meed-logo

line1 line2 line3
SIGN IN / REGISTER

Middle East defence spending accelerates

7 May 2023

 

Global military spending reached a record high of $2.24tn in 2022, up 3.7 per cent year-on-year, according to newly compiled data from the Stockholm International Peace Research Institute (SIPRI), as the Ukraine war and tensions in East Asia prompted governments to ramp up their investment in equipment.

It marks the eighth consecutive year of growth in global defence expenditure. The sharpest rise was in Europe, where there was a 13 per cent increase in spending, but the Middle East and North Africa (Mena) region was not far behind, with an 11.2 per cent rise on the previous year.

“The continuous rise in global military expenditure in recent years is a sign that we are living in an increasingly insecure world,” said Nan Tian, a senior researcher with SIPRI’s military expenditure and arms production programme.

“States are bolstering military strength in response to a deteriorating security environment, which they do not foresee improving in the near future.”

Rising regional outlay

The rise in the Mena region’s total to $168bn was mostly due to an increase in spending by Saudi Arabia and Qatar and, to a lesser extent, Lebanon and Iran.

As has long been the case, Saudi Arabia dominated the picture, with a defence outlay of $75bn in 2022 – up 16 per cent on the year before and its first increase since 2018.

Military spending data for the Middle East is often opaque. Other large spenders, according to SIPRI’s database, include Israel ($23.4bn), Qatar ($15.4bn), Algeria ($9.1bn), Kuwait ($8.2bn), Iran ($6.8bn) and Oman ($5.8bn).

However, the institute has no estimates for a number of other countries, most notably the UAE. Its most recent figure for the UAE is for 2014, at which point the defence budget was an estimated $22.8bn, the region’s second-biggest after Saudi Arabia that year.

There are also no current estimates for defence spending by the countries suffering the greatest instability, including Libya, Sudan, Syria and Yemen.

Others have drawn up figures for the UAE, though. The London-based International Institute for Strategic Studies (IISS) estimated the UAE’s defence spend was $20.4bn last year in its recently published Military Balance 2023 report. That marked a 6 per cent rise on the previous year’s estimate.

While the UAE may not have the largest budget in the region, IISS says its armed forces are “arguably the best trained and most capable of all GCC states”.

Unclear Iranian picture

The outlay by Iran is also a matter of some debate, given the questions over the value of the rial and the country’s high inflation rate of around 40 per cent.

SIPRI says that, in local currency terms, Iran’s defence spending grew by 38 per cent to IR1,988tn in 2022. That is equivalent to some $46.9bn at the government’s official exchange rate, but far less at the open market rate used by SIPRI.

Inflationary pressures have become a common concern for countries around the world, even if few are having to cope with price rises as rapid as in Iran. Many Western countries are also dealing with an energy supply crisis due to the war in Ukraine, which has led to prices spiking upwards and sanctions being imposed on Moscow.

The Middle East’s oil exporters have benefitted from elevated oil prices, making it easier to afford the rise in defence spending.

However, the most notable direct consequence of the conflict in Ukraine for the Middle East has been the surge in military cooperation that has followed between Russia and Iran. Moscow’s failure to quickly take control of Ukraine has led to a drawn-out conflict and, as its weapons inventory has become depleted, it has imported drones from Iran to fill in some of the gaps.

That cooperation may yet extend in the other direction, with Iranian media reporting in March a potential deal for Tehran to receive Russian Sukhoi Su-35 fighter jets. Iran will also have gained useful information about the performance of its Shahed 131, Shahed 136 and Mohajer-6 drones in the war.

Lingering Gulf concerns

Such developments will likely concern other Gulf governments, even if regional tensions have eased somewhat due to the rapprochement between Saudi Arabia and Iran, announced via a China-brokered agreement in March.

That fits into a broader regional trend for de-escalation and diplomatic advances. Recent talks between Saudi officials and Yemen’s Houthi rebels in Sanaa could yet pave the way to resolving that conflict – further discussions between the two sides are due to take place in May, possibly in Muscat.

