Saudi Vision 2030: An approach towards Indigenous Defense Industry.
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Saudi Vision 2030: An approach towards Indigenous Defense Industry
Overview
The military capability of any sovereign nation determines how well the country fairs on both economically and socio-politically. The ambition of Kingdom of Saudi Arabia (KSA) is manifested by its desire to localize its defense industry by 2030 strategically. KSA is the third biggest spender on defense. The current budget is $87.2 billion dollars (“Domestic arms Production”). It is approximately 30% of the entire budget. Only a negligible of these needs is made locally, and thus the department costs KSA heavily.(“Military Analysis: Saudi Arabia’s Armed Forces” 1) Localizing the defense industry has been known to be an efficient tool towards economic development. In the 1960’s, amidst a crisis, Korea’s administration decided to cut down heavily on consumer goods to increase military development (“How North Korea Developed Its Arms Industry” 1). The nation currently has a formidable military prowess and the economic growth has propelled the technological advances to turn it into a powerhouse. Likewise, Turkish mantra of “freedom and independence” has seen it emphasize on an almost complete reliance on indigenous defense mechanisms (“Turkey’s Formidable Defense Industry – Rising Star or NATO’S Unruly Ally?” 1). The goal of achieving self-dependency in defense is, therefore, achievable in KSA and with potential for immeasurable benefits.
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Philosophical andMethodological Approaches
Research philosophy is very significant in the understanding of the smooth transition from doxology towards epistemology. Doxology is a scientific term describing what is believed to be true as opposed to the epistemology, which highlights well-established facts (Aliyu et al., 2014). In carrying out an analysis of the defense system of a given nation, there is no time for speculation but rather dealing with real evidence. As acknowledged perfectly in the above overview section, KSA’s intention is to initiate a self-dependency mechanism that supports the desired growth. Therefore, to stay on course with the analysis, the current study relies more on scrutinizing the available literature to deduce the desired recommendations. As such, the philosophical approach preferred on the subject issue is interpretivism.Interpretivism, also known as non-positivism is the perfect replacement of positivism (which emphasizes on an experimental approach).
In a study by Aliyu et al. (2014) during their exploitation of the available research paradigms, the non-positivist approach is motivated by the understanding of the issue and making varied predictions regarding prospects. By relating it to the topic of interest, it is possible that KSA can achieve defense industry self-dependency in the span of thirteen years to come. However, the possibility of that not happening also needs to be put into consideration, an aspect that is covered by interpretivism. In a relatable coverage, an analytical piece by Al-Othaimin acknowledged all the available possibilities and obstacles of KSA advancing towards having a fully equipped defense industry. However, Al-Othaimin also indicates that it is still a challenge, which can be solved. A study by Woods (2015) covering a diverse issue, but concerning the defense industry, excels well in using a non-positivist approach. As such, a qualitative research methodology is put to use. In the current analysis, a review of secondary data will be prevalently used to understand the phenomenon at hand. The superiority of a qualitative approach is best manifested by its ability to exploit better the prevailing events. For the Saudi defense industry, it is important to understand all the available loopholes of growth that the vision 2020 can remain a reality.
Literature Review
A study carried out by Sorenson (2014) creates an understanding as to why KSA is the third biggest spender in the global defense industry and why much of its resources are directed to the US, world’s most powerful nation. While it is of great significance that KSA adopts a self-dependency regime with regards to the defense industry, it is also important to acknowledge that several political benefits are linked to its current state (Sorenson, 2014). The benefits are not only limited to KSA, but also the US. In an analytical article on the The New York Times by Shanker and Sanger (2010), the two go-ahead to acknowledge that the US was preparing to make the largest Arms sales in its history. The sale was to be made to Saudi Arabia. Within their analysis, Shanker and Sanger (2010) claim the larger picture was to make a political statement in the Middle East region where the move was meant to minimize the superiority of Iran’s nuclear program. By exploring the issue on this platform, it is evident that both KSA and the US benefit from high spending on armament, an aspect that Sorenson (2014) does not fail to acknowledge.
