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.

The International Monetary Fund said on Thursday that an escalation of the conflict in the Middle East could have significant economic ramifications for the region and the global economy, but commodity prices remain below the highs of the past year.

IMF spokesperson Julie Kozack told a regular news briefing that the Fund is closely monitoring the situation in southern Lebanon with "grave concern" and offered condolences for the loss of life.

"The potential for further escalation of the conflict heightens risks and uncertainty and could have significant economic ramifications for the region and beyond," Kozack said.

According to Reuters, she said it was too early to predict specific impacts on the global economy, but noted that economies in the region have already suffered greatly, especially in Gaza, where the civilian population "faces dire socioeconomic conditions, a humanitarian crisis and insufficient aid deliveries.

The IMF estimates that Gaza's GDP declined 86% in the first half of 2024, Kozack said, while the West Bank's first-half GDP likely declined 25%, with prospects of a further deterioration.

Israel's GDP contracted by about 20% in the fourth quarter of 2023 after the conflict began, and the country has seen only a partial recovery in the first half of 2024, she added.
The IMF will update its economic projections for all countries and the global economy later in October when the global lender and World Bank hold their fall meetings in Washington.
"In Lebanon, the recent intensification of the conflict is exacerbating the country's already fragile macroeconomic and social situation," Kozack said, referring to Israel's airstrikes on Hezbollah in Lebanon.
"The conflict has inflicted a heavy human toll on the country, and it has damaged physical infrastructure."
The main channels for the conflict to impact the global economy have been through higher commodity prices, including oil and grains, as well as increased shipping costs, as vessels avoid potential missile attacks by Yemen's Houthis on vessels in the Red Sea, Kozack said. But commodity prices are currently lower than their peaks in the past year.
"I just emphasize once again that we're closely monitoring the situation, and this is a situation of great concern and very high uncertainty," she added.
Lebanon in 2022 reached a staff-level agreement with the IMF on a potential loan program, but there has been insufficient progress on required reforms, Kozack said.
"We are prepared to engage with Lebanon on a possible financing program when the situation is appropriate to do so, but it would necessitate that the actions can be taken and decisive policy measures can be taken," Kozack added. "We are currently supporting Lebanon through capacity development assistance and other areas where possible."

Int’l Companies Eye Development of Saudi Defense Industries