IDEX PREVIEW: As Unrest Spreads, Arms Suppliers Gear Up for Middle East's Biggest Defense Show

2/18/2011
By Stew Magnuson

Tanks are in the streets of Bahrain; protests have broken out in Libya, Iran and Yemen; and Iranian warships are attempting to pass through the Suez Canal, resulting in the ratcheting up of tensions with Israel.
As unrest sweeps the Middle East, some 1,000 exhibitors and an expected 50,000 visitors are descending on Abu Dhabi in the United Arab Emirates next week to attend the region's largest military trade show, IDEX, the International Defense Exhibition and Conference.
The current tensions underscore why the region is such an important market for arms dealers. Fifty-three countries will be represented, including 32 national pavilions. A market analysis produced by Forecast International in January predicts steady increases in Middle East defense spending from $118.25 billion in 2011 to $130.28 billion in 2015.
"One of the most contested and tempestuous regions in the world, the Middle East continues to represent one of the world's most lucrative arms markets," wrote Dan Darling, the report's author, an analyst at the Connecticut-based market research and consultancy firm.
A lot has changed since the annual report was released in January, Darling noted in an interview, and the situation remains fluid. It's still too early to see how things will shake out. For example, Israel's relatively flat defense budget may increase if the provisional Egyptian government begins to drift away from the two countries' peace treaty.
Internal security concerns, along with fears of a nuclear-armed Iran, have been hallmarks of the region, the report pointed out. The lack of job opportunities for young citizens have been a force of destabilization inside the borders of many of the region's nations. Meanwhile, the oil-rich Arab Gulf states have the cash to spend on weapons and related equipment.
"Border security, intelligence, surveillance and reconnaissance are all crucial elements for the oil-rich Arab Gulf nations," the report said.
The United States remains the number-one supplier of weapon systems to the region, with the United Kingdom, France and Russia chipping away at the U.S. market share. China and Turkey had large pavilions in the 2009 IDEX, and are expected to do so again.
New at the exhibition this year is a concurrent NAVDEX show, a collection of naval vendors who will display their wares across the road in a marina. There will be 81 exhibiting companies at that part of the show alone.
Whether any big contracts will be announced this year is anyone's guess, Darling said. The weapon buying process in the Middle East is notoriously "murky," which makes his job difficult.
"There's no transparency whatsoever," he said. Deals can come out of left field. The UAE surprised many at the 2009 IDEX by announcing some $5 billion in contracts, he noted.
Saudi Arabia has been interested in purchasing more utility helicopters. Kuwait is in the market for fighter jets. "There is definitely money to be made," he added.
Keep watching National Defense Magazine's blog for daily reports from the 2011 IDEX and NAVDEX exhibitions at Abu Dhabi, United Arab Emirates, Feb. 21-24.
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Topics: Business Trends, International

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