According to Sorenson (2014, 116), KSA has invested heavily in their defense industry for some foreseeable benefits. Some of the aspects mentioned by Sorenson (2014, 116) include factors such as taking precaution against external threats, establishing internal loyalty, upholding a certain level of national prestige, and gaining the support of important allies such as the US. Through the period from 2004 to 2011, KSA was the only Middle Eastern country that was among the top fifteen countries that spend heavily on their defense industries. In 2010 alone, KSA made a deal with the US that surpassed the economic magnitude of previous maneuvers (Sorenson, 2014, 116; Shanker and Sanger, 2010). In 2013, Sorenson indicates that Riyadh spent 9.1 percent of its GDP on procuring weapons from the US. This made KSA be among the top 5 spenders, a trend that has resulted in the nation surpassing the spending capability of Russia.By remaining in its current state, KSA enjoys all these benefits. However, these does not mean that all the privileges will be lost once KSA decides to walks on its path as presented in the vision 2030.Analytical studies used by Sorenson (2014) to advance his course indicate that the high spending spree by KSA does not befit its status well. Bad reputations such as buying friends and having an inexperienced, weak army are inevitable to avoid. As such, KSA has to evaluate its value in the establishment of self-autonomy. The money committed to buying weapons can be appropriately used to lay the background of an internal defense system. According to Sorenson (2014, p. 126), the US plans to cut on its military spending over the course of the next decade. Therefore, it is only rational if KSA took a route that will ensure the future defense industry is secured without reliance on external stakeholders.
According to Borchert and Widdershoven (2016), the defense industry dynamics in the entire Arab countries is changing for the good. According to the two scholars, a common assumption is that Arab countries are the biggest spenders when it comes to setting up their military systems. This is true for KSA, which as indicated by Saab (2014), has managed to be among the top military spenders globally. The situation is, however, beginning to tilt towards self-dependency as powerful transatlantic nations have witnessed a logistical change towards their defense industries. The US is also following suit soon and for the dependent countries to secure a stable future, Borchert and Widdershoven (2016) indicate that self-growth is imminent. As the two scholars go ahead to scrutinize MENA countries, one revelation is that there are already pacesetters who are making their defense industries indigenous, a similar journey that KSA is still prospecting on.Borchert and Widdershoven acknowledge the fact that since the beginning of the 1950s, a handful of committed Arab countries have largely focused on locally expanding their defense systems. Some of the countries that exhibit this indigenization approach despite the immense obstacles include Turkey, United Arab Emirates and Egypt (Borchert and Widdershoven, 2016, 1). The way has not been smooth for the three Arab nations, but significant policy changes with regards to the wellness of their military systems are being seen.
Despite Borchert and Widdershoven acknowledging that only three Arab countries (Turkey, UAE, and Egypt) have made significant strides in localizing the defense industries, Al-Othaimin (2016) shows otherwise when it comes to the case of KSA. According to Al-Othaimin (2016), Saudi’s current objective is to achieve a 50 percent military industrialization as opposed to the current two percent. In making sure that such prospects are achieved, Al-Otaimin (2016) shows that country already has a strong background in additions to its current monetary advantage. As acknowledged by Sorenson (2014), KSA has enough money to influence the decisions made in the region. This is evident in the capability of KSA partnering with other players in the region to synchronize military training exercises for their defense systems. Factoring in the geopolitical dynamics of the region, Borchert, and Widdershoven (2016) show that the approach towards defense development has changed.
Besides this issue, Al-Othaimin exhibits that KSA has a strong background in the military industrialization project. Just like the three Arab counterparts, KSA also began in the early 1950s, but the lack of serious commitment by subsequent governments has been a major undoing. In 1949, King Abdulaziz made sure that military factories were put in place. According to Al-Othaimin, the initiative was to ensure that the nation developed its defense sector. In addition to making serious political maneuvers and appointments, KSA launched an offset program back in 1985. The significance of the program was to make sure that foreign exporters partnered with the local military equipment companies to foster the much-desired expansion. According to Borchert and Widdernshoven (2016, 11), the offset program has managed to place KSA at a more desirable place. The current tasks related to the program include assembling and maintaining the available military equipment that is acquired. The final factor is that KSA has the required raw material that acts as the necessary precursors towards domestic military industrialization. While it is nowhere close to what Turkey or UEA is doing, Al-Othaimin (2016) indicates that it a significant step towards achieving the vision 2030 of 50 percent industrialization.
