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London (UPI) Jun 26, 2013
Fear of spreading regional unrest, coupled with strong intent and financial wherewithal, is fueling a Middle East market for unmanned aerial vehicles, an analysis from market research firm Frost & Sullivan says.
"The lack of UAV capability in the larger Middle East states significantly influences regional power dynamics," it said. "For instance, the Hezbollah movement recently acknowledged its use of UAVs against Israel. Gulf Arab states are alarmed at the civil war in Syria and want to ensure that popular uprisings in North Africa do not spread to the gulf.
"They are also concerned about Iran's nuclear program. As a result, every large country in the region understands the need to acquire UAVs" for reconnaissance, surveillance and intelligence missions.
Although the interest in UAVs is growing, particularly in larger gulf states such as the United Arab Emirates, sources for the aircraft are few. Currently, the United States and Israel are the world's top exporters of UAVs, but both face obstacles to cashing in directly on growing Arab demand, the report said.
The U.S. Missile Technology Control Regime, created to stop the spread of cruise missiles and ballistic missiles, also covers the export by U.S. manufacturers of unmanned aerial vehicles since some can be used to deliver weapons.
Possible Israeli exports would be a non-starter given its lack of ties with Arab militaries and history of armed conflict with the Arabs.
"The U.S. seems to understand the strategic implications of not catering to the Middle East and may be considering options to bypass MTCR or amend existing norms in order to tap the Middle East market," said Frost & Sullivan Aerospace & Defense Senior Analyst Mahendran Arjunraja. "One way to bypass the MTCR is by providing UAV 'services' instead of selling the equipment. When UAV capability is rented, the ownership of the equipment still lies with the supplier country.
The recent sale of intelligence, surveillance, and reconnaissance (ISR)-only UAVs (General Atomics's Predator drones) to UAE shows the United States is willing to relax restrictions to grab market opportunities.
"A large number of U.S. UAV companies are also forging ties with local partners," he said. "Forging ties with international companies while encouraging domestic development through offsets and technology transfers offers Middle East countries a shorter route to success" in obtaining the capability.
An alternative source for unmanned aerial vehicles -- Europe -- is not promising for the Middle East. Britain and France have limited UAV capability (Britain is a major customer for Israeli UAVs).
Aerospace companies in both countries earlier this month joined in urging a continentwide collaborative effort to develop and manufacture the aircraft.
The U.S. Congressional Research Service, however, recently wrote that European industries "appear to be focused on potential sales to non-military government and commercial customers."
Turkey could be an potential supplier. It has achieved "significant developments' in unmanned capability, among them its ANKA UAV.
"Efforts at indigenous capability will take some time to materialize and until then, Middle East nations will have to depend on foreign equipment," Arjunraja said.
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