Half Of Saudi Arabia's Military Purchases To Be Local
26 April 2016
The world's third largest military spender, Saudi Arabia, is to direct 50 percent of its military purchases toward local industries.
According to Saudi Deputy Crown Prince and Minister of Defense Mohammed bin Salman Abdulaziz Al Saud, the kingdom will launch a government-owned military holding company by the first quarter of 2017 to oversee the development of the local military industry.
In 2015, Saudi Arabia’s defense spending grew by 5.7 percent to $87.2 billion, making it the world’s third-largest spender, according to the Stockholm International Peace Research Institute, over taking Russia.
"Does it make sense that we are the world's forth largest military spenders in 2014 and third in 2015 and we do not even have a local military industry?" the 34-year-old prince said during his first televised interview on Al Arabiya television Monday, revealing the Saudi economic vision for 2030.
"We spend more on military than the [British], more than France, and we do not even have a local military industry," he said.
Prince Mohammed said that only two percent of the kingdom's military purchases go to local industry.
"We have a strong demand inside the kingdom for the development of a localized military industry. If we raise the local industry purchases to between 30 and 50 percent we will be able to develop a new, massive industry, which will boost the economy largely and create many jobs," he said.
The movement toward the localization, he said, will be through the restructuring of the military deals to mandate that part of the deal be tied to the local industry.
"Part of the policies rolled out now states that the Ministry of Defense and all security organizations are not allowed to sign any contracts with out a tie-up to local industry," he said.
A military industries holding company is currently being developed and is in its final stages, the prince said, which is to be launched by the end of 2016 or beginning of 2017.
"We are setting this company up in a completely transparent fashion where the citizen will have access to all the figures, deals and sales made by the company. We have down a great deal in its set up and now the final touches are being finalized," he said.
The prince also said that as part of the vision for 2030, the militaries standards rate will be raised to its highest levels.
"We cannot be the third largest military buyer in the world while our military is rated in the twenties when it comes to effectiveness; there is something wrong," the prince said.
"When I enter a military base in Saudi [Arabia], I see marble floors, designs and decorations in the walls with a five-star finish, while when I enter a base in the United States I see low ceilings, just cement without carpet on the floor, but their is hard work, so there is a high level of useless spending that will now be directed to raise the effectiveness of the Saudi security and military services while reducing the overall military spending," he said.
Source : defensenews.com