UAE signs $5.5 billion in military contracts as Yemen war heightens scrutiny

February 21, 2019

By Alexander Cornwell and Stanley Carvalho

ABU DHABI (Reuters) – The United Arab Emirates awarded 20 billion dirhams worth ($5.5 billion) of military procurement contracts during a defense show this week, at a time when arms sales to the country are under scrutiny due to its role in Yemen’s devastating war.

The majority were awarded to international companies such as U.S. firms Lockheed Martin and Raytheon, which sealed one of the biggest deals with 7 billion dirhams worth of contracts related to its Patriot missile air defense system.

Gulf Arab states including the UAE and Saudi Arabia have long been major buyers of U.S. weapons but have beefed up military purchases in recent years from other countries. This week, the UAE awarded deals to firms from Russia, Turkey, Pakistan and South Africa at the five-day IDEX military exhibition.

Defense industry executives said other countries stand to benefit from increased scrutiny of Western arms sales to a Saudi-led coalition involved in the Yemen war. The conflict killed tens of thousands of people and pushed the poorest Arabian Peninsula country to the edge of famine.

The UAE and Saudi Arabia are leading a Sunni Muslim coalition, which includes Yemeni forces, that is battling the Iran-aligned Houthi movement to try to restore the internationally recognized government ousted from power in 2014.

Some countries like Denmark and Germany last year suspended future approval of arms exports to Saudi Arabia following the murder last October of Saudi journalist Jamal Khashoggi at the kingdom’s Istanbul consulate and over the Yemen conflict.

Late last year, U.S. lawmakers introduced various pieces of legislation seeking to put tighter controls on U.S. dealings with Riyadh, including clamping down on weapons sales and barring military cooperation with the coalition.

Saudi Arabia signed agreements this week at IDEX to develop its domestic defense industry as the kingdom, the world’s top oil exporter, seeks to diversify its economy away from oil.

Saudi Arabian Military Industries (SAMI), the kingdom’s state defense company, signed partnerships with France’s Naval Group, Spain’s Navantia, and Abu Dhabi state fund Mubadala.

SAMI, established in May 2017, seeks to localize 50 percent of military spending by 2030 as part of Crown Prince Mohammed bin Salman’s economic diversification plan.

(Reporting by Alexander Cornwell and Stanley Carvalho; Editing by Alexandra Hudson)

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