Offsets in the GCC

Pages 45
Tables 7
Charts 7
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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 sp.....


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.


  1. Executive Summary
  2. What are Offsets?
  3. The Offset Market Dynamics
  4. Offset Policies – A Flavour
  5. Offset Trends in the GCC
  6. Implementing Offsets in the GCC
  7. Strategic and Proactive Use of Offsets in the GCC: Case Study of the UAE
  8. Some International Case Studies
  9. Criticism of Offsets
  10. Policy Recommendations & Best Practices
  11. Appendix

Tables & Charts

2.1 Evolution of Defense Offset Programs Value Chain
3.1 Offset Penalties Summary, Select GCC countries
4.1 Offset Policy Summary, as of March 2010
7.1 Key Elements of UAE Offset Policy (as of 2011)
7.2 Areas Receiving the Highest Multiplier Effect (as of 2011)
7.3 Calculation for Application of Additional Multipliers (as of 2011)
11.1 US contractors, 2012 revenue share by geography

2.1 Classes of Offset Programmes
3.1 Offset Obligations of Top 12 Global Defense Contractors, 2013, $bn (Global)
3.2 The Top Five Exporters’ share of international arms exports (%), 2009–13
4.1 Prevailing Obligations on Defense Imports, 2011-2016, % of Total Defense Contracts Value
5.1 Comparing GCC Military Spend in conjunction with GDP, 2011; $bn
11.1 Forecast offset returns to be accrued from US-headquartered prime contractors -2012 to 2022
11.2 Economic gains through accrued offset -average 2010 to 2013



Offsets in the GCC

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