US supporting Gulf bid to localise military and defence production, official says

The US defence industry is gathering more information on doing business with UAE's Edge

Ellen Lord, the United States under secretary of defence for acquisition and sustainment, said the US is "trying to adjust and support" Gulf countries. Reuters

The US is adapting its way of doing business in the Gulf as regional governments look to localise military and defence production as part of economic overhaul plans to diversify away from oil, create jobs and develop advanced technology.

The US Department of Defence met with industry partners to understand the opportunities and challenges of doing business in the region, on the eve of the Dubai Airshow, Ellen Lord, the US under secretary of defence for acquisition and sustainment, told reporters in Dubai on Saturday.

"In Saudi Arabia the real focus is on jobs, so localisation in terms of manufacturing, and here in the UAE the focus is on technology transfer," Ms Lord said. "As each of these nations changes the way they go about procuring their weapons, we are trying to adjust and support them."

Gulf countries are moving towards local military production and procurement, signalling a shift in the way they do business with international defence companies. Tech-transfers and commitments to produce and buy equipment locally have become key factors in determining which companies win global arms sales orders from purchasing companies.

There is increasing demand for agreements beyond simple "off-set" arrangements, projects that make weapons deals more attractive, to more complex knowledge-transfers and a slice of the work on weapons programmes to seal deals.

The UAE earlier this month announced the creation of Edge, a new defence conglomerate for developing advanced technology for weapons systems, cyber protection and electronic warfare.

The entity will form partnerships with global defence companies to speed up innovations against cyber attacks, drones, the spread of misinformation and other threats to security in the UAE and abroad.

The US is interested in seeking more information about the conglomerate and on doing business, Ms Lord said.

Global economic headwinds have not dampened the region's appetite for weapons procurement and the US has also offered the UAE more flexibility in transaction payment methods, she said.