Riyadh revealed that it is considering $32.5 billion worth of private sector investment in military industries towards the creation of its own military industry

Saudi Arabia will spend $32 billion to achieve military independence

photo_camera PHOTO/ Bandar Algaloud/Courtesy of Saudi Royal Court/Handout via REUTERS - Saudi Crown Prince Mohammed bin Salman

The US-Saudi relationship is going through one of its worst moments because of Riyadh's rapprochement with Russia, which breaks the principle of oil for Washington's protection and raises questions about arms sales agreements and the US military presence in the kingdom.

The trigger was the latest OPEC+ meeting, which under the Arab country's leadership decided to cut oil production in line with Russia's wishes, contradicting the request made by US President Joe Biden himself during his visit to the kingdom in July in the midst of the global energy crisis caused by the war in Ukraine.

The governor of the General Authority for Military Industries, Ahmed Al-Ohali, said in a statement dubbed 'Localising Industry in the Kingdom', that Saudi Arabia is moving ahead with a plan to localise 50% of military spending by 2030. Local media quoted Al-Ohali as saying that the number of facilities operating in the military industries and services sector has increased from five facilities when the authority was established to 187 facilities today, adding: "Today we are talking about 315 founding permits and licences until the end of September".

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Saudi Crown Prince and Prime Minister Prince Mohammed bin Salman considers the localisation of defence industries as one of his priorities during the current phase. Prince bin Salman believes that there can be no talk of full independence without a commitment to building a strong local industry.

The Governor of the General Authority for Military Industries (GAMI) emphasised that "military industries are an extension of and complement other industries in the Kingdom, and the national strategy for industry will contribute significantly to the success and localisation of military industries". GAMI identified 30 major investment opportunities to be offered to the private sector over the next eight years, covering 80% of Saudi Arabia's needs at a cost of more than SAR 120 billion, according to GAMI Governor Ahmed Al-Ohali. Al-Ohali.

Prince Bin Salaman recently launched the National Industry Strategy, which identified more than 800 investment opportunities worth one trillion Saudi Rials.

The strategy aims to increase the industrial sector's contribution to GDP to 895 billion rials and reach the value of industrial exports to 557 billion rials, achieving a 350% growth in industrial investment opportunities and doubling the number of factories in the Kingdom by more than 3 times to 36,000 factories.

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Al-Ohali had revealed, in earlier statements, that "the percentage of localisation of military industries, including military equipment and services, increased from 2% when the authority was established in August 2017 to 11.7% at the end of last year."

The authority is in the process of completing a simplified study of such investment opportunities to make them available to the private sector, Al-Ohali said, during seminars accompanying the launch of the National Industrial Strategy on 23 October. He also stressed that Saudi Arabia will achieve 50% localisation of military spending by 2030.

Military industries are an extension and integration of other industries in the kingdom. The National Industrial Strategy will contribute significantly to the success and localisation of military industries, as well as support the military industries strategy launched about two and a half years ago, and create an attractive investment environment for those operating in military industries, according to the senior official.

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