GAMI Governor to Asharq Al-Awsat: Localizing Military Industry Will Create over 40,000 Direct jobs
Saudi Arabia kicked off its venture in military industries 71 years ago when King Abdulaziz bin Abdulrahman issued a royal decree to set up military factories. A year later, two deals were signed on September 8 to provide the factories with the necessary equipment and supplies.
In 2016, the Kingdom unveiled its ambitious Vision 2030. Among its goals is the localization of more than 50 percent of military spending by 2030. The first step in achieving this goal was taken with the establishment of the General Authority for Military Industries (GAMI).
Ahmad Al-Ohali was appointed GAMI governor in 2019 after racking up 37 years of experience in the industrial sector, more than 28 of which were spent in leading executive positions in the petrochemicals industry field.
Asharq Al-Awsat sat down for an interview with al-Ohali as GAMI announced on Saturday the signing of its first Industrial Participation Agreement (IPA) with Raytheon Saudi Arabia to localize to localize maintenance of its Patriot missile defense system. This was one of the latest accelerated steps GAMI had taken to achieve Vision 2030.
Speaking about GAMI, al-Ohali said it was set up in 2017 to organize and develop the Kingdom’s military industries sector. He stated that it aspires to become a “beacon for sustainable and innovative military industries that first and foremost support the Kingdom’s security and people.”
The Authority also aims to provide investment opportunities and social and economic benefits, he told Asharq Al-Awsat. “GAMI has the full support of our wise leadership and the follow up of Crown Prince Mohammed bin Salman, Deputy Prime Minister, Minister of Defense and GAMI Chairman.”
GAMI follows three main strategies, continued al-Ohali. It seeks industry, which sets regulations that bolster transparency in the sector and encourage investment in it. It seeks research and technology that are the foundations of developing capabilities that will implement educational and practical programs to build human resources and manage efforts aimed at meeting the demands of military and security forces. Military purchasing aims to improve the purchasing mechanism in a way that prioritizes localization.
Al-Ohali said that Saudi Arabia only locally produces 5 percent of its military needs at a time when the Kingdom is the world’s third greatest purchaser of military equipment and services. Vision 2030 aims to localize 50 percent of Saudi military spending.
“This will be the main drive in our work for the next ten years,” he stressed.
Commenting on the military industries in Saudi Arabia, he said: “We are proud of our number of local manufacturers. The majority of production is focused on light military equipment and armored vehicles and some ammunition.”
“What we possess today is the will to witness transformation in the military industry with unlimited support from the leadership and amid the Kingdom’s unprecedented openness that is becoming day after day a destination for investment in all fields,” he remarked.
Efforts are currently underway to improve, develop and facilitate the military purchasing mechanism, he al-Ohali revealed. “We are seeking to unify the purchasing power, which will grant the Kingdom greater negotiation power that will in turn create greater opportunities to localize and develop national production.”
On the role GAMI plays in purchasing weapons and military gear and making recommendations to Saudi military parties, he explained that when it comes to military gear contracts, the Authority assesses the demands of the local military agencies. Experts at GAMI then study the needs and determine the best choices, while taking into consideration numerous strategic, financial and legal factors.
At the moment, GAMI does not directly purchase weapons or equipment, but it oversees the entire process to ensure that it complies with best practices and that the Kingdom looks to benefit the most from it in terms of spending and localization, said al-Ohali.
GAMI currently boasts some 9,000 employees, “but we have much greater ambitions.” The localization of the industry will create more than 40,000 direct jobs and 60,000 indirect ones by 2030. Saudis will make up the bulk of the new employees.
Addressing the main challenges GAMI is facing, he spoke of the challenge of long-term planning amid constant and rapid technological advancements the global industry is experiencing.
“We are working closely with Saudi military and security parties and international importers to overcome any obstacles in this regard,” he said.
Another challenge is the import of intellectual technology and ownership to develop the local industry. GAMI is working with manufacturers and governments in friendly countries to reach legal and operational solutions that will allow the import of such technologies in a way that secures the original manufacturers’ rights, al-Ohali explained.
The most important challenge, however, is developing Saudi capabilities to take the military industry to “newer horizons.”
“We have a good amount of national talent, especially in GAMI. We are seeking to develop new generations of industrialists, experts and specialists through educational and practical programs that we will develop in cooperation with the ministry of education, local universities and research centers from around the world,” he revealed.