The UAE, meanwhile, appears to have the budget and the bureaucratic focus to execute an ambitious vehicle acquisition. “They are able because of the way they are funded to have a long-term view,” admires the U.S. official. “They can look out five to seven years and say, 'this is the way we are going.' They're bringing in expertise and underwriting it with the resources necessary to make it happen.”
Part of that long-term view is to turn the program into a pipeline for know-how and technology to create a self-sustaining industrial base. “Of the GCC [Gulf Cooperation Council] states, the UAE is by far the leader in offset policy,” explained Theodore Karasik, a security expert at Inegma, a Dubai-based think tank. Offsets traditionally have emphasized job creation, “but part of this policy is to create an indigenous arms industry with the idea to be an exporter of this kind of equipment in the future.” New offset guidelines in the UAE incentivize “output-based” projects that create economic value-added—such as the sales and profits generated by a joint venture.
But there are multiple challenges in building such an industry from scratch, quite literally in the middle of the desert. And integrating a 25-ton fighting vehicle requires a specialized workforce, infrastructure and complex supply chain that do not exist in the region, said an industry executive close to the competition.
In turn, companies must make a hard risk-return analysis before transferring their most sensitive technologies to an inexperienced local partner, he said. Key to that assessment is the business potential beyond the basic production run. “If there can be a long-term solution that enwraps design, manufacturing and maintenance, for the home market in the UAE and exports from the UAE, that's a bit of a game-changer,” said John Louth, deputy head of the Defense Industries and Society Program at the U.K.'s RUSI think tank.
The contract award is scheduled to occur this year. Barring a major hiccup (the UAE's July purchase of 750 Oshkosh 4x4 M-ATVs adds a new wrinkle to the 8x8 decision), “in five years, do I see them being a major player on the world scene? I would say it's better than 50/50 that they will be,” said the U.S. official.