>From: [EMAIL PROTECTED] >Defense News October 30, 2000 > >Analysts: Few New Weapons Buys for Gulf Oil States >By Gopal Ratnam >Defense News Staff Writer > >Leading oil producers in the Persian Gulf may target their growing >surplus oil revenues toward upgrading and refurbishing their weapons >systems, several regional analysts say. > >World oil prices have skyrocketed from about $12 a barrel of crude in >1998 to roughly $32 a barrel today, leaving a growing surplus income in >the hands of large oil producers in the Persian Gulf, including Saudi >Arabia, United Arab Emirates, Kuwait, Bahrain, Oman, Qatar and Iran. > >Weapons wish lists that lay dormant for many years because of low oil >prices in the mid 1990s likely will be revived, one industry analysts >said. > >"The fact that the original threats are still in place, and the >equipment wish lists are still there... it would not be surprising if >the [equipment] orders start to increase," said Chris Avery, defense >industry equity analyst at J.P. Morgan Securities Ltd. London. > >Weapons purchases also may be influenced by major U.S. and European >defense manufacturers who aggressively pursue sales in the region, Avery >said. > >"Western manufacturers can easily make the case that the higher initial >cost of new weapons would be offset against low maintenance costs of >these," he said. > >But several analysts expect upgrades of existing weapons or replacement >of old ones to be more likely than new purchases of new systems as >countries in the region try to achieve a balance between maintaining >strong militaries and meeting social welfare and infrastructure >requirements of their citizens. > >The countries in the region are still absorbing weapons that were bought >in the aftermath of the 1991 Persian Gulf War, said Mounzer Sleiman, a >Middle East military analyst here. > >"With programs still in the pipeline, [countries] can't commit to new >programs," he said. > >An official at the Pentagon's Defense Security Cooperation Agency, which >manages the U.S. Foreign Military Sales program, said Middle East buyers >will be taking deliveries worth $21 billion in 2001, from previously >contracted equipment. > >Purchases and upgrades in some key mission areas such as air defense, >mine warfare equipment and maritime surveillance capability, >air-to-surface weapons and air-to-air missiles would make sense with >higher oil revenues, said Anthony Cordesman. He is the Middle East >military analyst for the Center for Strategic and International Studies, >a think tank here. > >Saudi Arabia and Kuwait, for instance, have an established "equipment >pool that needs upgrading," he said. Without upgrades, existing systems >would suffer for lack of spares, he said. > >Saudi Arabia has already indicated that it wishes to replace its aging >fleet of F-5s with F-15s, built by Boeing Co., Seattle. > >Any plans by countries in the region to spend their surpluses on >military equipment would have to be weighed against using the money for >domestic needs, Sleiman said. > >In the past, when oil prices have dropped, "there was a tendency to >eliminate some social welfare programs," but these would have to be >addressed now, he said. > >Though the emphasis on any defense expenditure is likely to be on >upgrading existing systems instead of buying new systems, the Gulf >nations' plans also could be heavily influenced by how Iran chooses to >use its surplus income, analysts said. > >"If Iran uses its oil [income] surplus to build up [its military], that >would produce a reaction of the Gulf states," said Kenneth Katzman, >Middle East analysts at Congressional Research Service, the research arm >of the U.S. Congress. > >"Iran's plans were always more ambitious, but because they had very >little money in the late 80s, they could not accomplish what they set >out to do," he said. > >The Iranian military is particularly weak in artillery, air defense, >tanks, armoured personnel carriers and ground armour, he said. > >While the Western governments are focussed on Iran's weapons of mass >destruction capabilities, little attention is being paid to its >conventional forces, Cordesman said. > >In conventional weaponry, Iran is dependent on "equipment bought during >the Shah of Iran's period," he said, adding that Iran may make a "push >to acquire conventional weapons." > >But U.S. economic sanctions on Iran restrict its ability to buy from >Western suppliers, leaving it only Russia and China as potential >sellers, said Philip Finnegan, a defense analyst at Teal Group, a >defense and aerospace market research firm in Fairfax, Va. > >"For Iran, their problem is finding a seller," he said. > >The lack of suppliers is also driving Iran to build its own defense >industrial base, Sleiman said. > >Since U.S. sanctions have severely restricted Iran's ability to maintain >its military, the country has focussed on creating its own >infrastructure, the Persian Gulf defense official said. > >With the rapprochement between Israel and the Palestinians coming under >fire in the last two weeks, Persian Gulf countries may also act swiftly >to create a unified military force under the umbrella of the Gulf >Cooperation Council (GCC), Sleiman said. > >The GCC includes the United Arab Emirates, Kuwait, Qatar, Bahrain, Oman >and Saudi Arabia. > >At the inaugural session of the GCC's defense minister's meeting in >Riyadh, Saudi Arabia, October 17, the ministers called for strengthening >their military ties "in the light of Israeli aggressions against the >Palestinian people." > >The current 5,000-strong unified GCC force called Peninsula Shield could >increase to about 20,000 to 30,000 troops, Sleiman said. The larger >force may need new military equipment, he said. > > >-- >International Network on Disarmament and Globalization >405-825 Granville Street, Vancouver, British Columbia V6Z 1K9 CANADA >tel: (604) 687-3223 fax: (604) 687-3277 >[EMAIL PROTECTED] http://www.indg.org > _______________________________________________________ KOMINFORM P.O. Box 66 00841 Helsinki - Finland +358-40-7177941, fax +358-9-7591081 e-mail [EMAIL PROTECTED] http://www.kominf.pp.fi _______________________________________________________ Kominform list for general information. Subscribe/unsubscribe messages to [EMAIL PROTECTED] Anti-Imperialism list for anti-imperialist news. Subscribe/unsubscribe messages: [EMAIL PROTECTED] [EMAIL PROTECTED] _______________________________________________________