The levels of violence in Libya and Syria have also been on a downward trajectory over the past year, but both remain susceptible to further outbreaks of fighting, as does Iraq.

Elsewhere, though, relations between Algeria and Morocco remain problematic, and the prospects of any peace deal between the Israelis and Palestinians look as distant as ever with the hardline government of Israel’s Prime Minister Benjamin Netanyahu in office.

Any reduction in regional tensions will be a welcome development given the high burden of defence spending on local economies. As IISS points out, many Mena countries’ defence budgets are very large relative to the size of their economies.

As has long been the case, Oman spends more as a proportion of its GDP than any other country in the region, with its 2022 outlay equivalent to 5.9 per cent of GDP, according to IISS calculations.

It is followed by Kuwait at 5 per cent and Saudi Arabia at 4.5 per cent.

The average for the region is 3.8 per cent of GDP, more than double the global average of 1.7 per cent. The overall trend for rising budgets means that the economic burden is unlikely to fall away any time soon.

https://image.digitalinsightresearch.in/uploads/NewsArticle/10816511/main.gif
Dominic Dudley

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Syria seeks interest for $1.16bn Euphrates dam

    7 October 2026

    Register for MEED’s 14-day trial access 

    Syria’s Ministry of Energy has invited expressions of interest (EoIs) for the development of the Halabiyeh-Zalabiyeh dam project on the Euphrates River.

    The project has an indicative total cost of $1.16bn, according to the ministry’s EoI document. This includes $433.7m for the dam and hydropower plant and $729.6m for the pumped-storage power plant (PSP). 

    The scheme includes an 81MW hydroelectric power plant and a pumped-storage facility with a capacity of up to 1,200MW. The project will also include the construction of the dam and associated water-storage infrastructure. 

    The ministry seeks interest from qualified local and international companies, investors and other entities. Interested parties can participate in studies, design, financing, construction, and operation and maintenance of the project. 

    The ministry is considering several potential development structures, including build-own-operate-transfer, build-operate-transfer and public-private partnership models, as well as an engineering, procurement and construction (EPC) structure. It has said it is also open to proposals covering consultancy and financing services.

    The EoI covers several stages, including pre-feasibility and feasibility studies, financing and bankability studies, detailed and executive design, EPC execution, and operation and maintenance.

    The technical specifications envisage a 23-metre-high dam with a reservoir storage capacity of about 219 million cubic metres.

    The hydropower plant will have three generating units, while the 1,200MW PSP will have 3.5 hours of storage capacity and four reversible units.

    The deadline for submitting EoIs is 10 November, with enquiries accepted until 26 October.

    READ THE OCTOBER 2026 MEED BUSINESS REVIEW – click here to view PDF

    Industry and logistics drive development at Neom; Saudi Arabia’s investment priorities realign amid conflict; MEED’s 2026 power developer ranking.

    Distributed to senior decision-makers in the region and around the world, the October 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/20336025/main.jpg
    Mark Dowdall
  • Arada launches UAE construction arm with Roberts

    7 October 2026

    Register for MEED’s 14-day trial access 

    UAE developer Arada has integrated Australian contractor Roberts into the UAE market as part of its wider business strategy.

    Arada acquired Roberts in 2025 after entering the Australian market. The tier-one contractor delivers projects in the healthcare, education, commercial, residential, hospitality, industrial, life sciences and defence sectors.

    At the time of the acquisition, Arada said it planned to invest about $20m in Roberts. The investment is intended to give the developer greater control over the delivery of its Australian projects and support Roberts’ expansion into markets including the UAE.

    Arada has said it could invest up to $100m in Roberts’ expansion into new sectors and markets. The company is targeting $1bn in annual revenue from Roberts by 2028.

    Roberts has established a UAE office, with a head office team already in place. Arada said the contractor’s capabilities will support the delivery of its high-rise residential and social infrastructure projects.

    The contractor’s first UAE project will be phase two of Arada Central Business District, a commercial development within Aljada in Sharjah. Arada is developing the AED35bn ($9.5bn) mixed-use project.

