Offsets in the GCC

Executive Summary

GCC, the practice of offsets in the defense arena was pioneered by the Kingdom of Saudi Arabia (KSA). Between 2013 and 2025, the GCC is expected to spend about $1 trillion for defense purposes. Off this, 30% is expected to be dedicated to the sphere of capital expenditures. Though offsets in the GCC have resulted in defense and non-defense enterprises, they display varying degrees of experiential success. For many countries in the GCC, the objective of offsets is to develop indigenous manufacturing capabilities, provide skills development opportunities for nationals and to create jobs. Especially, the UAE has been able to drive through relatively more success via its offset programmes. From being just a large defense items purchaser, the UAE has started taking the first steps towards becoming a defense exporter of repute.

In this report, a comprehensive analysis of the offset industry drivers and trends in the GCC is studied. Policies of multiple national governments in the GCC with respect to offsets are analyzed in order to understand how unique national contexts and characteristics shape the offsets policy of these nations. Also, the various best practices, international and regional, are spotlighted in order to drive forward discussions on emergent offset policy discussions. Moreover, the issue of offsets is also looked through the lens of foreign obligors, in order to allow a holistic picture to emerge for offering multidimensional analysis.