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United Arab Emirates Defence and Security Report 2015

United Arab Emirates Defence and Security Report 2015

BMI View: The UAE's local defence industry is still in the early stages of development, and as such,domestic companies rely heavily on assistance from foreign firms to manufacture sophisticated militaryequipment. The armed forces' requirements for high-tech naval, air power, missile and surveillanceproducts are therefore predominantly met through imports. However, the government - as part of itseconomic diversification strategy - is working to expand the local defence industrial base, and is activelyencouraging joint ventures (JVs) between international companies and UAE-based entities. The countryranks in the top 15 globally for the size of its defence budget, and we expect further spending growth overour forecast period to 2019 and beyond, driven by the rising threat from Islamist militancy in the region,growing levels of cybercrime, and the persistent risk of conflict with Iran, creasing significantopportunities, especially for JVs in the UAE's defence sector.

BMI expects strong growth in defence expenditure by the UAE over the next five years, averaging 6.4% yo-y over our forecast period to 2019, and reaching USD35bn by that year. This increase will be driven bythree key threats to the country's security environment. Firstly, the rise in Islamist militancy seen across theMENA region is driving growth in procurement of military aircraft, as the UAE is becoming increasinglyinvolved in coalition airstrikes against militant groups such as the Islamic State. It is also driving growth inprocurement of surveillance equipment, as the country seeks to protect itself against terrorist attacks in itsown territory. Secondly, the risk of conflict with Iran persists, and the country has indicated it may block theStrait of Hormuz in the event that it felt threatened militarily, which would severely disrupt maritime tradeon which the UAE is heavily reliant. This, along with a rise in criminal activity along the UAE's coastline,is driving growth in the naval segment of the industry. Thirdly, the country has seen a substantial expansionin cybercrime over the recent years, and the government is therefore expected to invest heavily in cybersecurity over the coming decade, in order to protect its increasingly interconnected population, its rapidlyexpanding insurance and finance industries, and the crucial oil & gas sector from cyber attacks.


BMI Industry View
SWOT
Political
Economic
Operational Risk
Industry Forecast
Defence Expenditure
Table: Defence Expenditure (United Arab Emirates 2012-2019)
Armed Forces
Table: Armed Forces Personnel (United Arab Emirates 2005-2012)
Table: Manpower Available For Military Service (United Arab Emirates 2012-2019)
Defence Trade
Table: Defence Trade Balance (UNITED ARAB EMIRATES 2012-2019)
Defence Exports
Table: Defence Exports (United Arab Emirates 2012-2019)
Defence Imports
Table: Defence Imports (United Arab Emirates 2012-2019)
Macroeconomic Forecasts
Economic Analysis
Fiscal Position Remains Solid
Oil Sector To See Only Marginal Gains
Risks To Outlook
Table: Economic Activity (United Arab Emirates 2009-2018)
Table: GDP By Expenditure (United Arab Emirates 2011-2018)
Industry Risk Reward Index
United Arab Emirates Defence Risk Reward Index
Table: Middle East And Africa - Defence Industry Risk Reward Index
Rewards
Risks
Market Overview
United Arab Emirates Defence Market Overview
Domestic Defence Sector
Domestic Defence Market
Table: United Arab Emirates - Bilateral Defence Agreements
United Arab Emirates Security Overview
Domestic Threats
Regional Threats
International Threats
Weapons of Mass Destruction
Company Profile
Abu Dhabi Shipbuilding Company
Regional Overview
Key Drivers For Spending
Key Trends Over 2015 And Beyond
Key Opportunities
Global Industry Overview
Global Political Themes For 2015
Methodology
Sector-Specific Methodology
Table: Defence Risk Reward Index Indicators
Weighting
Table: Weighting of Defence Risk Reward Index

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