Int’l Companies Eye Development of Saudi Defense Industries

Several international defense companies have voiced their aspirations for participating in Saudi Arabia’s journey to develop its military industry through localizing technologies, productions, and jobs and expanding the vocational training sector in the Kingdom’s defense sector.

These companies are partaking in the four-day defense exhibition, the World Defense Show (WDS), which Saudi Arabia inaugurated on Sunday in Riyadh.

Hundreds of international companies from different countries are participating at the WDS to review the latest systems and technologies.

“The US Pavilion has 75 companies showcasing their products at the WDS - around 20% are present for the first time in the Kingdom,” revealed Tarek Solomon, Chairman of the American Chamber of Commerce in Saudi Arabia.

Founded by Saudi Arabia’s General Authority for Military Industries (GAMI), the WDS is set to be held every two years by showcasing the latest technological developments from around the globe.

The WDS will accelerate the future of the military industry by showcasing the latest technological developments from around the globe, demonstrating defense interoperability across all major domains: air, land, sea, space and security systems, said GAMI Governor Ahmad Al-Ohali.

“Saudi Arabia’s interest in the exhibition embodies the Kingdom’s Vision to be specialized and rise to the ranks of the best defense exhibitions in the world,” he added, noting that the WDS enjoys integrative support from all partners in the public and private sectors.

Hundreds of military delegations from 70 countries are participating at WDS’ first edition.

Al-Ohali added that the directive of Crown Prince Mohammed bin Salman to organize the WDS was to support the realization of the Kingdom’s ambitions and aspirations towards strengthening national military industrialization capabilities, its sustainable prosperity, and contributing to the enrichment of the state.

The governor noted that holding the WDS reflects a strategy for opening the doors of investment and establishing qualitative partnerships.

Opportunities are open to all manufacturers and international service providers to participate in achieving the vision of Saudi Arabia.

At the WDS, international companies displayed a range of their various defense products and showcased their strategy for participating in developing Saudi Arabia’s defense military industries through various equipment, systems, and technologies.

At the same time, the training sector is of broad interest to international companies.

The four-day show, which includes 15 national pavilions with a total exhibition area of 800,000 square meters, attracted military delegations from 80 countries and regions. It is expected to attract around 30,000 visitors before ending on March 9.

The WDS is one of the Kingdom’s strategic tools for supporting Saudi efforts to localize over 50% of its spending on equipment and military services by 2030.

President of Boeing Saudi Arabia Ahmed Jazzar said that the WDS has succeeded in presenting a vast capacity in the Saudi defense industries sector, adding that Boeing was participating with all its weight at the exhibition.

He pointed out that the extensive economic reforms witnessed by the Kingdom had brought about a significant shift in its business environment.

Speaking to Asharq Al-Awsat, Jazzar reaffirmed that Boeing has a historical connection with the Kingdom and is considered one of the main founders of the first companies in Saudi Arabia’s defense sector.

Boeing’s pursuit of localizing industries, training cadres, and supporting scientific research in Saudi Arabia aligns with the Kingdom’s Vision 2030, noted Jazzar.

Boeing continues to work with the Kingdom and regional governments to ensure progress is made in its capabilities in the defense sector and future services sector.

The Chicago-based aerospace and defense contractor said that the WDS is a key international platform for Boeing to highlight its products and services that support and advance Saudi Arabia and the wider region’s defense and services requirements.

Boeing Defense Space & Security (BDS) backlog now stands at $60 billion with 33% of that coming from outside the United States. The 2021 Boeing Market Outlook also projects the defense and space market opportunity will remain consistent with last year’s forecast at $2.6 trillion during the next decade.

This spending projection continues to reflect the ongoing importance of military aircraft, autonomous systems, satellites, spacecraft, and other products for national and international defense, with 40% of expenditures expected to originate outside of the US.

For its part, Airbus announced its participation in the WDS through a wide range of advanced products, technologies, and innovations capable of shaping the future of the global aviation sector.

The aerospace company said that the event is an ideal opportunity for it to confirm its commitment to the localization program and to showcase its strong presence in Saudi Arabia, which is based on strategic partnerships that contribute to the development of local sectors by providing expertise, services and products aimed at achieving the goals of customers and partners in the Kingdom.

Airbus had recently signed a number of agreements in Saudi Arabia.

These deals varied between joint projects and memoranda of understanding to exchange knowledge, including a joint project with the Saudi Arabian Military Industries (SAMI) to provide military aviation services and maintenance, repair, and renewal capabilities.

Airbus also signed a memorandum of understanding with the Prince Sultan Aviation Academy to provide opportunities in aviation training.

“We look forward to the WDS as a historic opportunity for one-to-one meetings to strengthen British-Saudi relations... At the UK pavilion, we are bringing together military industries sectors from all government ministries to highlight British expertise,” said the director of the British Defense and Security Organization at the Ministry of International Trade Mark Goldsack.

European Central Bank President Christine Lagarde renewed her call for economic integration across Europe on Friday, arguing that intensifying global trade tensions and a growing technology gap with the United States create fresh urgency for action.
US President-elect Donald Trump has promised to impose tariffs on most if not all imports and said Europe would pay a heavy price for having run a large trade surplus with the US for decades.
"The geopolitical environment has also become less favorable, with growing threats to free trade from all corners of the world," Lagarde said in a speech, without directly referring to Trump.
"The urgency to integrate our capital markets has risen."
While Europe has made some progress, EU members tend to water down most proposals to protect vested national interests to the detriment of the bloc as a whole, Reuters quoted Lagarde as saying.
But this is taking hundreds of billions if not trillions of euros out of the economy as households are holding 11.5 trillion euros in cash and deposits, and much of this is not making its way to the firms that need the funding.
"If EU households were to align their deposit-to-financial assets ratio with that of US households, a stock of up to 8 trillion euros could be redirected into long-term, market-based investments – or a flow of around 350 billion euros annually," Lagarde said.
When the cash actually enters the capital market, it often stays within national borders or leaves for the US in hope of better returns, Lagarde added.
Europe therefore needs to reduce the cost of investing in capital markets and must make the regulatory regime easier for cash to flow to places where it is needed the most.
A solution might be to create an EU-wide regulatory regime on top of the 27 national rules and certain issuers could then opt into this framework.
"To bypass the cumbersome process of regulatory harmonization, we could envisage a 28th regime for issuers of securities," Lagarde said. "They would benefit from a unified corporate and securities law, facilitating cross-border placement, holding and settlement."
Still, that would not solve the problem that few innovative companies set up shop in Europe, partly due to the lack of funding. So Europe must make it easier for investment to flow into venture capital and for banks to fund startups, she said.

Int’l Companies Eye Development of Saudi Defense Industries