The Riyadh World Defense Exhibition and the Strategy of Localizing Defense Industries

The Riyadh World Defense Exhibition and the Strategy of Localizing Defense Industries

Contracts worth $6.9 billion and receiving 106,000 visitors, with the participation of 773 exhibiting entities from 76 countries and the attendance of 441 official delegations from 116 countries, concluded the second World Defense Exhibition held in Riyadh from February 4-8, 2024. Its importance lies in three aspects: Firstly, countries typically announce major developments in the defense sector during exhibitions. Saudi official sources indicated an increase in the localization rate of defense industries from 4% to 13.6% by the end of 2022, along with expectations of the defense sector’s contribution to the kingdom’s GDP increasing to around $25 billion by 2030, with direct job opportunities reaching 40,000 and indirect ones around 60,000. Secondly, the escalating regional conflicts fuel discussions on the weapons used in those conflicts. Currently, drones dominate the scene by threatening maritime navigation or targeting American bases in the region, making the utilization of modern technology in defense a strategic necessity. Thirdly, these exhibitions provide a good opportunity for stakeholders and relevant companies to meet and identify security needs, thereby closely linking weapon production and development to the nature of the threats, in addition to contract signings. On the second day of the exhibition, Saudi Arabia announced the signing of 11 partnership agreements with global private sector entities in the military manufacturing field.

Saudi Arabia included in its Vision 2030 the localization of over 50% of total military expenditures by 2030. It’s worth noting that when this plan was announced in 2017, the localization rate did not exceed 4%. However, the kingdom adopted a comprehensive plan, outlined during its participation in the 19th Manama Dialogue, launching approximately 300 initiatives under five strategic goals: achieving operational excellence, organizational performance development, individual performance development, improving spending efficiency, and supporting local manufacturing, along with effective governance to expedite decision-making and develop the ministry and its various sectors, now specialized, in addition to establishing institutions concerned with military localization, including the General Authority for Military Industries and the Saudi Arabian Military Industries Company.

Given the significance of the foregoing, two questions arise in this context: First, what is the impact of rapid technological advancement on the defense plans and strategies of the Gulf Arab countries, including Saudi Arabia? Second, what are the requirements for achieving the content of those strategies amidst current developments?

Undoubtedly, technological advancement represents an opportunity and a challenge at the same time in various fields, including the defense sector. There are four areas in this context, namely information and communication technology, artificial intelligence and autonomous or semi-autonomous systems, supersonic weapons, and biotechnology with military applications. All of these undoubtedly offer opportunities to enhance defensive capabilities for countries, even on the battlefield itself, through deploying fewer soldiers at lower costs, increasing maneuverability, facilitating rapid and secure communication between armies. Countries and organizations have assigned great importance to these areas, as evidenced by the Secretary-General of NATO, Jens Stoltenberg, announcing the first strategy for employing artificial intelligence in defense in 2021, including the establishment of the NATO Innovation Fund for working and investing in new technologies and what he called “disruptive innovation” worth one billion dollars. Despite the importance of this, it is essential to consider not ignoring the traditional elements of warfare. In his address at the 19th Manama Dialogue in 2023, the Chairman of the Military Committee at NATO stated, ‘The focus of world countries on employing technology in military fields does not mean neglecting the importance of the human element, geography, and traditional wars.’ This means the necessity of achieving a balance between technological factors and traditional elements in defense.

Every strategy undoubtedly has its challenges, foremost among them being the dominance of major Western companies in the global defense market and the opportunities and costs of manufacturing options, in addition to the reluctance of some Western companies to export the most advanced technology to partner countries. While the American defense strategy issued in 2022 included commitments regarding the development of defense capabilities for Gulf countries, the export of technology is generally linked to the policies of the ruling administration, as well as considerations of regional power balance.

In my estimation, discussion about the human element remains the essence of the strategy for localizing the military industries in the Gulf region as a whole. It is noticeable that external scholarship programs in the Kingdom are closely linked to the goals outlined in Vision 2030 and specifically the defense sector, meaning the development of human resources necessary to deal with that rapid revolution in military technology, especially in rare specialties such as engineering and mathematics. The specifications of weapons and storage methods remain other requirements to enhance their competitiveness in global markets, giving localization of arms manufacturing tremendous momentum, in addition to allocating budgets, involving the private sector, and working to provide the requirements of that manufacturing, as well as diversifying international partnerships for the implementation of that strategy.

It is worth noting that during that exhibition, two contracts were signed with Lockheed Martin Company, under which the Kingdom will participate in manufacturing the American THAAD missile system, in addition to the importance of enhancing Gulf and Arab integration to benefit from relative advantages.

In conclusion, with the changing concept of security and the nature of security threats that have radically altered the plans and strategies of countries for national security in general and arms race in particular, such as the involvement of non-state actors in many conflicts and their pursuit of advanced technology and its malicious use targeting unprecedented state security, the goal is no longer merely localizing military industries but how to employ the technological revolution within those plans based on the goals of the formulated strategies and taking into account the developments of technology and how to utilize it optimally.

Finally, and not least, if the goal of localizing military industries means enhancing the option of self-security for countries, then in the case of Gulf countries, it achieves another strategic goal, namely, achieving the concept of power balance, which includes the ability to deter and thus achieve the essence of regional security balance itself.

Note: This article has been automatically translated.

Source: Akhbar Alkhaleej

Dr. Ashraf Keshk, Senior Research Fellow

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