United Arab Emirates Defence and Security Report Q2 2012

Having navigated its way through the turmoil of the Arab Spring with less difficulty than perhaps anyother Arab government, the main concern for the leaders of the United Arab Emirates in 2012 will be thethreat of instability resulting from conflict between Iran and the US and/or Israel.Internally, the UAE was not entirely untroubled by regional events in 2011. However, small-scale onlineprotests failed to inspire wider demonstrations, and the imprisonment of several online activists inNovember 2011 similarly provoked little public reaction. Elections in September 2011 – only the secondin the UAE’s history – arguably demonstrated that the UAE is gradually inching its way towards greaterdemocracy, for all that the poll concerned elections for the ineffectual Federal National Council and wasopen to relatively few voters.

In the end, though, the events of the Arab Spring may have been most significant from the UAE’sperspective in terms of the Emirates’ intervention in Libya, where UAE fighter aircraft contributed to theUN no-fly zone. The UAE began to reap the rewards of its anti-Qadhafi stance in January 2012 when thenew Libyan government signed a wide-ranging bilateral agreement with the UAE that will cover trade,security and other areas of mutual interest.

In BMI’s view, therefore, the outlook for the UAE is stable, barring shocks to the economy or to itsexternal security. In 2012, Iran appears to represent the greatest threat to the UAE on both fronts, withsenior UAE officials publicly stating that an Iran conflict, and the potential closure of the Strait ofHormuz – which Tehran has threatened – might create serious problems for the country. However, thegovernment has been examining a contingency plan of exporting the UAE’s oil through ports in the Gulfof Oman, thus bypassing any Iranian blockade. It has also been noted that, though the UAE is alreadynear full production capacity, sanctions against Iranian oil exports could actually help the UAE to boostits oil revenues.

Against the backdrop of the Iranian threat, the UAE has continued to invest heavily in military equipmentand to ally itself closely with the United States and other Western governments. The UAE was one of thelargest recipients of US foreign military sales items in 2011, procuring US$1.5bn of equipment, and isengaged in a number of significant military programmes involving Western arms companies. In January2012, it was confirmed that the UAE was set to become the first international customer of the TerminalHigh Altitude Area Defense (THAAD) missile defence system made by Lockheed Martin, as well asassociated radar systems, in a deal worth up to US$1.96bn. Iranian ballistic missiles are the presumptivethreat against which the UAE’s THAAD system would be deployed.

Also in January, the UAE issued a request for proposals for 600 new combat vehicles. In another majordefence acquisition, the UAE is expected in 2012 to select a new fighter jet to fulfil a requirement for 60aircraft. Having previously appeared to favour the Dassault Rafale, the UAE surprised the aerospacesector by issuing a Request for Proposal (RfP) in November 2011 inviting Eurofighter and Boeing tosubmit offers. With the oil price high and showing no sign of falling, the UAE should have no troublesustaining its record of big-ticket military procurements through 2012 and beyond.