UAE announces $3.09 billion in defense deals

The United Arab Emirates has announced $ 3.09 billion in defense deals in three days, the official WAM news agency reported on Wednesday.

Major General Obaid al-Ketbi announced 3.68 billion dirhams (about $1 billion) on Wednesday, according to WAM.

"With the 8 billion dirhams worth of defense deals... on the second and third day of the event, today's announcements brought to 11.680 billion dirhams the total value of contracts" announced at a defense expo in Abu Dhabi, WAM said.

Among other contracts announced on Wednesday, the "Abu Dhabi Ship Building Company was awarded an 800.5 million dirham ($218.1 million) contract for purchase of RAM missiles," Ketbi said.

The 10th International Defense Exhibition and Conference in Abu Dhabi runs until Thursday.

The largest deal announced on Tuesday was one for 2.018 billion dirhams ($550 million) with Emiraje Systems to implement a command, control, communications, computers and intelligence (C4I) system, Ketbi said.

Also on Tuesday, a Lockheed Martin official said that he expected an agreement to be concluded this spring for the United Arab Emirates to buy an anti-ballistic missile system reputedly worth about $7 billion.

"I think ... sometime this spring, we'll get some positive news that the two governments have reached an agreement" on the Terminal High Altitude Area Defence system, said Dennis Cavin, Lockheed Martin vice president for international air and missile defence.

Manufacturers from around the world are racing to seal contracts with Gulf states, fearful of Iran and with their spending power buoyed by high oil prices.

The six Gulf Cooperation Council countries -- Saudi Arabia, Bahrain, UAE, Oman, Qatar, Kuwait -- along with Jordan are set to spend $68 billion (49.6 billion euros) on defence in 2011, according to research firm Frost & Sullivan.

Turmoil shake up region

Their spending is expected to reach nearly $80 billion in 2015.

The deals come as several Arab leaders are battling widespread revolts against their rules that have already Egyptian president Hosni Mubarak and Tunisian president Zine El-Abidine Ben Ali.

Trade insurance costs for United Arab Emirates exporters may jump by up to 20 percent in the short term due to ongoing political turmoil in the Arab world, the Gulf Arab country's export credit agency said on Wednesday.

Popular unrest over entrenched poverty and high unemployment has been sweeping through mainly poorer Arab countries in the Middle East and North Africa over the past two months, unseating military-backed oppressive leaders in Tunisia and Egypt.

"There will definitely be an increase in premium rates to countries like Egypt, Tunisia, and Libya," said Schuyler D'Souza, chief commercial officer at the Export Credit Insurance Company of the Emirates (ECIE), owned by Dubai's government.

"On average, insurers price these markets between 0.45 to 0.6 percent. But in the current political situation in these countries, premium rates are expected to rise at an average of 15 to 20 percent," he said. "Libya is an area of concern to us."

While that looks like a tiny increase for now relative to overall costs, Dubai's export agency warned of the impact on companies.

"Any increase in costs for our exporters makes them rather uncompetitive in the global environment," said Ashraf Mahate of the Dubai Exports Development Corporation. "If the situation continues, then exporters may even seek to look at alternative forms of payment security such as cash against documents."

He also said the large gold and jewelry sector would be less affected by the increase in credit insurance premiums than food and industrial products businesses.

Weeks of political unrest that also engulfed Bahrain have sent debt protection costs and yields on government debt up across the Gulf, the world's top oil exporting region.