by Staff Writers
Dubai (AFP) April 29, 2014
Military spending between 2014 and 2020 in the Middle East and North Africa will total $920 billion (662 billion euros), IHS Global Insight said in a forecast Tuesday.
The US-based consulting firm did not give an overall breakdown at the end of a forum it hosted in Dubai, but said $27 billion will have been injected into the economies of the Arab nations of the Gulf by 2020 from defence deals via offsets.
Offsets are agreements in which a supplier agrees to buy products from the party to whom it is selling, in order to win the buyer as a customer and offset the buyer's outlay.
Guy Anderson, senior principal analyst at IHS Jane's Aerospace, Defence and Security, said Saudi Arabia will gain most from its offset programme with $12.6 billion to be added to the OPEC kingpin's economy from such deals by 2020.
He said the United Arab Emirates would be in second place, with $12.2 billion added during the same time period.
Turning to the energy sector, IHS forecast that $350 billion in investment will be needed by 2030 to meet the rapid demand for power in the MENA region.
Meanwhile, Farrah Boularas, senior researcher at IHS Energy, said investments in energy refining and related facilities in the six nations of the Gulf Cooperation Council are expected to exceed a cumulative $80 billion through 2020.
"Between 2014 and 2020, IHS expects crude distillation and condensate-splitting capacity additions will increase regional output by around 1.5 million barrels per day," Boularas added.
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