U.A.E. Defense Sector Poised for Next Steps

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October 20, 2020

Executives from four leading U.S. defense companies – Boeing, General Atomics, Northrop Grumman, and Raytheon Emirates – discussed keys to success in the U.A.E. defense market, U.A.E. procurement priorities, and avenues for enhanced bilateral partnership during a U.S.-U.A.E. Business Council webinar that was moderated by Kirsten Fontenrose, Director of the Scowcroft Middle East Security Initiative at the Atlantic Council. Please click here for a video of the event.

 

Clockwise from top left: Alan Davis, CEO, Raytheon Emirates; Paul Casey, Director of Business Development, Northrop Grumman; Bernie Dunn, Vice President, Boeing International and President, Boeing MENAT; Kirsten Fontenrose, Director of Scowcroft Middle East Security Initiative, Atlantic Council; Danny Sebright, President, U.S.-U.A.E. Business Council; Tamer Aly, Regional Director of Business Development, General Atomics Aeronautical Systems

Bernie Dunn, Vice President of Boeing International and President of Boeing Middle East, North Africa, and Turkey, began the session by discussing Boeing’s “unique” defense and commercial relationship with the U.A.E. dating back to 1978. In so doing, he flagged Boeing’s partnership with Mubadala Investment Company surrounding Strata and its partnership with Tawazun on what is now EDGE Precision Industries.

Tamer Aly, Regional Director of Business Development at General Atomics Aeronautical Systems, then spoke about the “common philosophy” that the U.A.E. and General Atomics share in investing in next generation technology as well as its people. He remarked, “There is no country that invests more in the future of its people than the U.A.E.” The U.A.E. agreed in 2013 to purchase unarmed Predator X-P U.A.V.s from General Atomics, making the U.A.E. the first non-NATO customer for this drone.

Paul Casey, Director of Business Development at Northrop Grumman, subsequently remarked that what sets the U.A.E. apart is its “ambition, vision, and determination.” He noted, “Once the U.A.E. has a vision and strategy, they actually implement it, even if it takes 10, 15, or 20 years.” Speaking of the defense space in particular, he said, “The U.A.E. may be outnumbered on the battlefield, but they are never outclassed, due to its technological edge.” Northrop Grumman has been a close and trusted partner of the U.A.E. for decades across a wide variety of systems, including long-range surveillance radars.

Alan Davis, Chief Executive of Raytheon Emirates, then spoke about Raytheon’s 32-year presence in the U.A.E., the establishment of Raytheon Emirates as an Abu Dhabi-based “landed company,” and its over 100 employees in the U.A.E. supporting various systems in the region. Raytheon Emirates’ extensive work in the U.A.E. includes that on the Patriot missile defense system.

Ms. Fontenrose then moderated a discussion among the panelists that initially centered on what the panelists agreed was one of the greatest threats to regional security: UAVs. Referencing the “well-executed strike” by UAVs on Saudi Arabia’s Abqaiq oil facility, Mr. Dunn elaborated on the ability of “relatively inexpensive” UAVs to evade sophisticated systems and the consequent need for “persistent surveillance” of potential targets. Mr. Davis shared considerations about how to counter this threat through an integrated systems approach and layered defense.

Panelists looked ahead to shifts in technology, geopolitics, global business, demographics, climate, and other realms that they see transforming the Emirati relationship with U.S. defense companies in the coming 5-10 years. Honing in on technology, Mr. Aly said that the U.A.E. “continually punches above its weight class” by “investing in technologies that are force multipliers, allowing them to do more with less.” Mr. Davis spoke about the development of the U.A.E.’s industrial base, so that they can sustain those systems they purchase as well as develop systems of their own. Moreover, Mr. Dunn spoke about the impact of lower oil prices on U.A.E. “thinking and budgets.”

Chinese influence in the Gulf was raised as a new challenge from a security standpoint. Panelists agreed that there is no reason for U.S. defense companies to fear “fair competition” from China given the technological prowess of U.S. companies. However, they expressed concern about safeguarding U.S. technology from Chinese espionage, given that China, as Mr. Casey noted, is “very good at stealing IP and exploiting others’ IP.”

Opportunities related to the Strategic Dialogue, which the U.A.E. and U.S. Governments are launching today, were highlighted. Defense and space are part of the eight domains comprising the dialogue. As such, Mr. Casey noted that, “This is a great opportunity for Team USA to become the partner of preference for the U.A.E. in its space endeavors.”

Mr. Dunn spoke about the “enormous” commercial opportunities presented by the Abraham Accords, as evidenced by an Emirati ship offloading cargo in Israel and the flight of a Boeing “Greenliner” between Israel and the U.A.E. Turning to the implications for the defense industry in particular, Mr. Davis spoke of possibilities for collaboration involving international consortiums with Emirati, Israeli, and American firms.

Mr. Casey raised the U.A.E.’s progress on protecting sensitive technology and spoke of the “tremendous improvement in the U.A.E.’s understanding of the needs of DTSA and its management of risk.” He also spoke of the increased confidence of U.S. officials in the U.A.E.’s ability to protect sensitive technologies, noting this confidence which likely only be furthered by the new Strategic Dialogue. For his part, Mr. Aly remarked that the U.A.E. “has a long track record of doing right by those who invest in the country” and they “understand the need to put in place measures” to safeguard technology.

The panelists spoke about some of the efforts that they are taking to build the local U.A.E. workforce and local capabilities. Referencing observations from Raytheon’s internship program and partnerships with U.A.E. universities, Mr. Davis remarked, “There is no shortage of talent here in the U.A.E.” After noting Boeing’s work with local NGOs in the field of STEM education, Mr. Dunn spoke of his desire to see more Emiratis enter the private sector, which will be the driver of the country’s economy.

Finally, the panel concluded with words of advice from Mr. Dunn for smaller companies entering the U.A.E. defense market. Mr. Dunn cautioned that companies “need to implement the three ‘p’s: presence, persistence, and patience.” He also emphasized the need to “understand customers’ needs and priorities and make them yours.” He also cautioned, “You have to get ready for a long ride because this is a marathon not a sprint.”

This event, which is part of the Business Council’s “Back to Business” webinar series, was attended by over 200 U.S. and U.A.E. business executives and government officials.

For more information about the U.S.-U.A.E. defense and security relationship, please click here. For more information about the series and an exciting slate of upcoming events, please contact the U.S.-U.A.E. Business Council’s Head of Communications, Mary Zuccarello, at mzuccarello@usuaebusiness.org.