Geopolitical and Military Changes in the Middle East: An Analysis of the “International Institute for Strategic Studies” Report
The year 2023 was marked by intense dynamics in many political conflicts and military operations, which directly impacted changes in several constants concerning arms deals of various kinds. The most notable development was the expansion in manufacturing and acquiring drones and combat aircraft compared to ground-based systems. This shift highlights a new offensive tendency in Middle Eastern countries, moving away from the previously predominant defensive strategies. This period also saw the emergence of new arms manufacturers, previously less visible, and the beginning of the results from significant efforts in research and development over the past years.
Major Changes in the Middle East:
The report identifies several significant changes affecting the geopolitical situation in the Middle East, including:
Restoration of Diplomatic Relations between Saudi Arabia and Iran:
Saudi Arabia and Iran restored diplomatic relations under an agreement brokered by China, signaling Beijing’s growing interest in shaping the geopolitical landscape in the Middle East. This agreement had a direct impact on military operations in Yemen, where the number of Saudi airstrikes decreased significantly, along with a reduction in Yemeni attacks on Saudi territories. Additionally, China’s mediation reflects the strength of its relations with Iran and their mutual desire to form a strong alliance capable of countering American and European efforts in the region.
Syria’s Return to the Arab League:
Syria rejoined the Arab League after 12 years, following disagreements with its political leadership during the civil war. The battle lines within the country remained largely unchanged from the previous year, and the government showed little interest in encouraging refugees to return from abroad.
Algeria’s Defense Spending:
Algeria recorded the largest defense expenditure in the region, almost doubling from 2022. This increase is due to its significant spending on modernizing combat systems. However, rising inflation and other factors may make it difficult for Algeria to maintain the same levels of defense spending.
Israeli Defense Exports:
Israeli defense exports reached a record level in 2022 and were on track for further increases in 2023, particularly with countries like Germany. However, the ongoing conflict between Israel and Palestinian factions may impact Tel Aviv’s export capabilities, as domestic military needs could outweigh export benefits. There has also been tension with some longstanding buyers of Israeli arms, such as Colombia.
United States Military Focus:
The United States worked to reduce troop deployments in the Middle East to focus more on the Indo-Pacific region, following setbacks due to Iranian naval harassment and coordination with Russia in Syria, as well as the conflict between Hamas and Israel. Despite this, the Pentagon carried out missile defense missions with fighter jets and two aircraft carriers, with groups being deployed to the region to bolster its presence.
Major Arms Deals in the Middle East in 2023:
Key arms deals in 2023 include:
Turkey, UAE, and Saudi Arabia:
Turkish President Recep Tayyip Erdoğan visited Saudi Arabia and the UAE on a tour aimed at mending relations and attracting foreign investment, which Turkey urgently needs due to its struggling economy. Several agreements and deals were signed as part of these visits, including Turkey’s largest-ever defense deal, valued at over $3 billion, for the supply of Bayraktar drones to the Saudi Air Force and Navy, specifically the armed Akıncı drones, with some local manufacturing in Saudi Arabia. Similarly, Erdoğan’s visit to the UAE resulted in the announcement of deals worth $50.7 billion, including a memorandum of understanding between the UAE’s Tawazun Council and Turkey’s Defense Industries Agency. Later in the year, the UAE’s Edge Group announced initial agreements with Turkish electronics companies Aselsan and Baykar, and established a new company to lead its operations in Turkey. The sale of Akıncı drones to Saudi Arabia marks a significant breakthrough for the Turkish industry, which had not previously achieved much success in the market for large, heavy drones.
Israel’s Elbit Systems:
From January to the end of September, Israeli company Elbit Systems announced contracts with Europe exceeding $91 billion, including a $305 million contract to supply the “PULS” multiple rocket launcher system to the Netherlands, and a $252 million deal to supply Denmark with the “PULS” system and Atmos 2000 howitzers. The company stated that Europe was its largest market in the second quarter of the year and anticipated continued high demand for munitions, potentially delivered through many of the company’s European subsidiaries. Israeli Aerospace Industries (IAI) also announced that the first half of 2023 was the most profitable in the company’s history. While details on regional deals were not disclosed, a $3.5 billion deal with Germany for the Arrow 3 missile defense system likely indicates that the second half of the year will be even better. The company also secured sales of suicide drones to four NATO countries, including Estonia. Rafael Advanced Defense Systems also signed additional contracts to export its Spike anti-tank missile series, including a deal with Greece worth €370 million ($402.68 million) and continuing a technical support contract with Poland worth 400 million Polish zlotys ($96.28 million) for Spike-LR missiles to be manufactured by the local company Mesko. With the Hamas attack on Israel in October, Israeli companies may need to redirect production in the short term to meet domestic requirements, but long-term demand from Europe is expected to remain strong, as Israel seeks to secure new sales in Asia and the Middle East.
UAE’s Edge Group:
Throughout 2023, the UAE’s Edge Group completed several mergers and acquisitions of local or foreign companies as part of a strategy to develop strong capabilities in unmanned or autonomous systems, electronic warfare, and guided munitions. In February 2023, Edge acquired a majority stake in Estonian unmanned vehicle company Milrem Robotics, adding to Edge’s offerings in the field of ground-based unmanned systems, such as the Themis vehicle, which was acquired in small numbers by several European armed forces, typically for testing purposes. In September 2023, Edge acquired a 50% stake in Brazilian guided munitions company Siatt, which produces the MSS-1.2 AC anti-tank missile and Mansub anti-ship missile. Edge also signed partnership agreements with Bulgarian electronics companies TBS and Samel 90 to expand its footprint in that country and across Europe. The UAE company has seen significant revenue growth since its establishment in late 2019, but questions remain about the sustainability of this growth beyond sales to the UAE Armed Forces. International acquisitions aim to help Edge penetrate new markets.
Conclusion:
It is clear that Gulf countries were the most fortunate in 2023 in advancing their local military industries, particularly in unmanned aerial and ground systems, positioning themselves in global military markets in the coming years. On the other hand, North African countries focused on purchasing and upgrading weapon systems. The report also highlighted the challenges faced by Israeli companies, whose arms exports are expected to decrease as military operations in Gaza continue.
