Rob L. Wagner روب لستر واقنر

May 15, 2016

Can Saudi Arabia Become an Armament Producer?

By Rob L. Wagner

The Arab Weekly

15 May 2016

JEDDAH – The road to a sustainable arms industry in Saudi Arabia is expected to be a long and difficult slog with the likelihood of the kingdom achieving modest incre­mental success but possibly fail­ing to realise a true industrial base within 15 years.

In his road map for a new Saudi Arabia with a diversified economy not dependent on oil revenue, Dep­uty Crown Prince Mohammed bin Salman bin Adulaziz laid out his vi­sion of directing as much as 50% of the kingdom’s military purchases to local industry.

Saudi Arabia is the third largest military spender in the world, yet beyond some small manufacturing plants it has no military industrial base. The country’s defence spend­ing in 2015 grew to $87.2 billion, an increase of 5.7% over the previous year, according to the Stockholm International Peace Research Insti­tute.

“We spend more on military than the [British], more than France, and we do not even have a local mili­tary industry,” Mohammed said in a recent interview with Al Arabiya, noting that only 2% of Saudi mili­tary purchases are directed to local manufacturing.

“We have a strong demand inside the kingdom for the development of a localised military industry. If we raise the local industry pur­chases to between 30% and 50%, we will be able to develop a new massive industry, which will boost the economy largely and create many jobs.”

Saudi Arabia’s ambitious plan has been met with scepticism from Western military analysts and cau­tious optimism from Saudi observ­ers.

Kenneth M. Pollack, senior fel­low for foreign policy at the Brook­ings Institution’s Center for Middle East Policy in Washington said a vi­brant arms industry would be elu­sive for Saudi Arabia.

“Saudi Arabia has no capacity to build an arms industry,” Pollack said. “Could they start out doing pieces of production and it might lead to something more substan­tial? Sure they could but they must start modest before doing some­thing more sophisticated.”

Pollack said Saudis are missing two key elements in building an arms industry: a sophisticated in­dustrial base and an educated la­bour force.

Pollack said a look at Egypt’s military-industrial base could be a window to Saudi Arabia’s future, noting that Egypt requires in its military contracts that sellers pro­vide help in developing an indus­trial base.

“The United States technically has plants in Egypt but all they do is assemble tanks from kits,” Pol­lack said. “It certainly creates jobs for Egyptians and gives workers a certain amount of sophistication but it adds very little to the local economy.”

Japan and South Korea have built true industrial military bases that have taken decades to achieve, he said. “Japan builds tanks that are pretty darn good,” Pollack said.

One Saudi political analyst, who spoke on the condition of anonym­ity, said it does not matter. “If we can accomplish even 10% of what the prince wants, then we have succeeded. We have to start some­where,” the analyst said.

The issue facing Saudi Arabia is whether creating jobs is the only goal. This can be accomplished by Saudis aggressively pursuing their offset obligations, which have been underutilised, by demanding for­eign arms manufacturers provide jobs and training associated with their products. The alternative is to establish an industrial base capable of manufacturing weaponry that provides jobs and also helps protect the kingdom and generate revenue by exporting military hardware to its neighbours in an increasingly unstable region.

“I am not one of those who envi­sion Saudi Arabia as a major military power,” said Ehsan M. Ahrari, an independent defence and foreign affairs consultant and chief execu­tive officer of Strategic Paradigms in Alexandria, Virginia. “The fight­ing spirit… is virtually absent from the military of the Gulf States.”

Although there is little doubt that Saudi Arabia wants to create jobs and, indeed, lacks an educated workforce ready to tackle building a military industry, the Saudi analyst said the need for educated workers to help build a thriving base is over­stated.

“There are nearly 200,000 Sau­dis studying for their graduate and postgraduate degrees abroad,” the analyst said. “When they come home they will need jobs. If we were to build a military industry, we will need high-level and mid-level managers. That’s not a huge number of workers and can be eas­ily filled. The remaining workforce — and that involves thousands of jobs — doesn’t need a university education.”

If the Saudi government envi­sions a sustainable military indus­trial base by 2030, then Iran’s arms industry may be a good reference point. Following the 1979 Islamic revolution, an international arms embargo forced the Iranian gov­ernment to develop its own arms industry. Although Iran’s industry is not particularly sophisticated, it produces its armoured personnel carriers, tanks and missiles and ex­ports weapons to nearly 60 coun­tries.

“Iran has been developing its own arms industry for 30 years and it gives you a sense of what time re­quirements are involved,” Pollack said.

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