Record-breaking $65 Billion Global Defense Trade in 2015 Fueled by Middle East, Asia

By
June 13, 2016 19:04

Arab countries lead Israel in defense imports, but Israel tops in exports.

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Hermes 900 drone

Hermes 900 drone. (photo credit:IDF)

The Middle East and Southeast Asia had a record-breaking $65 billion in defense trade in 2015, which is expected to rise to $69b. in 2016, according to IHS Jane’s the Annual Global Defense Trade Report, released on Sunday.

France is on target to take second place among world defense exporters, in front of the current No. 2 Russia, but behind the leading US, which had trade worth $23b. (35 percent of the world total). Germany moved up to the third spot from fifth.

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The Middle East was the largest importing region, with $21.6b. in defense equipment. Saudi Arabia and the UAE imported $11.4b. worth of defense systems in 2015 (17.5% of the global total), up from $8.6 b. in 2014.

According to the data, Arab countries led Israel in defense imports, but Israel was tops in regional exports with around $2b., landing it in eighth place.

The report found that US trade to the region has been driven by sales of military aircraft and related systems.

“The global defense trade market has never seen an increase as large as the one we saw between 2014 and 2015,” said Ben Moores, a senior IHS analyst.

“The combined value of Saudi Arabia and the UAE’s defense imports is more than all of Western Europe’s defense imports combined,” Moores said. Saudi Arabia’s imports grew from $6 billion to $9.3 billion.

“The US, Canada, France and the UK are the main exporters of defense equipment to the Middle East and beneficiaries of this spending boom,” Moores said.

The report examined trends in the global defense market across 65 countries using data from the IHS Aerospace, Defense & Security Markets Forecast database, a publicly sourced global forecasting tool that tracks current and future programs.

The study includes production, R&D, logistics, and service revenues related to export.

Munitions and small arms were not included in the study and neither were homeland security or intelligence programs.

Canada is the second-largest exporter to the region, with $2.7b. in sales. Germany and Russia each had 25% growth in exports to the region with $1.4 and $1.3 billion respectively.

Russia is likely to increase its trade in the region as post-sanctions Iran starts to replace its old defense equipment, said the report.

Most of France’s sales went to India, Saudi Arabia, Australia, Qatar, Egypt and the UAE.

Another finding is that imports increased by 71% to Southeast Asia from 2009 to 2016.

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