies see the diverse fleets operated by Middle Eastern air forces as a way to keep production lines open, particularly after major customers, like the Pentagon, complete purchases.

“They do play a big role in keeping things going,” said Richard Aboulafia, vice president of analysis for the Virginia-based Teal Group. “They tend to have very diverse fleets with multiple capabilities and multiple arms sources [and] they tend to pay for the latest and best.”

The Middle East aircraft market can be split into five major categories: fighters; trainers; transport; helicopters; and intelligence, surveillance and reconnaissance (ISR).

Missile defense remains a high priority for all six Gulf Cooperation Council (GCC) countries, while cyber security is a growing concern; both markets are being driven heavily by fears of attacks from Iran.

“First and foremost, the focus will always be defending the homeland,” said Grant Rogan, CEO of Blenheim Capital and a longtime expert on military affairs in the region.

The market is also being impacted by a fear in the region that the US may be wavering on long-term commitments. GCC countries are wary of hints of warming relations between Iran and the US, as well as the Pentagon’s much-publicized “pivot” to the Pacific.

“A lot of people are questioning how committed the US is to certain areas, particularly after the American non-intervention in Syria,” Rogan said. “That will have an impact on defense spending and prioritization.”

Aircraft

Combat aircraft sales always grab the big headlines in the Middle East and several pending sales are being watched closely.

The United Arab Emirates (UAE) is looking to purchase 48 to 60 new jets, Aboulafia said. The Emirates already operates Lockheed Martin F-16 block 60 fighters, which are among the most advanced version of the jet on the market. In April, UAE announced it would purchase 25 more block 60 F-16s.

Qatar, which has one squadron of Dassault Mirage 2000s, is talking about new fighter purchases, Aboulafia said. Kuwait’s replacement of its Boeing F/A-18 Hornets “is long overdue.”

With Bahrain, Kuwait, Qatar and the UAE in various stages of lining up deals to expand their fighter capabilities, the purchase of new, highly capable lead-in trainers is unlikely to be far behind.

While Alenia Aermacchi’s M-346 and Korea Aerospace Industries’ T-50 hope to challenge the longtime dominance of BAE Systems’ Hawk, the GCC countries remain very much BAE territory. Saudi Arabia, Oman, the UAE, Kuwait and Bahrain all have variants of the Hawk trainer in their fleets.

The 2012 deal with the Saudis took care of one of the two largest requirements in the region, with 22 Hawk advanced jet trainers part of a £1.6 billion (US $2.5 billion) training package.

A UAE requirement for 48 trainers should have been a windfall for Alenia, whose M-346 was selected in 2009 as part of a roughly €1 billion (US $1.3 billion) deal. But the company has yet to receive a purchase order.

In addition to UAE, Qatar and Kuwait are potential, if likely small, markets for trainers. The Qatari requirement could grow if the country follows through on plans to significantly increase its fighter force, which currently numbers 12 Mirage 2000s and six Alpha Jet trainers.

Airlift is another important market, particularly in Saudi Arabia, which might serve as a much-needed C-17 customer. The C-17 production line is set to close in 2015.

“If anyone is going to save the line at the last minute, it’s going to be them,” Aboulafia said.

Airbus has been looking for A400M Atlas customers.

The future of the kingdom’s medium-sized transports is clearer. Last month, Saudi Arabia purchased two KC-130J refueling tankers. The deal could expand to 25 C-130J Super Hercules, 20 transports and five KC-130Js.

Meanwhile, GCC members have been looking to expand their ISR capabilities for years.

Airborne warning and control system (AWACS) aircraft are a top UAE priority, and the country has eyed the Northrop Grumman E-2 Hawkeye and a Saab-made airborne early warning aircraft.

The UAE Air Force has already purchased the unmanned US General Atomics Predator.

As for maritime security, the Boeing P-8 maritime patrol aircraft — flown by the US Navy and India — could also find its way into the Middle East.

UAE and Qatar are considering the Sikorsky and Lockheed Martin MH-60R anti-submarine and anti-surface warfare helicopter.

Missile Defense Network

Since the early 1990s, when Iraq launched Scud missiles at both Israel and Saudi Arabia, the GCC has been aware of the risk posed by long-range missiles. While countries have made heavy investments in missile defense, the next big challenge is the integration of their various missile defense systems.

Given the size of the GCC region, a missile launched toward one country will likely pass through areas covered by allied missile defense systems. If the systems are not linked, it could create potentially disastrous scenarios in which multiple systems launch at once, at best creating a messy political situation and at worst causing interference and allowing the enemy weapon to hit its target.

What that linked system could look like is up for debate. A recent report by the Center for Strategic and International Studies urged the GCC to create an interface with American assets in the region.

“No single area presents a more serious military threat to the GCC than Iran’s acquisition of long-range missiles and movement towards acquiring nuclear weapons,” the report stated.

“The GCC needs to expand its air defense capabilities to develop a common and integrated approach toward missile defense in cooperation with the US — the only real-world provider and integrator of such a system.”

A potential model can be seen in the European Phased Adaptive Approach, which seeks to cover all of Europe under a joint system of radars linked to the long-range Aegis and the medium-range Terminal High Altitude Area Defense (THAAD) missile defense platforms. That system is expected to be complete after 2018, although initial testing has begun.

Because of the size of the GCC, the countries would likely not need an Aegis system to provide coverage, according to George Lewis, senior research associate at the Judith Reppy Institute for Peace and Conflict Studies. Instead, a system would link the medium-range THAAD and short-range Patriot batteries between countries.

The UAE became the first international buyer for THAAD when it finalized a $2.7 billion deal this year; Qatar has requested two THAAD units and associated equipment for a combined price of $6.5 billion.

While THAAD is picking up sales, Jacob Stokes, research associate at the Center for a New American Security, said the core of a networked system will remain the Patriot system, which is already in place across the GCC. Oman is the only GCC state not equipped with the Patriot Advanced Capability-3 system.

“Patriots are important; they’re a relatively effective system within the defense world, but you can overwhelm systems, and that’s always the worry,” Stokes said. “That’s why you try to knit them together more closely.”

Cyber

While an integrated missile defense network could protect the skies, it creates potential vulnerability in the world of cyber.

GCC awareness on cyber defense increased after a 2012 cyber attack on Saudi Aramco, the largest energy company in the world. At the time, US officials indicated they believed Iran to be behind the attack, which deleted tens of thousands of hard drives and replaced them with images of burning American flags.

While there was little actual damage to Aramco’s production, seeing how easily the region’s vital resource extraction industries could be damaged caused a “sea change in the region,” Stokes said.

“What you see is that the Iranian cyber threat is pretty good,” Stokes said. “They’re not at the level of the Chinese, but they’re definitely at a fairly high level.”

“Cyber spending is a new trend,” Rogan said. “The world’s awakened to the fact that it’s an unchained beast that everyone is still coming to deal with.”

In addition to cyber, Rogan sees a growing investment in homegrown intelligence services. For years, the GCC states have relied on allies in the US and UK to provide intelligence and cyber assistance; in the wake of the WikiLeaks and Edward Snowden affairs, he predicts GCC countries will focus on beefing up their own domestic information gathering agencies.