    Roberts is also providing preconstruction services for several Arada projects in Dubai and Sharjah, ahead of starting site work.

    READ THE OCTOBER 2026 MEED BUSINESS REVIEW – click here to view PDF

    Industry and logistics drive development at Neom; Saudi Arabia’s investment priorities realign amid conflict; MEED’s 2026 power developer ranking.

    Distributed to senior decision-makers in the region and around the world, the October 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/20334926/main.jpg
    Yasir Iqbal
  • Expo Riyadh sets October deadline for Saudi Arabia pavilion

    7 October 2026

     

    Expo 2030 Riyadh Company (ERC), tasked with delivering the Expo 2030 Riyadh venue, has set a deadline of 25 October for bids for a contract to build the Saudi Arabia pavilion.

    The tender was issued on 19 May, with an initial bid submission deadline of 26 August.

    The pavilion is a major asset located within the KSA District on the eastern side of the Expo 2030 Riyadh masterplan, in the Loop of Nations district.

    Construction activity at the Expo site is accelerating, with Riyadh moving to award its first major vertical contracts and advancing infrastructure works across the programme.

    Last month, MEED reported that ERC had received contractor interest on 14 September for a contract to design and build a convention centre in the site’s Collaboration District.

    ERC also tendered a contract to deliver the Souq areas within the Expo site, as MEED exclusively reported on 8 September.

    These areas are divided into five precincts, with a total development area of about 300,000 square metres.

    Also in September, Saudi Arabia’s Royal Commission for Riyadh City awarded a design-and-build contract to construct a new metro station serving the Expo 2030 site.

    In April, ERC awarded two contracts for the next phase of infrastructure works at the site to local firm Al-Yamama Company.

    The scope covered the construction of road networks and infrastructure for water, sewage, electricity, telecommunications and electric vehicle (EV) charging.

    These awards followed ERC’s January award of an estimated SR1bn ($267m) contract for initial infrastructure works at the site to local firm Nesma & Partners.

    That scope covered about 50 kilometres of integrated infrastructure networks, including internal roads and essential utilities such as water, sewage, electrical and communications systems, as well as EV charging stations.

    The masterplan covers 6 square kilometres, making it one of the largest sites ever designated for a World Expo event. Situated north of the Saudi capital, the site will be near the future King Salman International airport and will provide direct access to Riyadh landmarks.

    The Public Investment Fund, Saudi Arabia’s sovereign wealth vehicle, launched ERC – a wholly owned subsidiary – in June 2025 to build and operate facilities for Expo 2030.

    READ THE OCTOBER 2026 MEED BUSINESS REVIEW – click here to view PDF

    Industry and logistics drive development at Neom; Saudi Arabia’s investment priorities realign amid conflict; MEED’s 2026 power developer ranking.

    Distributed to senior decision-makers in the region and around the world, the October 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/20334856/main.jpg
    Yasir Iqbal
  • Kuwait on track to hit oil production target

    7 October 2026

    Kuwait is on track to meet its target of having 4 million barrels a day (b/d) of oil production capacity by 2035, according to Kuwait Petroleum Corporation (KPC) chief executive Shaikh Nawaf Al-Sabah.

    Al-Sabah also said Kuwait is on course to increase non-associated gas production to 2 billion cubic feet a day by 2040.

    His comments come amid an ongoing crisis in Kuwait’s oil and gas sector linked to the regional conflict that began when the US and Israel attacked Iran on 28 February.

    The subsequent war has significantly disrupted shipping through the Strait of Hormuz, which is a crucial export route for Kuwaiti crude oil.

    Kuwait is currently producing around 2 million b/d of oil, down from 2.6 million b/d before the US and Israel attack.

    Speaking at a conference in London, Al-Sabah said: “We have the capacity to go back up to our current maximum sustainable capacity of 3 million b/d, if we have the export routes available, and this comes down to the ability to move oil through the Strait.”

    KPC is investing $9bn-$10bn a year in capital expenditure to meet its oil and gas production goals, according to Al-Sabah.

