G.C.C. Military Spending in Era of Low Oil Prices

Summary

Dr. Jaroslaw Jarzabek explores military spending increases across G.C.C. states to illuminate the drivers for military expansion and spending in the region, and the relevance of these issues in a global context. The type of weaponry that is commonly purchased by G.C.C. states is not geared toward counterterrorism, but rather to external threats, largely emanating from Iran. While G.C.C. military spending spiked largely in tandem with high oil prices, the current drop in oil prices has yet to result in a reduction in military spending. The cost of G.C.C. military development continues to rise as regional tensions soar, and is potentially unsustainable as Gulf governments attempt to diversify their economies. A reduction in current high military expenditures is unlikely to occur without a broader calming in regional tensions, particularly with Iran.

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Key Points

• The U.S. invasion of Iraq in 2003 triggered a rapid, unprecedented, upward trend in military spending of G.C.C. states
• Domestic unrest and the threat of terrorism do not appear to be the main causes of the recent spike in military spending, as the bulk of arms purchases have largely been conventional heavy weaponry, such as combat aircraft, armored vehicles, and missile systems
• G.C.C. appear to be arming themselves in response to the perceived threat of Iranian military strength, and concern over a U.S. retreat from the region
• The rise in G.C.C. military spending mirrored high oil prices at the time, but a drop in oil prices has not resulted in reduced military spending
• A reduction of tensions between Iran and the G.C.C. would require compromises and concessions from both sides, yet the cost of compromise may be less than that of the current trajectory of military buildups and proxy wars across the region

Read the full Policy Focus here.