Last Saturday, Governor of the Saudi General Authority for Military Industries Ahmed bin Abdulaziz al-Ohali, announced the Kingdom’s ambitious plan to invest more than $20 billion in its domestic military industry over the next decade to boost local military spending and decrease reliance on import.
This statement should be interpreted within the broader context of the Saudi Vision 2030 announced in 2016 by Crown Prince Mohammed bin Salman, and aimed at transforming the country’s economy by reducing its dependence on oil, and replenishing its income sources with new economic, industrial, touristic, and service streams.
Discussing Saudi investments in the next decade requires a deep understanding of their strategic dimensions and implications, especially in light of the Kingdom's allocation of $10 billion for military industries, and another $10 billion for military research and development.
The Kingdom’s awareness about the importance of scientific research in the advancement of society on all fronts is what drives the increase of its spending on military research and development from 0.2 to 4 percent over the next 10 years.
The question that might come to mind now is, what goal is the Kingdom pursuing in this context?
The Kingdom has never been an advocate for war and has rather always been a supporter of regional and international peace. However, as the adages go, if you want peace, prepare for war, and a strong believer is better than a weak believer. This is why nations invariably seek to protect their citizens, residents, and national soil with armed forces that can deter compromises to their security and safety. Major world countries are a case in point.
The Kingdom’s military investment offers two main points for analysis; The first is national sovereignty and pressure-free decision-making, and the second is the novel economic outcomes of such investment. So what about them?
For one thing, nationalizing the military industry is a good step in and of itself because it empowers the Kingdom to freely take relevant decisions internally without any pressures typically related to arms exports. This is particularly important as it is customary of some major powers to perceive their ability to permit or prohibit the export of arms as their own supreme right, as well as a tool of control or punishment to arbitrarily dictate or coerce certain political and economic actions at will.
The decision to nationalize Saudi military industries, especially defense-related ones, signals the Kingdom’s active pursuit to keep a tight rein on decisive matters independently of external parties, without undermining the Saudi diplomacy’s approach of maintaining balanced ties between Riyadh and the rest of the world.
On the other hand, the nationalization of this real non-rentier part of the economy is anticipated to have immense, positive outcomes on the entire Saudi economy in the next decade. Preliminary data indicate that the military industries sector will contribute $4.5 billion to the GDP in 2030, which means that it will not only enrich the national economy, but it will also create about 100,000 direct and indirect jobs.
This vision of nationalization could not have existed without the paths laid out by the Saudi Vision 2030’s economic and political reforms, which have positively shaped the country’s image as a land of promising investment opportunities in the eyes of international investors.
It is now clear why, last December, the General Authority for Military Industries licensed about 70 national and international companies to engage in activities such as manufacturing weapons, providing military services, and supplying relevant products.
Will the nationalization of the Saudi military industry have a prosperous impact on the entire region as well? The answer is yes, indeed it will. The Kingdom has been strengthening its position as an effective political, ethical, and military actor within the Gulf Cooperation Council states, and it is without a doubt that Saudi successes in this context will reflect positively on the rest of the Middle East, and open doors for positive and forward-looking cooperation. This important headway may move the dream of a solid and ideal Arab partnership closer to reality.
Military nationalization empowers countries to freely seek new defense mechanisms, especially in light of the growing use of non-traditional war weapons such as drones and cyberwarss.
Day after day, the Kingdom proves its determination to make giant, progressive leaps towards sustainable development, with the nationalization of the military industry at the heart of it all.
This article was originally published in, and translated from, the pan-Arab daily Asharq al-Awsat.