LONDON: A queer combination of escalating regional tensions and oil, have propelled Saudi Arabia to become the number one importer of weapons and defensive systems, overtaking the previous record holder, India. A new report by IHS Jane 360 in its Global Defence Trade Report, which examined arms trade across 65 countries last year shows Saudi Arabia spent over $6.4 billion on defence purchases in 2014, dislodging India from the top spot. Indias spending stood at $5.57 billion, placing it second.
Saudi Arabian imports surged 54% over the past year, and are forecast to rise by 52% to $9.8 billion this year, based on planned deliveries, IHS said. This means that one out of every seven dollars spent on defence imports in 2015 will be spent by Saudi Arabia. Together with its Persian Gulf neighbour, United Arab Emirates, both countries imported $8.6 billion of weapons more than the whole of western Europe combined.
According to Ben Moores, senior defence analyst at IHS Aerospace, Defence & Security, global defence trade rose for the sixth straight year to $64.4 billion, up from $56.8 billion. Defence trade rose by a landmark 13.4% over the past year This record figure has been driven by unparalleled demand from the emerging economies for military aircraft and an escalation of regional tensions in the Middle East and Asia Pacific, he said.
With India now in second place, China has become the third largest importer, up from fifth place earlier. China continues to require military aerospace assistance from Russia and its total defence procurement budget will continue to rise very quickly, said Paul Burton, director of defence industry and budgets at IHS.
The U.S., the world's top supplier of defence equipment, accounted for one-third of all exports last year and was the main beneficiary of strong Middle Eastern demand, IHS said, with $8.4 billion worth of Middle Eastern exports in 2014, compared to $6 billion in 2013. Other countries that top the list of arms suppliers to the Middle East include the United Kingdom with $1.9 billion, Russia with $1.5 billion, France with $1.3 billion and Germany with $1 billion.
Ben Moores, the author of the report said Youre seeing political fractures across the region, and at the same time youve got oil, which allows countries to arm themselves, protect themselves and impose their will as to how they think the region should develop.
Behind the US, Russia with $10 billion and a 9% increase, is the second largest global arms exporter. The report however predicts that because of Western sanctions, Russias strong performance could see a slowdown in 2015. "A drop off in exports is forecast for 2015 as major programs draw to a close, a trend that could be accelerated by sanctions. Furthermore, falls in the oil price are set to have a devastating impact on some lead Russian clients who are vulnerable to low oil prices, such as Venezuela and Iran," IHS said.
Among other top exporters is France- the third biggest with $4.9 billion, followed by Britain with $4.1 billion and Germany with $3.5 billion.
Chinas defence budget is still growing at a robust pace and, more than doubling since 2008, according to IHS. Earlier this month, Beijing announced its defence budget would increase by 10.1 % to 886.9 billion yuan ($141.6 billion) for 2015. Despite the increases, it's important to remember that Chinese defence spending remains relatively low compared to the size of its economy, particularly when you consider the country's position in the world," said Craig Caffrey, senior defence budget analyst at IHS.
The IHS study handpicked South Korea as a potential regional leader for defence imports. South Korea looks set to be the rising star of the Asia Pacific defence industry, it concluded. --EJ
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