In our efforts to keep members informed on the progression of the Saudi Vision 2030, we will be providing summaries of the sections of the “Delivery Plan for the National Industrial Development and Logistics Program (NIDLP)”. The program aims to transform Saudi Arabia into a leading industrial powerhouse and a global logistics hub in promising growth sectors (with focus on Industry 4.0), which would generate ample job opportunities, enhance the trade balance and maximize local content.
The program focuses on four key sectors: Industry, Mining, Energy and Logistics, and enablers including the development of Policies and Regulations, Financial Enablement, Infrastructure, Industrial Lands, Special Economic Zones, Research, Development and Innovation.
Section 2-3: Military Industries
Overview
As the Kingdom is the world’s third largest spending country on defense and security, the military industrial sector represents a major opportunity for local economic development. Recognizing this, the Vision 2030 aims to boost the development of the military industrial sector and localize 50% of military and security expenditures covering military systems, equipment, maintenance and repair. Along with providing jobs and opportunities for the Saudi youth, the sectoral development aims to achieve five major national priorities:
- Increase military readiness
- Enhance strategic autonomy
- Enhance interoperability across multiple entities
- Develop a sustainable local military industries sector
- Increase transparency and efficiency of spending.
The supply chain requirements of the military industries sector are interlinked with those of other industries and use common raw materials such as metals. The NIDLP aims to provide the main materials and inputs needed by the military industries ecosystem.
In the lead up to 2020, the NIDLP delivery plan outlines five national sectoral objectives:
- Launch a military industries and technology strategy
- Open the military industries sector to local and foreign investors
- Ease the military industries licensing process for manufacturers
- Build strategic partnerships with international OEMs
- Restructure the military side of the economic offset program.
Challenges
The report identifies a number of obstacles facing the military industrial sector in the Kingdom:
- Identification of priorities and commitment to long term procurement contracts
- Current capabilities and enables
- Coordination between sector’s ecosystem and supporting functions
Sectoral Strategy
Global best practices, military industries models, and global trends were taken into account to develop the sectoral strategy around 4 main pillars, regulation and legislation; industry, research and technology and military procurement.
Current Efforts
Several major efforts have been made toward developing the Kingdom’s military industries sector in recent years including:
- Establishment of partnerships with leading global companies to transfer and localize the technology
- Development of a new National Defense Strategy that will be used as a point of reference for the military industries sector
- Establishment of an Authority for the Military Industries Sector (the General Authority for the Military Industries Sector-GAMI)
- Establishment of a Leading National Company (the Saudi Arabian Military Industries –SAMI)
GAMI’s comprehensive mandate covers management and development of the military side of the economic offset program and establishment of strategic partnerships with both public and private sectors locally and internationally.
SAMI aims to act as a major contributor toward building the Kingdom’s capabilities and the localization of technologies.
For a copy of the NIDLP deliver plan, please visit https://vision2030.gov.sa/en/programs/NIDLP
