Neighbors Contemplating Space Conquest
From Oil to Space: Economic Diversification in the Middle East
Middle Eastern countries are rapidly investing in space to leverage it for economic diversification, national security, and global competitiveness. After decades of minimal and uncoordinated participation, Middle Eastern countries are re-evaluating their approach to space, aiming to capitalize on the opportunities offered by the expanding and evolving space sector.
In just a few years, the Middle East has become one of the most dynamic regions in the world in the space sector, with governments in the region quickly integrating space as a key component of their economic and social diversification strategies.
New Space Paradigms and Hierarchies
The aerospace industry, once dominated by a few leading countries and large consortia with complex technologies, has entered an era of intense competition. A series of unprecedented economic and technological disruptions, often referred to as NewSpace, have shaken the foundations of this sector, opening it up to a larger number of new players. These recent disruptions have exploited innovations in digital and commercial technologies to develop new solutions and business models across the entire space value chain.
Simultaneously, the global organizational landscape has fundamentally changed, with more countries launching their own space programs aimed at creating socio-economic benefits, developing governance capabilities to reduce foreign dependency, stimulating technological innovations, and building their own domestic ecosystems. According to consulting firm Novaspace, the main goal of this strategy is to capture a share of the expanding space economy, estimated to be around $550 billion by 2024. These developments offer significant opportunities for Middle Eastern countries to effectively respond to increasing national, regional, and global challenges.
Space as a Key Factor in Achieving National Aspirations
Most governments in the region have defined ambitious national programs and strategies aimed at organizing their economic and social transformations over the next 10 to 20 years. These national programs, such as Saudi Arabia’s Vision 2030, UAE 2031, Qatar’s Vision 2030, and Oman’s Vision 2040, share common goals, including diversifying national economies away from fossil fuels, promoting a knowledge-based society, building local capacities, and encouraging private investment. Space is seen as a key factor in achieving these national aspirations, explaining the rapid evolution of national space strategies and related investments in the region.
This new approach to space is reflected in the sequential adoption of new space policies and strategies in many countries in the region, through which governments affirm their ambitions and roadmaps for their national space sectors. Over the past eight years, at least seven new national space strategies have been approved: Algeria 2017, UAE 2017, Bahrain 2019, Egypt 2020, Turkey 2021, Oman 2023, and soon Saudi Arabia. As a logical result, many Middle Eastern countries have reviewed their oversight of space activities to improve decision-making and optimize the efficiency of their programs. Most have decided to establish a national space agency, such as the UAE, Turkey, Egypt, and Saudi Arabia, sometimes coexisting with historical space research and development centers and sharing responsibilities in managing national space activities.
The claim of new national space ambitions in recent years has been accompanied by a significant increase in public investment in regional space programs. Over the past 20 years, government spending in the space sector in the Middle East and North Africa has risen from a relatively marginal $90 million in 2004, when Israel was the only country with an organized space program, to $15 billion in 2024, spread across twelve countries, six of which invest more than $100 million in the space sector. The 23rd edition of Novaspace’s governmental space programs suggests that this growth in public investment is expected to continue in the coming years to finance increasingly ambitious programs approaching the standards of leading spacefaring countries.
Program Priorities Tailored to Meet Diverse Aspirations
Programs and priorities depend on national ambitions. Some countries may take a very operational approach to space, primarily investing in satellite applications, like Oman and Qatar, which mainly focus on earth observation and satellite communications for dual purposes. For the most ambitious countries, particularly the UAE and Saudi Arabia, national prestige, regional leadership, and inspiration are key factors driving investments across all space sectors, including, in addition to satellite applications, space exploration, space access, and manned space flights, traditionally the domain of spacefaring nations.
National security and defense are common pillars of national space strategies, accounting for more than 40% of government investments in the space sector in the region today. In a tense geopolitical environment, countries are actively advancing the development of space-based security assets to safeguard their interests.
Developing a National Space Industry: A Major Common Challenge
Among the major challenges facing any new country in the space field is localizing national capabilities supported by a sustainable and competitive national space ecosystem. Undoubtedly, the biggest and most difficult challenge is that national space sectors in the region are often strongly established in governmental institutions and influenced by public entities, focusing more on space-related capabilities with regard to past initiatives at national research and development centers, universities, and scientific institutions. Consequently, most countries have undertaken a profound transformation of their national space industry by establishing national champions as driving engines, creating space funds, and acceleration programs to help the emergence of startups, and promoting foreign direct investment (FDI) and international partnerships. In this context, the recent establishment of the Neo Space Group in Saudi Arabia and the emergence of Space42 and Edge in the UAE as national champions reflect the rapid evolution of the Middle Eastern space ecosystem and the desire to see these national space giants as catalysts for developing national space capabilities.
Pursuing space aspirations is a long journey requiring stability and perseverance in the long term. Although a rapid infusion of financial resources may accelerate this process, developing capabilities, building ecosystems, and leveraging the economic, social, technological, and strategic benefits from space takes time. The region has witnessed rapid and remarkable transformations over the past decade, thanks to new strategies and investment programs. However, only time will reveal their outcomes. The rapid and radical transformation of the global space sector clearly provides an opportunity for Middle Eastern players. However, this opportunity is rapidly diminishing due to a significant integration phase that compels global entities in this sector to readjust their strategies. The region is currently at a critical juncture that requires a precise combination of factors for its future in space—a measured perspective coupled with swift action.
