Gulf defense spending ‘to top $110bn by 2023’

Gulf defense spending ‘to top $110bn by 2023’
Military expenditure in the Gulf will increase from $82.33bn in 2013 to an estimated $103.01bn in 2019. Above, a tank on display at the International Defence Exhibition & Conference (IDEX), in Abu Dhabi. (Reuters)
Updated 18 March 2019

Gulf defense spending ‘to top $110bn by 2023’

Gulf defense spending ‘to top $110bn by 2023’
  • Saudi Arabia and UAE initiatives ‘driving forward industrial defense capabilities’
  • Budgets are increasing as countries pursue modernization of equipment and expansion of their current capabilities

LONDON: Defense spending by Gulf Arab states is expected to rise to more than $110 billion by 2023, driven partly by localized military initiatives by Saudi Arabia and the UAE, a report has found.

Budgets are increasing as countries pursue the modernization of equipment and expansion of their current capabilities, according to a report by analytics firm Jane’s by IHS Markit.

Military expenditure in the Gulf will increase from $82.33 billion in 2013 to an estimated $103.01 billion in 2019, and is forecast to continue trending upward to $110.86 billion in 2023.

“Falling energy revenues between 2014 and 2016 led to some major procurement projects being delayed as governments reigned in budget deficits,” said Charles Forrester, senior defense industry analyst at Jane’s.

“However, defense was generally protected from the worst of the spending cuts due to regional security concerns and budgets are now growing again.”

Major deals in the region have included Eurofighter Typhoon purchases by countries including Saudi Arabia and Kuwait.

Saudi Arabia is also looking to “localize” 50 percent of total government military spending in the Kingdom by 2030, and in 2017 announced the launch of the state-owned military industrial company Saudi Arabia Military Industries.

Forrester said such moves will boost the ability for Gulf countries to start exporting, rather than purely importing defense equipment.

“Within the defense sector, the establishment of Saudi Arabia Military Industries (SAMI) in 2017 and consolidation of the UAE’s defense industrial base through the creation of Emirates Defense Industries Company (EDIC) in 2014 have helped consolidate and drive forward industrial defense capabilities,” he said.

“This has happened as the countries focus on improving the quality of the defense technological work packages they undertake through offset, as well as increasing their ability to begin exporting defense equipment.”

Regional countries are also considering the use of “disruptive technologies” such as artificial intelligence in defense, Forrester said.

Meanwhile, it emerged on Friday that worldwide outlays on weapons and defense rose 1.8 percent to more than $1.67 trillion in 2018.

The US was responsible for almost half that increase, according to “The Military Balance” report released at the Munich Security Conference and quoted by Reuters.

Western powers were concerned about Russia’s upgrades of air bases and air defense systems in Crimea, the report said, but added that “China perhaps represents even more of a challenge, as it introduces yet more advanced military systems and is engaged in a strategy to improve its forces’ ability to operate at distance from the homeland.”


Saudi Arabia’s biggest gym chain swings to loss

Saudi Arabia’s biggest gym chain swings to loss
Updated 20 April 2021

Saudi Arabia’s biggest gym chain swings to loss

Saudi Arabia’s biggest gym chain swings to loss
  • Operates 135 gyms in UAE and KSA
  • Pandemic has hit fitness sector hard

DUBAI: Saudi Arabia’s biggest gym chain swung to a first quarter loss as the pandemic forced the closure of thousands of fitness clubs worldwide.
Leejam Sports Company reported a net loss of more than SR6.9 million in the first quarter compared to a profit of SR6.2 million a year earlier, it said in filing to the Tadawul stock exchange where its shares are listed.
Overall revenues dipped by about a quarter over the period to SR148.5 million, it said.
Total gym memberships, personal training revenues and rental income fell by more than SR49 million as a result of gym closures in the Kingdom from Feb.5, 2021 to March 6, 2021, it said.
Meanwhile the need to apply precautionary measures in response to the pandemic reduced the number of members joining the clubs.
Leejam operates some 135 Fitness Time centers in Saudi Arabia and the UAE.


‘Many more airlines will go under’ Qatar Airways boss tells CNN

‘Many more airlines will go under’ Qatar Airways boss tells CNN
Updated 20 April 2021

‘Many more airlines will go under’ Qatar Airways boss tells CNN

‘Many more airlines will go under’ Qatar Airways boss tells CNN
  • Qatar Airways CEO Akbar Al-Baker gave a bleak assessment of the challenges facing the industry as it struggles to recover the collapse in global air travel

DUBAI: Qatar Airways CEO Akbar Al-Baker has warned that many more airlines will be forced out of business by the pandemic.
In an exclusive interview on CNN’s Quest Means Business, Qatar Airways CEO Akbar Al-Baker gave a bleak assessment of the challenges facing the industry as it struggles to recover the collapse in global air travel.
“By the time this pandemic is over, there will only be few airlines that are strong and will continue operating,” he said. “A lot of other airlines will go under. And this will continue to happen, because we have not seen the worst of it over yet.”
He said that returning the airline industry to full strength should be a key priority to boost the global economic outlook.