With regards to the offset program that is described by Al-Othmin as the right maneuver to enable KSA in making significant steps, Hoyos and Amman (2013) show that Turkey has been the most successful with regards to incorporating that particular strategy. As opposed to the distance covered by KSA in military industrialization, the 30 years journey taken by Turkey to attain its current status implicates the efficiency of the offset program. Within the program, Hoyos and Amann indicate that a company from the US, General Dynamics, transferred the assembly of the ordered air crafts in the Turkish Aerospace Industry (TAI). The working population at TAI grew proportionally with the amount of tasks and fighter jets that were being assembled within Turkey. With strong adherence to the offset program, Turkey has managed to achieve success, promoting itself from a weapons importer to an established exporter that is among the top 20 in the world. The Turkey’s experience can be used appropriately to prove the economic and political benefits that accompany indigenization of the defense industry. In their analysis of Turkey, Borchert and Widdershoven (2016, p.7) indicate that the country’s military section has grown mainly due to four different actors. In a process that began as an offset program, the resultant four actors include fully owned government facilities, private entities, government-operated companies, and joint ventures with international players (Borchert and Widdershoven, 2016, 7). The partnership with international dealers is mainly limited to government involvement.
Borrowing a leaf from Turkey, it is evident that both economical and political benefits can be achieved from indigenous military industrialization. According to Hoyos and Amman (2013), Turkish defense exports exceeded $1.2 billion in 2012. The significant increase from what was posted in 2011 showed better prospects for the future. This is a significant economic statement. In an analysis carried out byKhalid and Noor (2015), economic growth is proportional to military expenditure in developing countries. For a country to sustain a localized military industrialization maneuver, the economic output needs to be stable. By reviewing close to 67 developing countries, a major conclusion made by Khalid and Noor (2015) is that military stability is an incentive for economic growth. A relatable study on the economic impact of military R&D is carried out by Dunne and Braddon (2008). According to Dunne and Braddon (2008), the positive economic magnitude of military industrialization covers aspects such as technology transfer. Information Technology is a wide field that can spill over to guide serious innovations in relatable industries. Through commitment towards military R&D, Dunne and Braddon (2008) acknowledge that a territory gains a competitive edge over close associates. Besides technology transfer, the partnership with multinationals in such a technological sector can act as a default incentive to encourage foreign direct investment in other relatable sectors. By undergoing a defense industry stabilization process, Turkey is one of the pacesetter countries showing that the inevitable can be overcome. As such, Saudi Arabia can also undergo the same process with a positive assumption that numerous benefits can be realized.
The Strategic Defense Intelligence (2016) has already analyzed that until 2021, KSA will still be investing a substantial amount into the procurement of weapons. This, however, does not align or provide proper incentives to the countries prospects of advancing ahead to becoming autonomous. In another analysis, Karasik et al. (2016) analyze the capability of KSA developing and an indigenous defense system. The three scholars tackle the issue by describing the potentialities and challenges that can face KSA in its quest to becoming defensively autonomous. With a plan already put in place by the government, Saudi needs to make effective use of its available resources. With an ever increasing expenditure on defense industry issues, Karasik et al. (2016) and the Oxford Business Group exhibit that KSA has the required economic strength to make a step that will see reduce the ‘overreliance syndrome’ on foreign suppliers. However, despite KSA prospecting for indigenization of the defense industry, expert analysts also factor in potential challenges.
Based on the analysis carried out by Karasik et al. (2016), one of the main issues to challenge KSA’s initiative is the selfish nature of the suppliers to share their intellectual property rights. Despite maintaining a peaceful relationship with foreign suppliers such as the US and the UK, Karasik et al. (2016) indicate that countries have not made any initiatives of technology transfer for geopolitical purposes. The militarization of KSA acts as a threat to established western nations. The other challenge raised by Karasik et al. (2016) is that the offset program in KSA is largely limited. The first aspect is that such programs when combined with the original supply contracts, tend to cost a nation a substantial amount. The second factor is that some of the offset program initiatives that were earlier implemented in KSA only concentrated on non-important issues such as assembly and mentainance (Karsik et al. 2016). Unlike Turkey that began by putting a stronger emphasis on manufacturing, KSA has witnessed its offset projects come short of the desired expectations. To make sure that vision 2030 is achieved, KSA has to make sure that it perpetuates regional military development initiatives, a concept that is largely shared byBorchert and Widdershoven (2016).
