BAHRAIN’S defence spending is expected to decrease over the next five years, after peaking at $1.7 billion this year, according to a latest analysis.
Collectively, the GCC member states registered a six per cent growth in military expenditures this year, driven by regional conflicts, said the report.
Based on current forecasts for 2019 the Gulf states’ military spending is set to hit a record $100bn, said the latest analysis by US-based IHS Markit, a global leader in critical information and solutions.
“The six per cent growth in defence expenditure in the GCC that we’ve seen this year is expected to slow, but growth rates of three to four per cent a year are sustainable over the next decade,” said Jane’s by IHS Markit principal defence budgets analyst Craig Caffrey.
“This means that defence spending is likely to hit a record $100bn next year with increases in spending primarily focused on modernising and expanding military force structure and improving readiness in response to continuing regional instability.
“If we see any significant increases in oil prices we will probably see further growth or, at the very least, more procurement activity.”
Increasing defence budgets in Saudi Arabia and the UAE will primarily drive growth in GCC defence spending between 2018 and 2027, he said.
Data specifically related to Bahrain shared exclusively with the GDN by IHS Markit showed that defence spending is forecast at $1.7bn this year compared to $1.6bn last year.
The data which included funding from concerned defence bodies in Bahrain, such as the National Guard, and estimates of other defence expenditure showed that spending next year would be $1.6bn, gradually going down to $1.5bn by 2023.
According to Jane’s Defence Budgets data, despite predicted fluctuations in the growth rate, defence spending will continue to increase over the next five years, reaching around $117bn by 2023.
In total, the GCC states are expected to spend around $86bn on defence equipment over the next five years.
“A major driving factor in defence procurement plans has been the increase in operational activity by GCC militaries in places such as Iraq, Libya, Syria and Yemen,” said the report.
“Such actions have led to an increase in spending on the development of expeditionary and intelligence gathering capabilities, as well as the bolstering of combat aircraft fleets.”
Despite accounting for just 5pc of global defence spending, the GCC is responsible for almost a quarter of all imports of defence equipment – importing assets worth approximately $56bn between 2014 and 2018.
“North America and Europe provide about 95pc of all equipment acquired by the Gulf states,” said the report.
“The US alone accounted for about half of all exports to the GCC in the last five years.”
However, Gulf countries are looking to other suppliers – from Australia to China and Turkey.
“The modernisation and operational requirements of some militaries in the region are seeing some governments turn to alternative suppliers of equipment,” said Jane’s by IHS Markit senior defence industry analyst Charles Forrester.
“The downturn in oil prices in 2014 and 2015 made cost an important factor, while export controls from some key suppliers have prevented the transfer of desired equipment.”
The report also pointed out that GCC countries want to improve domestic military and non-military technological capabilities, citing the example of Saudi Arabia that aims to increase domestic defence procurement spending from 2pc to 50pc by 2030.
“Both the UAE and Saudi Arabia aim to improve their own defence industrial bases to improve self-sufficiency and ensure the security of supply for their own militaries,” said the report.
“They also intend to leverage this capability to boost exports of locally made defence equipment, with the UAE already exporting its Nimr protected vehicle to countries including Algeria and Turkmenistan.”
Bahrain was the first nation to procure the latest variation of the US-made F-16 fighter jet.
A $3.8bn deal to acquire 16 F-16s was signed last year between Bahrain and Maryland-based Lockheed Martin Corp on the sidelines of the Bahrain International Defence Exhibition and Conference.
sandy@gdn.com.bh
&uuid=(email))