The British Financial Times newspaper said that the Kingdom of Saudi Arabia is seeking to strengthen its defense and military capabilities locally, and to increase investment in the local manufacture of weapons.
The newspaper added in a report by writers Samer Al-Atrush and Andrew England, that Saudi officials are keen to promote the defense electronics factory, as one of the sovereign wealth fund’s latest investments in the field of military manufacturing, which comes on top of Crown Prince Mohammed bin Salman’s plans to modernize the kingdom’s economy.
The Advanced Electronics Company, whose factory in Riyadh produces parts for bombs and drones, is the “crown jewel” of Saudi Arabia’s fledgling military industry, Saudi officials say.
The Saudi Company for Military Industries (Sami), which was founded four years ago by the Public Investment Fund to localize defense production, bought the Advanced Electronics Company last year.
Saudi Arabia has one of the world’s largest defense budgets, and spent $57 billion on protecting the country last year, according to the Stockholm International Peace Research Institute.
AEC is at the center of the kingdom’s plan to increase domestic production to account for 50 percent of its defense spending within 10 years. The local production accounted for only 3 percent of the budget in 2017, when Sami was founded.
The military industrialization project is in line with Prince Mohammed bin Salman’s vision plan to diversify the oil-dependent economy, an ambitious project, but analysts said it would be a mistake to reject it.
Frances Tosa, a defense consultant and editor of Defense Analysis, believes that Saudi Arabia is spending a large amount on weapons. “This budget can provide you with an industry if you want to,” he said.
The plan also reflects the Kingdom’s desire for self-reliance, especially as it is engaged in a war in neighboring Yemen, and its oil facilities and infrastructure are under attack by drones and missiles launched by Iranian-backed rebels, according to the newspaper.
And arms purchases from the United States, which is the main supplier of arms to the kingdom, often face opposition in Washington. The US Congress is discussing two proposals to block air-to-air missiles to Saudi Arabia, worth $650 million.
Walid Abu Khaled, CEO of Sami, said in an interview with the Financial Times, that one of the reasons for establishing the company is to achieve sovereignty, and we want this self-sufficiency. The other reason is “the time it sometimes takes to repair and maintain the product, waiting for replacement parts can take up to two years”.
The Saudi company is already looking to assemble Black Hawk helicopters, which are produced by the American Lockheed Martin, with local labor. As well as armored vehicles in partnership with an Emirati company.
The region is witnessing competition in defense industries, as the UAE manufactures drones and armored fighting vehicles for use in conflict areas, and Israel also manufactures some of the most advanced weapons in the world. Even Iran, the kingdom’s regional rival, has an increasingly sophisticated domestic arms industry.
Iran is accused of being behind a 2019 drone and missile attack that destroyed two Saudi oil facilities and halted about 5 percent of global oil production.