Is Middle East New Land of Opportunity for K-Defense?

As the power struggle between the U.S. and China continues, recent moves by Middle Eastern countries, long-standing allies and the largest weapon importers from the U.S., are noteworthy.

According to industry sources and foreign media on Sept. 9, Saudi Arabia, Qatar, Kuwait, and the United Arab Emirates (UAE) are among the top 10 countries that have consistently imported U.S. weapons.

From 2015 to 2020, Saudi Arabia in particular purchased weapons worth US$641 billion from the U.S., ranking it first in U.S. foreign weapon exports based on a single country.

However, recently, Saudi Arabia, the world’s largest oil producer, agreed to co-produce multi-purpose drones with China last year. Additionally, the UAE imported 48 advanced trainers from China earlier this year, demonstrating that Middle Eastern countries are expanding their ties with China.

Since its foundation in 1932, Saudi Arabia, which has enjoyed the strong protection of U.S. military power, has been frequently clashing with the U.S. over oil reduction issues since the onset of the Biden administration and the Russia-Ukraine war. On the contrary, they are extensively expanding economic cooperation with China in areas of advanced technology and renewable energy.

With the U.S. focusing on containing China, the weakening of U.S. protection suggests that the defense demand of Middle Eastern countries will continue to grow. An industry insider predicted, “As the U.S. withdraws from its policing role in the Middle East, the defense market in the region is likely to keep growing, offering opportunities for other nations.” Notably, according to the Stockholm International Peace Research Institute (SIPRI), Saudi Arabia’s defense budget last year was US$75 billion, ranking fifth globally.

In response to these changes, the South Korean defense industry is also focusing on capturing the Middle Eastern market. K-Defense has been recognized globally since last year for its superior performance relative to cost. Additionally, the fact that domestic products are based on U.S. weapon systems, making them compatible with weapons previously purchased by Gulf countries, is also seen as a significant advantage.

LIG Nex1 and Hanwha Systems had previously signed an export contract with the UAE last year for the Cheongung-II, worth 4 trillion won. There are strong expectations within the industry that the latter half of this year could see LIG Nex1 and Hanwha Systems hit a “contract jackpot” in Saudi Arabia.