“If this pandemic prolongs for too long, this will completely destroy the world’s economy which is so dependent on airlines for delivering business, carrying freight around, and most importantly creating jobs,” he said.
The outspoken airline chief highlighted some of the safety measures adopted by the airline and its hub at Hamad International Airport in Doha.
These include high-tech temperature sensors, ultraviolet disinfectant processes, and mask-wearing on flights.
He also spoke about the process of asking the company’s shareholders – the Qatari government – for a cash injection during the pandemic, “I couldn’t just jump the queue and go and tell my boss, the ruler of my country, that our situation is so dire, and this is what we need. Because I am sure there were a lot of other people in the queue before me telling him the same thing.”

The CEO also spoke about access to vaccinations and mitigating the risks amid the slow roll out of vaccines in some countries. He told Quest, “It will be a problem for the aviation industry. And we will have to work a way within this risks that we will have to take. But we will have to do things, we'll have to put processes, we'll have to put systems in place to mitigate that risk.” A resurgence of the coronavirus in many countries in recent weeks is threatening to quash some positive signs that had been slowly emerging from the sector. At the same time many passengers are reluctant to fly even where permitted, because of safety concerns and confusion over the different vaccination, testing and quarantine requirements of different countries. Industry body IATA has been trying to address that challenge with its trial Travel Pass initiative aimed at informing passengers about what tests, vaccines and other measures they require at their destinations.

Eni helps UAE emirate of Ras Al-Khaimah look for natural gas

Eni helps UAE emirate of Ras Al-Khaimah look for natural gas
Updated 20 April 2021

Eni helps UAE emirate of Ras Al-Khaimah look for natural gas

Eni helps UAE emirate of Ras Al-Khaimah look for natural gas
  • Eni is already present in Ras Al-Khaimah operating Offshore Block A

DUBAI: Italian energy giant Eni is helping the UAE's northernmost emirate explore for gas.

Its Eni RAK unit has struck an exploration and production agreement with Ras Al-Khaimah Petroleum Authority, the Italian company said in a statement.
The agreement relates to "Block 7" which covers an area of 430 square kilometers. Eni RAK will act as operator of the block with a 90 percent participating interest and Ras Al Khaimah’s national oil company RAK Gas as a partner, with a 10 percent stake.
"Block 7 represents an under-explored acreage in a complex thrust belt geological setting, similar to that of the recent discovery of Mahani in the adjacent Sharjah Emirate," Eni said in a statement.
"The newly acquired 3D seismic will allow the joint venture to assess the geological setting of the area and eventually unlock its hydrocarbon potential. The presence of the existing gas processing facilities in the emirate would also allow a rapid development of any discoveries."
Eni has been involved in a number of gas finds in the Middle East in recent years, most notably in Egypt and the Eastern Mediterranean where the discoveries have ushered in dramatic economic transformations.
Eni is already present  in Ras Al-Khaimah operating Offshore Block A where, after an initial geological and geophysical study period, preparations for drilling operations have started, it said.
The company holds the largest exploration acreage among the international oil companies present in the UAE covering more than 26,000  square kilometers.


UAE extends key parts of $13.6bn economic support plan until mid-2022

UAE extends key parts of $13.6bn economic support plan until mid-2022
Updated 20 April 2021

UAE extends key parts of $13.6bn economic support plan until mid-2022

UAE extends key parts of $13.6bn economic support plan until mid-2022
  • Move will help banks offer new loans
  • Part of wider response to pandemic

The UAE Central Bank has extended key parts of its 50 billion dirams ($13.6 billion) economic support plan until mid-2022.
Under this extension, financial institutions will still be able to benefit from a zero-cost liquidity facility covered by a guarantee of 50 billion dirhams until June 30, 2022, it said in a statement on Tuesday.
The extension decision enables banks to provide new loans and financing to individual clients, small and medium enterprises (SMEs), and other private sector companies affected by the repercussions of the coronavirus pandemic.
“The extension of the targeted economic support plan will provide continuous support from the financial system for the sectors adversely affected by the pandemic,” said Governor Khalid Al-Tameemi.
“This comes as part of support for the recovery phase, in line with the Emirates Central Bank’s mandate to ensure Financial and monetary stability in the Emirates,” he explained.
The Targeted Economic Support Plan is a comprehensive program that covers all measures taken by the Central Bank of the United Arab Emirates in response to the coronavirus pandemic.


Saudi Arabia reduces US bonds holdings by 27.9% in 2021

Saudi Arabia reduces US bonds holdings by 27.9% in 2021
Updated 20 April 2021

Saudi Arabia reduces US bonds holdings by 27.9% in 2021

Saudi Arabia reduces US bonds holdings by 27.9% in 2021
  • Saudi Arabia’s investments in US Treasury bonds included $105.98 billion in “long-term bonds”

RIYADH: Saudi Arabia reduced its holdings of US Treasury bonds to $132.9 billion by the end of February, down by $2.2 billion on a monthly basis, Okaz newspaper reported.
Saudi Arabia has reduced its holdings by 27.93 percent during the last 12 months to $132.9 billion by the end of February of this year.
The Kingdom maintained its 14th position among the largest holders of US bonds in February 2021.
Saudi Arabia’s investments in US Treasury bonds included $105.98 billion in “long-term bonds,” representing 80 percent of the total, and $26.92 billion in “short-term bonds,” accounting for 20 percent of the total.