Compliance is currently estimated at below 70 per cent. Analysts believe Yousfi is unlikely to be granted his wish. The gloom surrounding the industry was partially lifted by a report, published by Emirates Industrial Bank, which forecast a worldwide increase in oil consumption. Engineering giants Vickers and Giat, which supply battle tanks to countries throughout the Gulf, announced plans to merge. If it goes ahead, the move will bring tank prices down to record lows, easing budgetary pressure and boosting the defence capabilities of Gulf states.
Budgetary issues are very important to Middle East governments.
Qatar is preparing to buy around 50 new tanks, while Saudi Arabia requires around 150. The government is reviewing taxes in a bid to boost non-oil revenue. It is also looking to boost non-oil income. The sharp drop in oil income as a result of weak oil prices is expected to continue to affect the budget in the next two years. The plan revolves around tightening domestic fiscal policy and boosting oil revenues.