Trade

US approves $2bn military order for Bahrain

March 22, 2024, 8:59 AM

A US M1A2 Abrams tank on exercises. Bahrain's order for 50 tanks has been approved by the US State Department

Kingdom to buy 50 M1A2 Abrams tanks
Jets and missiles recently delivered
Defence spending to increase up to 2029

The US has approved a $2 billion order from Bahrain for advanced battle tanks and other military equipment as the kingdom continues to ramp up its defence spending.

Although the deal is still to be ratified by Congress, the US State Department revealed it is ready to sell 50 M1A2 Abrams tanks to Bahrain, which has a tense relationship with neighbouring Iran.

“The changing dynamics in the Gulf region don’t necessarily mean that tensions won’t escalate later, looking out perhaps a decade,” said Dr. Theodore Karasik, senior advisor at Gulf State Analytics.

“The Kingdom of Bahrain needs to spend more on its military in order to secure the future.”

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Bahrain took delivery of three F-16 Block 70 jets from Lockheed Martin’s South Carolina plant earlier this month.

To date, Lockheed Martin has produced five F-16 Block 70 jets for Bahrain, with an additional 11 in various stages of production and testing.

The company also delivered a shipment of the Patriot Advanced Capability 3 (PAC-3) Missile Segment Enhancement (MSE) interceptors to Bahrain, the first of several shipments of PAC-3 MSEs to the country.

“PAC-3 MSE is a combat-proven Hit-to-Kill interceptor that can defend against tactical ballistic missiles, cruise missiles, advanced threats and aircraft,” said Brenda Davidson, vice president of PAC-3 Programs.

“PAC-3 MSE will help Bahrain deter evolving regional threats and defend its national integrity.”

Bahrain’s defence budget for 2024 stood at $1.5 billion, according to GlobalData, and is forecast to increase at a compound annual growth rate of over 2 percent from 2025 to 2029.

The key sectors in the Bahrain defence market are fixed wing aircraft, missiles and missile defence systems, rotorcraft, naval vessels and surface combatants, and unmanned maritime vehicles among others, said GlobalData, a data analytics company.

The kingdom is home to the US Navy’s Fifth Fleet and is classified as a major non-NATO ally, attained in 2002, which affords it privileged defence cooperation with the US.

In September last year Bahrain and the US signed the Comprehensive Security Integration and Prosperity Agreement, formalising and tightening security cooperation between the two countries.

Bahrain is also a member of the US and UK-led coalition that has struck Yemen’s Iran-allied Houthi militia over attacks on ships operating in the Red Sea.

Annual military spending in the Middle East and North Africa rose 5 percent in 2022 to $203 billion, AGBI calculations suggest, based on a Stockholm International Peace Research Institute (Sipri) report.

Middle East countries remain among the biggest defence spenders as a percentage of GDP.

The total dollar spend, however, is dwarfed by that of the US, which spent $877 billion on defence in 2022, according to the latest figures from Sipri.

At over $120 per barrel Bahrain has the highest fiscal breakeven oil price in the Gulf, with GDP expected to reach $47 billion this year according to the International Monetary Fund, by far the smallest in the GCC bloc of countries.