MercoPress. South Atlantic News Agency

Saudi Arabia largest importer of defense equipment in 2014, and probably 2015

Moores said “the Middle East is the biggest regional market and there are USD110 billion in opportunities in coming decade.”

Saudi Arabia has replaced India as the largest importer of defense equipment worldwide and took the top spot as the number one trading partner for the US in 2014, according to IHS’ annual Global Defense Trade Report.

 “Growth in Saudi Arabia has been dramatic and, based on previous orders, these numbers are not going to slow down,” said Ben Moores, senior defense analyst at IHS Aerospace, Defense & Security.

Already the largest importer of weapons, Saudi Arabian imports increased by 54% between 2013 and 2014 and, based on planned deliveries, imports will increase by 52% to USD9.8 billion in 2015. One out of every seven dollars spent on defense imports in 2015 will be spent by Saudi Arabia.

“When we look at the likely export addressable opportunities at a global level for the defense industry, five of the 10 leading countries are from the Middle East,” Moores said. “The Middle East is the biggest regional market and there are USD110 billion in opportunities in coming decade.”

Saudi Arabia and UAE together imported USD8.6 billion in defense systems in 2014, more than the imports of Western Europe combined. The biggest beneficiary of the strong Middle Eastern market remains the US, with USD8.4 billion worth of Middle Eastern exports in 2014, compared to USD6 billion in 2013.

The second tier of exporters to the Middle East is led by the United Kingdom with USD1.9 billion, the Russian Federation with USD1.5 billion, France with USD1.3 billion and Germany with USD1 billion.

Turning to China, in 2014 the country jumped from the world’s fifth to the third largest defense importer.

“China continues to require military aerospace assistance from Russia and its total defense procurement budget will continue to rise very quickly,” said Paul Burton, Director of Defense Industry & Budgets at IHS Aerospace, Defense & Security.

IHS forecasts that fast-emerging exporter South Korea will become a regional leader in the coming decade. Some USD35 billion in new contracts will come online within the next decade and the South Korean defense industry is forecast to win $6 billion in new business within East Asia. South Korea looks set to be the rising star of the Asia Pacific defense industry.

Russia exported USD10 billion in 2014, an increase of 9% from 2013. China was the largest recipient of equipment (USD2.3 billion) followed by India (USD1.7 billion), and Venezuela and Vietnam (each USD1 billion).

After years of sales growth, Russian industry exports now face challenging times. 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. This problem is compounded as Chinese industry becomes increasingly less dependent on Russian technology.