Author:Smith, Dexter Jerome

Two huge fighter acquisitions by the UAE Air Force within six months of each other underline the linkage being made by the UAE leadership between national prosperity and military strength. The UAE Army is well into its upgrade with a $3.5 billion procurement of Leclerc tanks from Giat of France -- the UAE's biggest offset programme so far. The UAE Air Force expansion, including buying 30 French Mirage 2000-9 fighters and 80 new-version F-16s from the US, will cost upwards of $11 billion and yield an offset three times that for the Leclerc tanks.

The upgrading of the UAE Air Force is to be by far the biggest of the armed forces expansion plans. The UAE Navy will be the last service to benefit. It has had $2 billion earmarked for what is known as Project Liwa -- a three-phase acquisition of frigates, offshore patrol vessels and naval shipyard facilities. As the UAE requires a minimum offset of 60 per cent on large import programmes, and these air force and naval procurements both began being bid for about five years ago, they represent a massive pent-up injection of investment in the UAE.

In so far as budget contingencies have been building up year after year to finance these acquisitions, the repeated deferrals of these expenditures must have had a deflationary effect on the UAE economy. The bigger than expected size and the timing of the two fighter acquisitions must thus be seen as a particularly strong government-led stimulus to growth in the UAE economy through the turn of the century.

Of course the acquisitions and the prolonged bidding period were intended to get the Air Force the aircraft and the weapons it wanted, but the economic impact of these huge expenditures in terms of their timing and likely effect on the economic cycle must have also been an important consideration. The prolonged bidding did doubtless, however, help the UAE Air Force have more of what it wanted for less.

Nevertheless, these economic and value-for-money considerations must not obscure the fact that the sheikhs running the Emirates have linked the health of the economy above all other factors to the strength and prestige of the UAE Air Force, and to the Air Force's Abu Dhabi organisation at that. Nor must the military significance of more than doubling of the UAE Air Force's present fighter strength be ignored.

Indeed, the UAE Air Force's fighter strength is set to become half that of Saudi Arabia's (even after the latter goes through with a delayed...

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