Saudi Arabia aims to make own weapons; Russia eager to help

Bloomberg

Saudi Arabia aims to build a defense industry at breakneck speed, and it’s ready to look beyond its traditional Western allies for help.
The oil-rich kingdom has long been a favourite customer of arms sellers, especially American ones. President Donald Trump announced $110 billion in deals during his trip there last year. Now, 32 year-old Crown Prince Mohammed bin Salman wants to make weapons at home, and he’s set an ambitious goal: Half of Saudi procurement is supposed to be done locally by 2030, from about 2% today.
The Saudis will need partners — which means opportunities for Western firms, who were energetically exploring them at an arms fair in Riyadh this week. But there’s a potential catch. For joint ventures to work, US and European governments may have to sign off on transfers of technology.

‘OTHER PARTNERS’
In case they’re reluctant to do so, the Saudis are making it clear that they have other options. They’re already planning to buy the Russian S-400 air-defense system, under a deal that would let them manufacture related products at home. The prospect of more such agreements is likely to alarm American policy makers, who worry about losing ground to Russia and China in the Middle East.
“We will very carefully evaluate what our partners can bring to the table,” Andreas Schwer, head of Saudi Arabian Military Industries or SAMI, said in an interview at the Riyadh fair.
“We won’t hesitate to go to second-tier suppliers or other potential partners, if they have full governmental support and no restrictions,” said Schwer, previously an executive at German defense group Rheinmetall AG. Saudi Arabia “could end up with other partners,” and with less US involvement than some people would like, he said.
FILLING THE GAPS
One of those people just delivered a warning to Congress on precisely this issue. Russia and China are seeking “to fill in perceived gaps in US interest by increasing defense cooperation and sales of their equipment to our regional partners,” General Joseph Votel, the head of US Central Command, told the House Armed Services Committee on February 27.
Russia’s influence in the Middle East has soared since 2015, when its military intervention in Syria swung the civil war in President Bashar al-Assad’s favor. China’s economic role in the region is expanding, as it signs deals with Iran and seeks to get involved in rebuilding Syria.
Saudis have cordial ties with China and Russia too. The former is one of its best oil customers, and the latter increasingly its partner in regulating world oil output. Both countries are competing with a US-backed group, headed by Westinghouse Electric Co., to win nuclear-power contracts in the kingdom. And both have expressed interest in getting a piece of the action when the Saudis put a stake in Aramco up for sale. (So has Trump, who tweeted that the oil giant’s IPO should be in New York.)