Reflection
The analysis of the literature related to the indigenization of Saudi’s defense industry has provided many insights on the subject issue. One clear aspect is that analysts have not given much emphasis on the emergence of Arab countries as military powerhouses. However, this does not mean that no initiatives to autonomize military initiatives are unavailable. For instance, KSA is a country widely known to make huge investments in procuring defense system utilities from foreign suppliers. A closer view from several analyses shows that KSA already has the much-needed ingredients to forge ahead as a military hub.
The parent goal of this study despite reviewing the available literature, remains to determine how KSA will achieve its stated vision and what potential benefits remain to be yielded. The current literature has only strengthened the authenticity of the research questions to be used. Using the case of Turkey, the potential benefits of the initiative undertaken by KSA can be extrapolated. The study design remains to be qualitative in nature. Factoring the issue of resources required and the limits that are linked to an experimental approach, case study analysis of organizations and nations that indigenized will be appropriate for the entire undertaking.
References
Aliyu, A.A., Bello, M.U., Kasim, R. and Martin, D., 2014. Positivist and Non-Positivist Paradigm in Social Science Research: Conflicting Paradigms or Perfect Partners?.Journal of Management and Sustainability, 4(3), p.79-95. http://www.ccsenet.org/journal/index.php/jms/article/download/39893/22135Al-Othaimin, I., 2016. Saudi Vision 2030: From arms imports to military industrialization. Saudi Gazette.http://saudigazette.com.sa/opinion/saudi-vision-2030-arms-imports-military-industrialization/ Accessed 07 Jan 2017
Borchert, H and Widdershoven, C., 2016. The dawn of a new Arab Defense Industrial network. Arab Defense Industry Papers No. 1, pp.1-20. https://www.borchert.ch/content/ger/cmsfiles/files/1607_ADIP_01-16.pdfDunne, J.P. and Braddon, D., 2008. Economic impact of military R&D. Brussels: Flemish Peace Institute. http://www.flemishpeaceinstitute.eu/sites/vlaamsvredesinstituut.eu/files/files/reports/vvi_web_rapport_militairerend_en.pdfHoyos, C and Amman, A., 2013. Turkey builds domestic defense industry. Financial Times. https://www.ft.com/content/837ef75a-1980-11e3-afc2-00144feab7de Accessed 07 Jan 2017Karasik, T et al., 2016. Can Saudi Arabia create an indigenous defense industry? http://www.realcleardefense.com/articles/2016/10/25/can_saudi_arabia_create_an_indigenous_defense_industry_110252.htmls Accessed 07 Jan 2017Khalid, M.A. and Noor, Z.M., 2015. Military expenditure and economic growth in developing countries: evidence from system GMM estimates. Journal of Emerging Trends in Economics and Management Sciences, 6(1), p.31-39. http://jetems.scholarlinkresearch.com/articles/Military%20Expenditure%20and%20Economic%20Growth.pdfOxford Business Group. Saudi Arabia emphasizes development of local defense firms. https://www.oxfordbusinessgroup.com/overview/maturing-market-high-levels-investment-sector-kingdom-placing-emphasis-developing-local-defenceSaab, Y., 2014. The Gulf Rising: Defense Industrialization in Saudi Arabia and the UAE. p. 1-52. https://www.files.ethz.ch/isn/182154/The_Gulf_Rising.pdfShanker, T and Sanger, D. E., 2010. Obama is said to be preparing to seek approval on Saudi Arms Sale. The New York Times.http://www.nytimes.com/2010/09/18/world/18arms.html Accessed 07 Jan 2017Sorenson, D.S., 2014. Why the Saudi Arabian Defence Binge? Contemporary Security Policy, 35(1), pp.116-137.
Strategic Defense Intelligence, 2016. Future of the Saudi Arabian Defense Industry- Market Attractiveness, Competitiveness Landscape and Forecasts to 2021.
Woods, E.H., 2015. A Phenomenological Study of Female Gender Inequality in the Defense Industry. http://scholarworks.waldenu.edu/cgi/viewcontent.cgi?article=1335&context=dissertations
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