With a speed rarely seen in history, the Gulf Arab states have evolved from mere afterthoughts of colonialism to advanced countries. Located in a strategic region and propelled by extremely high levels of hydrocarbon wealth, they have sought to acquire all the trappings of modern states in record time.
The results have been impressive: from world-class long-haul airlines that have transformed travel in the eastern hemisphere to all-purpose universities, schools, and health care facilities, the Gulf states have succeeded at modernization. They have also sought to develop modern militaries and, for the most part, this was done by purchasing modern weapons and importing foreign military trainers. But such an approach is expensive and can often lead to resentment among citizens. The presence of foreign trainers, particularly in the socially conservative Arab states, may call the legitimacy of the state into question.
At the same time, the Gulf remains an insecure region. Iran continues to push for a status as the regional hegemon, an ambition that predates the Islamic Republic. It has also sponsored and conducted missile strikes into the interior of Saudi Arabia, thus showing that warfare is a real concern even for the region’s richest state. Moreover, Saddam Hussein’s invasion of Kuwait and northern Saudi Arabia in 1990 persists in people’s memories.
Saudi Arabia and the UAE Step into the Breach
The two main movers in building domestic defense industries in the Gulf are Saudi Arabia and the United Arab Emirates. Both see themselves as military powers and have the wealth and the population necessary to enable them to realize their ambitions. The two states have formed “national champions,” which are state-directed companies responsible for overseeing the development of defense industries either through joint ventures with foreign companies or by advancing local capabilities.
The two states have formed “national champions,” which are state-directed companies responsible for overseeing the development of defense industries.
A government body in Saudi Arabia, the General Authority for Military Industries (GAMI), has been created as the defense ministerial coordination point for developing a domestic defense industry. Established at the same time that the Ministry of Defense is transforming itself into a truly functioning ministry along the lines of the US Goldwater Nichols reforms, GAMI combines acquisition functions together with growth of industry to ensure a comprehensive evaluation of Saudi requirements. Saudi Arabian Military Industries (SAMI) is the commercial entity charged with developing industry in the kingdom; it has an ambitious goal of producing 50 percent of defense matériel by 2030.
The United Arab Emirates, which has a more integrated and established ministry of defense, has established EDGE as their commercial champion for defense production. The UAE has benefited from a reputation as having a competent military and has sought to position itself as America’s security partner of choice. A domestic weapons industry is seen by its leaders as a logical step to cementing this self-image.
Reasons to Develop Domestic Defense Industries
Pride. An irrational attachment to a defense industry is not unique to the Arab states; many developed nations maintain a non-commercially viable defense industry for reasons that belong more in the realm of sentiment than in strategy. States that had viable military aircraft and shipbuilding industries in the Second World War or the early Cold War period maintain them even as the costs of producing individual systems have grown beyond their range of affordability. But having a defense industry—especially one that produces visible signs of national power such as tanks, airplanes, and ships—is a powerful point of national pride. As they continue to build a national identity, Gulf Arab states tend to rely heavily on their armed forces as symbols of the new nation. It is therefore a small and logical step to reinforce the “vanguard of the state” with domestically produced weaponry. When this logic takes hold, cost is often a secondary concern, especially for a rich state. Pride is a powerful motive and often trumps economic concerns.
Economy. In a rentier state, rulers seek to use government revenues to advance government goals. Enhancing local employment and keeping resource revenues in the country are policy aims of all the Gulf countries. Defense is a logical focus for localization efforts: although defense purchases are controlled by the state, such spending is often seen more as a function of local priorities (such as “coup proofing”) than of defense against external aggression. To that end, when the rentier state finds itself under strain, the large amount of money sent overseas for weapons comes under scrutiny; therefore, developing a domestic weapons industry takes on a double advantage. First, it establishes a local industry that is relatively immune to market conditions (and thus can hire local employees without concern to cost and inefficiency), and second, it keeps money at home. In most cases, weapons will be cheaper if they are purchased from overseas; however, expense is often subordinated to the benefits of establishing a local industry.
Security. The Yemen war has exposed the fragility of the defense equipment relationship between the western arms suppliers and the Gulf states. Western democracies have had some trouble with the contrast between the priority of security (and in some cases, of economics) in providing weapons to Gulf partners while considering the authoritarian nature of these states. The disastrous war in Yemen has brought this stress into the open: some in the West see their countries selling weapons that are not being used to repel a foreign aggressor but, rather, to attack a faction in a desperately poor and dysfunctional state.
In the United Kingdom and the United States (the most important weapons providers for the Gulf states), the election of confrontational, outspoken political leaders—Prime Minister Boris Johnson and President Donald Trump, respectively—has led their political opposition to abandon the broadly national consensus on weapons sales and oppose continuing such sales as a way to attack their prime minister and president. The leaders of the Gulf states cannot be pleased by this development; for example, the continued sale of precision-guided munitions, which are key to the Saudi and Emirati air strike capability, were opposed by the US Congress and only resumed after an extraordinary invocation of a national emergency by President Trump.
