Qatar Seeks New Friends, and Maybe Denel

 - December 1, 2017, 8:32 AM
Qatar defense minister Khalid bin Mohammad Al Attiyah presented a decorative sword to South African president Jacob Zuma when they met on November 1. (Photo: Qatari defense ministry via Middle East Monitor website)

Qatar remains ostracized by its neighbors, a situation that seems to be driving the gas-rich Gulf state to make new investments in defense equipment and companies. Six weeks after announcing its desire to buy 24 Eurofighter Typhoon combat jets, and to strengthen military ties with the UK, the Qatari defense ministry said it is discussing military cooperation with South Africa, including a possible investment in the Denel group.

According to The Sunday Times in London, that investment would be a majority stake, and Qatar would also buy into South African Airways and power utility Eskom. The Qatar defense minister discussed the potential acquisitions with South African president Jacob Zuma in Pretoria in November, the newspaper reported. But there has been no official confirmation of the talks from the South African side.

State-owned Denel has struggled to make money, with few domestic orders for its weapons or UAVs, and some export disappointments. The Rooivalk attack helicopter has also failed to find an export customer. However, two-thirds of the company’s Rand 8 billion ($600 million) revenue comes from exports, and in its annual financial report for 2016-17 last August, Denel said that thanks to cost-cutting, it had “weathered a challenging global economic period.”

But any investment by Qatar in Denel would pose awkward questions for the future of a joint venture with UAE company Tawazun Holdings, which Denel revealed in 2012. The joint venture, Tawazun Dynamics, was established as an export gateway for the modular upgrade that Denel had designed for standard air-dropped Mk 80 bombs, adding GPS/inertial, imaging infrared or semi-active laser guidance options, plus winglets and booster rocket options for range extension. Tawazun Dynamics displayed some of these options at the recent Dubai Airshow.

Together with Bahrain, Egypt and Saudi Arabia, the UAE cut diplomatic and trade ties with Qatar in early June, accusing it of supporting terrorism, which Doha denies. Qatar was obliged to seek food supplies, new shipping routes, and new airways, from Iran, Kuwait, Oman and Turkey.

Predictably, all discussion concerning Qatar was suppressed at the Dubai Airshow and the associated Dubai International Air Chiefs Conference (DIAC). Eurofighter opted not to discuss customers at its media briefing during the show. Kuwait, Oman, and Saudi Arabia have bought the combat jet, while the negotiations with Qatar continue. The Eurofighter was a third combat aircraft choice for Qatar, which had already bought 24 Dassault Rafales in 2015 and 36 Boeing F-15QAs in 2016.

None of these jets have yet entered service. When asked last month about how Qatar would find air and groundcrew to man the forthcoming F-15s, U.S. Air Forces Central Command chief Lt. Gen. Jeffrey Harrigan said he had discussed the subject with the Qatar defense minister and air chief, who told him that they “recognize the challenges.”

Ironically, in a November 1 notification to the U.S. Congress of a potential $1.1 billion foreign military sale of airbase construction and support services for the F-15QA fleet, the Pentagon said that “Qatar is an important force for stability and economic progress in the Persian Gulf region.” Harrigan said previously that the row between the Gulf states had not affected his operations in the region. Qatar’s Al Udeid airbase houses the Combined Air Operations Center (CAOC) for Operation Inherent Resolve over Iraq and Syria and Operation Resolute Support over Afghanistan, as well as U.S. and coalition aircraft that fly in those operations.