    He said: “We are doing this because we recognise that it is our hydrocarbons that will be most in demand a decade from now, and two decades from now – in fact, for the rest of our lifetimes.”

    Project Seef

    KPC is pushing ahead with the Al-Seef project, which focuses on developing three large offshore oil discoveries, Al-Sabah said.

    The offshore fields are known as Nokhatha, Julaia and Jazza. The development was first announced in February this year, about two weeks before the US and Israel attack on Iran.

    Al-Sabah said KPC is continuing with the project and believes the three fields collectively hold more than 3 billion barrels of recoverable oil.

    He said: “We are asking international oil companies to partner with us to develop those resources under an operating services contract.

    “So, we’re moving ahead according to the exact same schedule that we had put together even before the war began.”

    Al-Sabah did not say which international oil companies KPC has approached to help develop the three offshore fields.

    READ THE OCTOBER 2026 MEED BUSINESS REVIEW – click here to view PDF

    Industry and logistics drive development at Neom; Saudi Arabia’s investment priorities realign amid conflict; MEED’s 2026 power developer ranking.

    Distributed to senior decision-makers in the region and around the world, the October 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/20315147/main.jpg
    Wil Crisp
  • Roshn plans new flagship development in Riyadh

    7 October 2026

     

    Saudi developer Roshn Group plans to develop its next flagship scheme in north Riyadh, spanning an area of 13.7 square kilometres. 

    Roshn is looking to appoint lead design consultants to deliver detailed design, tender documentation and construction documents across the scheme, known as Plot 1.

    The scope covers all infrastructure, utilities, public realm works and site adaptation of Roshn’s residential prototypes, split across two work packages.

    Part 1 covers phases A, B and E, which collectively span about 7.8 million square metres (sq m) and will comprise 17,000 units.

    Part 2 includes phases C and D, which will span about 4.7 million sq m and comprise more than 15,000 units.

    The development is bordered by Expo 2030, King Abdulaziz Park, the Sports Innovation Lab Zone and the National Housing Company-developed Khozam district.

    It will be a residential-led mixed-use development, also featuring retail, offices, hospitality, education and civic facilities.

    Connectivity is a core plank of the masterplan, with two metro stations planned: one at the existing Line 4/proposed Line 7 interchange and another dedicated Line 7 stop. The scheme would also be served by the future Qiddiya high-speed rail and a possible King Salman Road diversion.

    Plot 1 builds on Roshn’s existing footprint in the capital, notably the multi-phase Sedra community, as the developer expands beyond single-family housing into mixed-use districts under its Roshn 3.0 strategy.

    Last month, Roshn Group announced that it had signed a preliminary agreement with Talaat Moustafa Group (TMG) Saudi, the local subsidiary of Egyptian developer Talaat Moustafa Group, to establish a joint venture to explore and develop a mixed-use project in Riyadh.

    Under the agreement, TMG will hold a 51% stake in the joint company, while Roshn Group will hold 49%.

    The agreement sets out a framework for the two groups to assess a potential partnership for the project’s phased development, which is planned as a residential-led, mixed-use community featuring retail, commercial, hospitality, leisure, healthcare and education facilities, alongside parks and public spaces.

    Roshn Group and TMG Saudi plan to conduct detailed master planning and develop the project’s business case.

    Preliminary studies indicate the development could include more than 55,000 residential units across all phases.

    Roshn Group did not disclose the exact project location in its announcement.

    As a Public Investment Fund-owned developer, Roshn remains a key vehicle for delivering Vision 2030’s housing programme, which targets 70% Saudi home ownership, alongside the kingdom’s wider quality-of-life and economic diversification agendas.

    READ THE OCTOBER 2026 MEED BUSINESS REVIEW – click here to view PDF

    Industry and logistics drive development at Neom; Saudi Arabia’s investment priorities realign amid conflict; MEED’s 2026 power developer ranking.

    Distributed to senior decision-makers in the region and around the world, the October 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/19786131/main.jpg
    Yasir Iqbal