Saudi begins licensing to develop its own arms industry

Saudi Arabia has long held a strong desire to develop an arms industry of its own. For years it has been the world’s largest importer of weapons, with purchases mainly from the USA rising sharply following its military interventions in the region. This trend may begin to change with yesterday’s announcement by Riyadh that it has begun the process of granting licenses to companies to develop weapons within the kingdom.

Saudi news agencies reported that Riyadh has begun accepting license applications for firms in the military industrial sector, a major target under plans to diversify the kingdom’s economy away from oil exports. The General Authority for Military Industries (GAMI), will license companies to manufacture firearms, ammunition, military explosives, military equipment, individual military equipment and military electronics, state news agency SPA reported.

GAMI Governor Ahmed Bin Abdulaziz Al-Ohali  is reported by the Saudi Gazette saying that yesterday’s “move would open the door for foreign and local investment in the sector to facilitate their contribution to building the sector directly, achieving the goal of localizing 50 percent of the Kingdom’s spending, and meeting the military industries sector needs. It will also be a major step towards organizing the sector”.

READ: Germany won’t sell arms to Saudi after Khashoggi murder, official says

The issuance of licensing is a major step in Crown Prince Muhammad Bin Salman’s plan to diversify the kingdom’s economy. Last year he said he wanted Riyadh to produce or assemble half its defence equipment locally in order to create 40,000 jobs for Saudis by 2030. During the announcement of the launch of a state-owned military industrial company the crown prince said: “The company will seek to be a key catalyst … to localize 50 percent of total government military spending in the Kingdom by the year 2030,” up from just two per cent now.

While Saudi Arabia trails the USA and other major powers in total military expenditure, the kingdom sits at the top of the list of the highest military spending as a percentage of GDP, most of it coming from America. In 2018 Riyadh announced that it would buy $110 billion of US arms in the coming years, and US President Donald Trump suggested that these exports would support up to 500,000 American jobs.

Following the murder of journalist Jamal Khashoggi, the lucrative arms deal became the subject of controversy in the USA as well as Europe. Trump came under immense pressure to stop supplying the Saudis with American made fighter jets used in bombing raids in Yemen where Riyadh has been accused of committing war crimes.