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Saudi Vision 2030: From arms imports to military industrialization
http://saudigazette.com.sa/opinion/saudi-vision-2030-arms-imports-military-industrialization/
http://saudigazette.com.sa/opinion/saudi-vision-2030-arms-imports-military-industrialization/
Dr. Ibrahim Al-Othaimin
The American business magazine, Forbes, observed that Saudi Vision 2030, laid out by Deputy Crown Prince Muhammad Bin Salman, second deputy premier and minister of defense, and approved by the Council of Ministers, “would, in an unpredictable manner, enable Saudi Arabia to realize its dream of becoming one of the world’s major weapon manufacturers after having long been a major weapons importing country”. The development of “military and advanced industries” adopted by Saudi Vision 2030, which aims to escalate the nationalization of the military industry from the present 2 percent to 50 percent seems, for the following reasons, to be an ambitious, but realistic and applicable vision.
Firstly, military infrastructure. Saudi Arabia will not start from scratch as it has a long history of military industrialization, together with a huge infrastructure. Saudi Arabia’s history in military industrialization started with its establishment. In 1949, the late King Abdulaziz ordered the construction of military factories, after which two agreements were signed stipulating details in which the factories were to be supplied with the necessary devices, equipment and machinery.
In 1953, King Saud Bin Abdulaziz opened the first ammunition factory in Al-Kharj, Riyadh, constructed by a French company. In his opening speech, he said: “The establishment of this factory is only the first step; further steps will be taken to raise the standard of our army and obviate the necessity for the import of arms”. Many more facilities and factories were opened and included the production of arms, bombs and ammunition.
Member of the Shoura Council, Flight Lieutenant Abdullah Al-Sadoun, remarked that “Saudi Arabia is one of the first countries to have a military production and maintenance industry; it has developed a number of maintenance projects for aircraft and advanced electronic engines within its arms deals”. The year 1986 witnessed a new phase for military industries, represented by the issuance of Royal approval for military factories to form the General Organization for Military Industries, which acts as an independent entity with a board of directors headed by the Minister of Defense. Since then, the Organization has produced a range of military products.
On March 28, 2016, the Chairman of the General Organization for Military Industries, Mohammad Al-Mady, in his speech on the opening of a missiles factory, said: “The Organization has produced a range of products, the most important of which are the production of light arms, ammunition of all kinds, armored vehicles, military communication devices, reconnaissance drones, and military clothing and equipment”. Thus, Saudi Arabia has extensive experience that can be relied on for the implementation of Saudi Vision 2030.
Secondly, the existence of the OFFSET program. This was addressed by Deputy Crown Prince Muhammad Bin Salman in his interview with Turki Al-Dakheel on Al Arabiya. OFFSET requires foreign arms exporting companies to invest part of their contract funds in the local market and industry of the purchase contract owner’s country. Saudi Arabia launched the OFFSET program in 1985, obliging foreign companies to invest 25-35 percent of the value of defense contracts in industrial companies or in joint projects with local companies. The program aimed to import and nationalize advanced technology which was achieved by establishing the Advanced Electronics Company.
The Advanced Electronics Company is a Saudi national company which aims to develop strategic local know-how, such as the manufacturing, maintenance and provision of advanced electronic systems to be used in different civil and military sectors. This company’s products include radios for military use, electronic panels for tanks, monitoring and remote control systems and environmental systems. Through American investment, the OFFSET program also brought about Alsalam Aircraft Company, one of the largest heavy maintenance companies in the world. The company helped to prepare Saudi civil aviation to accommodate Saudi Arabian Airlines’ Boeing and Airbus fleets. It also prepared Saudi military aviation to accommodate the Tornado aircraft fleet, F-15, early warning aircrafts, refueling aircrafts (AWACS), and C-130 of the Royal Saudi Air Force. All of this was achieved in Saudi Arabia using local manpower.
Therefore, OFFSET would also be a cornerstone for the application of Vision 2030, especially with the huge expenditure on armaments. According to the prominent economist, Abdullah Al-Barrak, Saudi Arabia has spent $70 billion on armaments over the past five years.
Thirdly, the possession of military industrial raw materials, including petrochemicals and metallic substances, such as iron, aluminum and rubber. Saudi Arabia Basic Industries Corporation (SABIC), founded in 1976, is one of the world’s leading companies in the specialty chemicals industry, innovative plastics, fertilizers, polymers and metals. It is the largest non-oil company in the Middle East, and one of the 10 largest international petrochemical companies. Hence, the military industry would undoubtedly benefit from SABIC. Appointing one of the founders of SABIC and its former CEO, Mohammad Al-Mady, as Chairman of the General Organization for Military Industries only highlights this link and reflects the importance of the present phase for the future of the Saudi military industry.
Thus, the nationalization of 50 percent of the military industry over the coming 15 years is certainly a challenge, but not an impossible one, and for the above reasons would robustly shore up this ambitious vision.
Dr. Ibrahim Al-Othaimin is a Middle East affairs specialist and security analyst based in Riyadh. He can be contacted at Ibrahim.othaimin@gmail.com. Follow him on Twitter @Alothaimin
