This month, Saudi Arabia’s General Authority for Military Industries (GAMI) unveiled a Military Industries Human Capital Strategy, a plan that aims to build the country’s human capital for defense sector research and development and move the kingdom towards more defense self-reliance.
The strategy has six main objectives, namely to enable Saudi Arabia’s defense sector through supporting policies and regulations; enhance the level of professionalism, skills, and excellence within the sector’s human capital development; empower defense research and innovation; assure the availability of requisite and sustainable human capital; develop digital capabilities; and encourage participation among stakeholders in planning, training, and funding.
The strategy aims to develop educational, training, policy, mentorship and counseling programs harmonized by partnerships between the public and private sectors and enablement of the research sector.
In that direction, Saudi Arabia has signed several Memoranda of Understanding between GAMI, the Ministry of Investment and UK-based Cranfield University. GAMI also signed a Memorandum of Understanding with Italian defense manufacturer Leonardo to create and develop investment opportunities in education and train specialized military industries.
The strategy provides guidelines for enhancing technology transfer, expansion and establishment of local defense industries and increasing the transfer of production. It also includes priority initiatives, such as broadening technical programs, offering defense-related academic scholarships, expanding university-level defense-related disciplines, introducing long and short training programs, and empowering women in the defense sector.
It is all in line with Saudi Arabia’s Vision 2030, a plan that aims to maintain Saudi Arabia’s preeminent role in the Middle East and Islamic world, establish the country as a global investment powerhouse and leverage its strategic location connecting Asia, Africa, and Europe as a center of trade and travel hub.
Saudi Arabia is one of the world’s largest defense spenders with the 6th largest defense budget in 2020, accounting for 2.9% of global military spending and 8.4% of Saudi’s gross domestic product (GDP).
In 2022, the Saudi government announced a 10% decrease in its defense budget, bringing it down to 171 billion riyals (US$46 billion) from 190 billion riyals the previous year. Analysts cite Saudi Arabia’s efforts to localize defense production and the near completion of several defense deals as the reason for the budget cut.
However, diminishing oil revenues and uncertain US security policies in the Middle East may be influencing Saudi Arabia’s drive to establish its own defense industry.
Saudi Arabia is an energy superpower, holding 15% of the world’s proven oil reserves and maintaining the world’s largest crude oil production capacity. In 2020, oil exports formed 70% of all Saudi exports and 53% of the Saudi government’s revenues.
Saudi Arabia’s oil revenues have recently fallen off because of decreased global demand due to the Covid-19 pandemic, falling global oil prices and voluntary production cuts under OPEC+ to rebalance the global oil market.
From a strategic perspective, the US’ disastrous withdrawal from Afghanistan, foreign policy mistakes in Iraq and Syria, fickle-minded approach to Iran’s nuclear program and shift of strategic attention from the Middle East to the Pacific are apparently driving Saudi Arabia to reduce its dependence on the US as its traditional security guarantor and weapons supplier.
Furthermore, Saudi arms purchases from the US have been criticized as politically motivated, overpriced and geared towards buying the most advanced systems regardless of underlying strategic needs.
Saudi Arabia already has the foundations of an indigenous defense industry with state firms such as Military Industries Corporation (MIC), Advanced Electronic Company (AEC), Alsalam Aircraft Company and Saudi Arabian Military Industries (SAMI) company.
While total defense industry self-sufficiency is not feasible, Saudi Arabia has made significant advances in its domestic defense industry, as it can now design, manufacture and modernize military vehicles, communication and electronic systems, and unmanned systems including drones.
The country has also substantially upgraded its aerospace repair and maintenance capabilities and has improved its military training to operate sophisticated weapons systems.
The major challenge now for Saudi Arabia’s defense industry is whether it can persuade foreign partners to help it build up local capacities, develop and align support infrastructure, and train a pool of highly skilled human capital.