Saudi Arabia: Launches Military Industries Company, Contributing More Than $3.7 Billion USD

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On Wednesday 17th May 2017, Public Investment Fund of Saudi Arabia declared the launch of a state-owned military industrial company, contributing more than 14 billion riyals to the Kingdom’s gross domestic product by 2030. The kingdom’s top sovereign wealth fund said in the statement that The New Saudi Arabian Military Industries will seek to provide over 40,000 jobs by 2030. The move could alter years of preparation in which Saudi Arabia – one of the world’s largest buyers of foreign arms – and other Gulf Arab states recycled a major part of their oil wealth back into Western economies via arms purchases and investments. A year before, Prince Mohammed bin Salman, the powerful deputy crown prince, and defense minister launched his Vision 2030 reform scheme to boost jobs as well as revenue to make a future with lower oil income.

Bin Salman 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”. Further, he added,” It will lead the military industries sector to increase local content, increase exports and bring foreign investment to the kingdom by entering into joint ventures with major international military industry companies”. According to the statement, Saudi’s military industrial company will work in repair and maintenance of planes and in the manufacture of unmanned aircraft. Also, the company will do work on military vehicles, ammunition, radar, communications systems and electronic warfare. Saudi Arabia has been outstanding a military coalition fighting for over two years in a war in neighboring Yemen. This weekend, The United States President, Donald Trump is set to make his visit starting in Saudi Arabia, focused on defense and security ties. The United States is close to carrying out a series of arms deals with the kingdom more than $100 billion.