Across the Gulf states comprising the GCC (Saudi Arabia, UAE, Kuwait, Qatar, Bahrain and Oman), defence budgets are expected to reach record highs next year, with increases in spending primarily focused on modernising and expanding military force structure and improving readiness in response to continuing regional instability.

“The 6 percent growth in defence expenditure in the GCC that we’ve seen this year is expected to slow, but growth rates of 3 to 4 percent a year are sustainable over the next decade – meaning that defence spending is likely to hit a record USD100 billion next year,” said Craig Caffrey, principal defence budgets analyst at Jane’s by IHS Markit. “If we see any significant increases in oil prices, we’ll probably see further growth – or at the very least, more procurement activity.”

Jane’s Defence Budgets data says that despite predicted fluctuations in the growth rate, defence spending will continue to increase over the next five years, reaching around USD117 billion by 2023. In total, the states of the GCC are expected to spend around USD86 billion on defence equipment over the next five years.

GCC defence budgets have risen as a percentage of GDP over recent years, but even more significantly are also rising as a share of government spending; highlighting the importance placed on enhancing military capabilities.

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. 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.

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. 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.

“Efforts to expand indigenous production over the next decade will need to be in partnership with foreign suppliers,” said Charles Forrester, senior defence industry analyst at Jane’s by IHS Markit. “Requirements and supplier relationships may be shifting, but the overall strength of the market remains unchanged.”