Middle East Arms Market Remains Hot Despite COVID Hurdles.

• Author: Roaten, Meredith

DUBAI, United Arab Emirates--Despite ongoing challenges related to the COVID-19 pandemic, defense companies gathered in droves at the annual Dubai Airshow to ink new deals and show off their wares.

Industry executives and government officials didn't let the pandemic stand in the way of new business. Organizers of the international confab reported $78 billion worth of commercial and defense deals, compared to the approximately $50 billion in sales from the 2019 show.

In addition to inking arms contracts, companies showcased partnerships and collaborative agreements mat will lay the foundation for what some say may be a more stable regional defense industry in the future.

The United Arab Emirates' more than $ 14 billion in military spending this year alone highlights how many opportunities there are in the country despite a contracted economy because of the pandemic, said Nicholas Dawson, a Middle East analyst at Forecast International, a Newtown, Connecticut-based market consulting firm. Expenditures are expected to increase even more as the region continues to be a "hotbed of conflict," he said.

For example, recent incidents of Iran harassing U.S. Navy ships in the Persian Gulf may result in countries such as the Emirates and Qatar building up their defenses in case of escalation and threats to their interests, he said.

Currently, the region makes up 7.5 percent of the world's combined total defense spending. But that could tick up by 2027, Dawson said.

"We're looking at a pretty good increase to where it could potentially hit an 8 percent of global combined total defense spending," he said.

Some U.S. contractors are increasing their presence in the UAE and gaining a regional foothold. For example, Abu Dhabi state-owned manufacturer EDGE Group and L3Harris announced they would open a service center in the nation for electro-optical and infrared systems in support of its air surveillance and reconnaissance WESCAM MX-series EO/IR capability.

Moving forward, the agreement could be expanded, according to Gary Rosholt, corporate vice president of Middle East operations at L3 Harris.

"It has the potential to move into a full assembly and production as we kind of increase the business case on some new opportunities and procedures for follow-up," he said.

L3 Harris has been operating in the region for decades, and Rosholt expects the UAE to continue to value its relationship with the United States.

"I mink they do value the U.S. as we do value...