Page 27 - ADT MARCH 2021 Online Magazine

He also said the kingdom plans to increase military research and
development (R&D) spending from 0.2 per cent to around 4 per
cent of armaments expenditure by 2030.

The Saudi Arabian defence market was valued at USD 13.58 billion
in 2020, and it is anticipated to register a CAGR of 4.34 per cent,
to reach a market value of USD17.39 billion by 2026.
With one of the highest military spends worldwide, Saudi Arabia is
in the midst of restructuring its defence sector and expanding its
military industry to greater higher added value can be generated
for the national economy. The sector has witnessed significant [ COUNTRY FOCUS SAUDI ARABIA ]
change over recent years, with major reforms under way across
all sub-sectors of the industry.
GAMI has also been tasked with developing a
regulatory framework to support the localisa-
Recent trends have included the introduction of new government tion of investment, procurement and R&D, in
entities to lead the drive for localisation, a new defence contracting addition to increasing transparency.
mechanism and a growing focus on areas such as cybersecurity,
and the kingdom’s space programme and satellite industry. The “International investors are realising the enor-
shock of the 2019 attack on the country’s Abqaiq and Khurais oil mous opportunities that the Kingdom’s military
facilities brought a renewed focus to the defence sector, placing sector offers, and opportunities will abound for
it at forefront the country’s priorities.
foreign companies willing to become involved
through joint ventures aimed at technology
Meanwhile, the new impetus towards localising military expenditure transfer, job creation and training opportuni-
represents a core ambition of the country’s Vision 2030 develop- ties,” a GAMI official informed.
ment strategy and stands to bring enormous economic benefits
in terms of employment and technology transfer. The recent launch of the HS132 fast inter-
According to the SIPRI Arms Transfer Database, Saudi Arabia was ceptor boat is a good example of how these
the world’s largest arms importer in 2015-19, accounting for 12 policies are bearing fruit; the HS132 was locally
per cent of global arms imports. This represented a 130 per cent manufactured under a Transfer of Technology
increase on the previous five years. During that period the US and agreement in conjunction with French shipyard
the UK were the kingdom’s leading sources of imports, accounting CMN for the Royal Saudi Naval Forces.
for 73 per cent and 13 per cent of total arms imports, respectively.
This was followed by France, which was responsible for 4.3 per cent On the other hand, Saudi Arabian Military
of imports and Spain for 1.7 per cent. Canada and Germany each Industries (SAMI), a national holding company
supplied 1.6 per cent, while Italy, Switzerland and China supplied for domestic military manufacturing, is a 100
1.3 per cent, 1.1 per cent and 0.9 per cent. These dynamics reflect per cent owned by the Public Investment Fund
some notable shifts compared to the preceding 2010-14 period. (PIF). SAMI is targeting the development of new
Chief among them, the share of imports from the US increased and existing local industries with the aim of
dramatically, rising from 41 per cent, while those from the UK fell developing new technologies, manufacturing
steadily from 33 per cent. products and providing services to scale up
the military industrial sector.
Saudi Arabia remains the most important client for the US, rep-
resenting 24.5 per cent of US arms exports in 2015-19. The UK Political tensions in the Middle East over the
stood as the world’s sixth-largest arms exporter in the same period, past decade have resulted in the country
accounting for 3.7 per cent of worldwide arms exports. investing more in the defence acquisition. With
As part of its Vision 2030 strategy, the kingdom is seeking to sig- several nations indulging in armed conflicts in
nificantly expand its domestic industrial base for defence hardware the region, there is a growing push among the
and localise over 50 per cent of its military equipment spending by countries to obtain military assets, compara-
2030. This marks an ambitious expansion on its 2019 level, when ble in roles and capabilities to the adversaries.
it stood at between 2 per cent and 5 per cent. Moreover, the indulgence of global superpow-
ers with advanced military capabilities, like the
GAMI, established by the government in 2017 is a financially United States and Russia into the scenario, has
and administratively independent entity chaired by Crown Prince further boosted these requirements.
Mohammed bin Salman. GAMI’s core responsibilities include
ensuring localisation goals are met, promoting military spending Saudi Arabian government has plans to pro-
efficiency, and developing the industry through centralised research cure new fighter jets, surface combatants, and
and development (R&D). The body has identified 11 initial prior- armoured vehicles. In recent years, it has also
ity sectors for localisation, including defence electronics, guided increased its focus on C4ISR and cybersecurity
munitions, missiles and launchers, and unmanned aerial vehicles. solutions.

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