2013 will see the beginning of what appears to be a massive increase in Qatari defense spending. For a country that spent a little over half a billion dollars on defense in 2011, to see their defense spending more than double two years later, and then more than double again to almost $3.5b in 2015 is an astonishing acceleration. However, this spike is not the result of a massive, widely distributed military modernization. The jumps are almost entirely due to two enormous buys for PATRIOT missile systems and Terminal High Altitude Area Defense (THAAD), both of which were secured late in 2012. At approximately $9.9b and $6.5b, respectively, the deals secured hundreds of interceptors, dozens of launchers and systems, and all the required support for each program.But how big of a spending jump does this buy really represent? Well, it’s certainly large, but not as big as it seems at first glance. As a point of reference, the 2011 GDP of Qatar was around $175b, according to the CIA World Factbook. If the Qatari government paid the deals in one year, it would correspond to almost 10% of their total GDP – a massive figure considering that a good starting point for modeling a nation’s total yearly defense spending is to assume roughly 4% of GDP. But of course they won’t, and a generous payment plan over ten years would thus equate to around a 1%-of-GDP jump per year. That’s still quite significant, but not as startling as a lump-sum-payment. But we’re not done yet – that figure still assumes that Qatar’s GDP would stay constant over the next ten years, which it certainly will not.
Qatar’s GDP has experienced absolutely meteoric growth rates over the past four decades, and grew at a whopping 18.8% in 2011 according to the World Bank. While that growth is projected to slow in the next few years, largely due to a slowdown in the global petroleum markets, GDP is still estimated to grow between 5%-6% over the next few years. It is also worth mentioning that the Qatari military is rather small in terms of manpower, but they tend to be very well equipped due to available funding. Maybe that purchase isn’t as disproportionately large as it seemed at face value…
Qatar doesn’t have to make an incremental or incomplete purchase – it can just go and eliminate the entire requirement at once.It makes more sense then, that despite the raw monetary value of the contracts, the spending increase is only a reflection of Qatar’s continuing national growth and a new-found ability to afford a comprehensive purchase of the systems to fulfill a relevant national security requirement. They don’t have to make an incremental or incomplete purchase – they can just go and eliminate the entire requirement at once. Clearly Qatar’s investment in missile defense suggests they believe it to be of paramount importance to national security in the coming years, whether to defend against future terrorist acts or inter-state conflict. We could speculate as to whom the Qataris are particularly concerned about, but the more interesting question to ask is whether or not this sort of spending pattern is something we would expect to see elsewhere in the region. Many of the potential threats Qatar could encounter are just as likely to apply to Qatar’s neighbors. So what are the prospects for similar buys then? First, let’s look at some neighboring countries:
The first thing to note is that despite the geographic proximity, there is a wide disparity of wealth distributed across the region. A quick glance across the region shows this pretty clearly:
National estimates for GDP, 2011:
- Jordan: $29b
- Oman: $67.5b
- Iraq: $108b
- Kuwait: $135b
- Algeria: $267b
- UAE: $360b
- Egypt: $525b
- Saudi Arabia: $576b
Of these countries, Jordan, Kuwait, Egypt and Saudi Arabia have PATRIOT systems already, and the UAE has THAAD. These nations may certainly choose to upgrade or expand their systems at a later date, but they are not likely to make the same massive investments as Qatar did. This leaves Oman, Iraq, and Algeria without either system. Algeria is taking its military modernization rather seriously, but investing highly in naval programs (notably, Meko A200/FREMM frigates). Iraq may have the money, but has plenty to invest in before procuring an advanced missile defense system. Oman has a much smaller GDP, and no major projects in the works right now. While they certainly could purchase either system, it would have to be incrementally and in a much smaller quantity than the Qatari buy.
Another buy on par with that of the recent Qatari purchase is highly unlikely. Will we see the proliferation of THAAD and Patriot systems throughout the Middle East? Of course – they already exist in a number of countries and interceptor sales are still high, whether for new missiles or upgrades. New countries will get on the bandwagon at some point, just incrementally. For now, we just have Qatar to thank for keeping things interesting with their large, albeit not wildly disproportionate, purchases.