The Saudi-U.S. arms deal announced this week, reportedly worth some $140 billion, is more than a headline-grabbing transaction. It is a signal of how serious Gulf countries, particularly Saudi Arabia, are about building modern, capable defence systems at scale. GCC countries are no longer merely markets for military exporters. With capital to deploy and industrial ambitions accelerating, they are increasingly positioned to become significant contributors to the global defence ecosystem.
Nowhere is this opportunity more relevant than in Europe. Faced with the urgent need to increase defence production, but constrained by budgets and limited industrial capacity, European countries could benefit enormously from closer industrial ties to GCC countries—not just as buyers, but as strategic allies. For GCC countries, it is a once in a lifetime opportunity to achieve their ambitions of a domestic and regional defence industrial base.
GCC countries can create a transformative defence industrial partnerships with Europe by defining the scope of their cooperation and then taking steps to implement these joint programmes.
In recent years, GCC countries have made serious efforts to localize their defence industries. GCC policymakers also have considerable ambitions in terms of domestic industry. They also understand the sovereignty implications of being dependent on foreign suppliers. Consequently, governments have set challenging localization targets. They have also sought to transfer technology and production through joint ventures with original equipment manufacturers (OEMs).
GCC countries need to re-define the nature of their defence industrial partnership with Europe. It should consist of three main elements.
To implement these defence industrial programmes, GCC governments need to take the following steps.
GCC countries should deploy a whole of government approach. That will allow them to strike mutually beneficial defence industrial agreements with their European counterparts, whether in terms of working with OEMs, buying R&D, or investing in supply chains. Such a whole of government approach is vital as the transformative, long-term nature of this new defence arrangement requires considerable institutional support.
GCC countries should ensure that the partnerships allow public and private defence players from the region to become involved. There is a growing cadre of private GCC defence contractors who will benefit from greater international exposure, thereby growing the region’s industrial base.
GCC countries should require that the defence industrial arrangements share intellectual property (IP). The transfer of IP is vital to allow the GCC industrial base to develop. Some countries which are major defence supplies greatly restrict sharing of IP. European countries, by contrast, are currently more open to sharing IP.
The time for GCC governments to act is now as European countries make their plans and seek financing. By forging a defence partnership in which each side makes a unique contribution, GCC countries can secure their defence industrial future. It is a win-win for both sides.
Contact us
Menu