The Gulf states have long chafed at western reluctance to sell some types of defense articles, most notably surface-to-surface missiles and armed drones. Senior defense officials have said the reluctance to sell such equipment shows that the West is not committed to the bilateral security relationship. Producing their own equipment (as Israel has done with drones) seems to be an obvious way around the western refusal to share certain advanced capabilities.
The reliance on western arms sources (located in democracies and thus are answerable to public opinion) has come to be seen as a weakness. So the Gulf Arab states are tentatively moving along the same path that Brazil and Turkey went down when US arms exports were restricted under the Carter Administration, seeking to develop their own arms industry as a matter of national sovereignty.
Types of Arms Industries
Many states produce weapons around the world, but not all arms industries are equal. Cultivating a domestic capability requires both human and financial resources to which not all states have access. However, the powerful factors discussed above will shape the various Gulf states’ decisions regarding their arms industries.
Saudi Arabia and the UAE have stated their aims to pursue world-class weapons production capabilities. In both instances they have sought to jump-start the process by launching joint ventures with established firms and by creating national champion companies (SAMI in Saudi Arabia and EDGE in the UAE) to coordinate these markets.
The Saudis have a very challenging target to meet. Vision 2030’s aim is to produce 50 percent of all defense materials in the kingdom. However, analysts have noted that achieving this is a financial question and it appears that no matter the expense, the target can be met in both states. Although the desirability of such a goal is debatable, in the short term, at least, both the UAE and Saudi Arabia have shown they are willing to overspend to achieve their defense goals. Whether they are driven by pride, the need to provide employment to locals, or by supply chain security concerns is uncertain; most likely, it is a combination of all three.
Not all arms industries are alike. Analysts tend to treat the sector as if it is unitary but in reality, this is not the case. There is great variance of capability and scope in weapons production depending on each country. Indeed, the two most prominent states that are developing a domestic industry, Saudi Arabia and the United Arab Emirates, would be well-served by deciding which level they wish to occupy and then focus their efforts appropriately.
First Level: Research to Production in One Country
Only superpowers (or rump states that retain the weapons industries of superpowers, such as eastern European states) are capable of having an entirely self-contained cradle-to-grave domestic weapons industry. This is a major undertaking: it requires a strong technological base across a broad range of disciplines such as supercomputing, metallurgy, physics, and other sciences. It also necessitates a robust, well-staffed industrial base and skilled craftspeople, forming an operation that can consistently produce weapons with a high degree of quality.
This level of defense industry requires a significant national training base for scientists and engineers as well as vocational skills such as welding. To build the basic as well as applied research capability required to sustain a defense industry at this level takes generations of sustained effort. While some countries have the ability to surge to this level in some areas, only the United States and Russia are truly able to achieve this across the board. As weapons become more and more a function of software, there is a possibility that the importance of technical skills—such as precision welding on aircraft and ships—will decrease slightly, though not entirely.
This level of production remains out of reach of the Gulf states for the foreseeable future. Even with the recent investment in world-class science universities in Doha, Abu Dhabi, and Riyadh, the critical mass of trained scientists in residence who can engage in truly cutting-edge research is a few generations away. An even greater impediment is the requirement for trained craftspeople to work in factories; many tend to underestimate its importance as well as the difficulty of training in expert manufacturing skills. An instructive example is how a shortage of welders inhibited Australia’s effort to develop a domestic shipbuilding industry.
Second Level: Engineering (and Reverse Engineering) Production from Existing Technology
Few countries have the capability for innovative defense research, though many have the ability to adapt existing technology into new weapons or to reverse-engineer and modify new weapons from an example of an existing weapon. North Korea’s missile program, for example, is either imported or reserve-engineered from missiles that may have been imported from Russia. Iran, which established engineering schools before the Gulf Arab states, has proven itself adept at reverse engineering surface-to-surface missile, anti-tank missiles, and surface-to-air missiles. South Africa became one of the world leaders in adapting existing technology into new platforms, creating sophisticated artillery and landmine-resistant vehicles.
Most arms producing nations fall into this category. It includes most of the NATO nations as well as established arms producers such as Turkey and Brazil. Countries with this level of expertise can produce capable aircraft such as the SAAB Gripen, armored vehicles, adaptable artillery systems such as the French CAESAR, and a variety of missiles. Electronic warfare and drones are other capabilities these countries can produce and field, as the recent Turkish successes with drones has shown.
This level is a reasonable ambition for the Gulf states. Any country that can refit modern aircraft or automobiles has the ability to operate on this level. Indeed, the UAE has already developed and fielded a large-scale missile launcher as well as an armored vehicle. While this sort of technology may not be first class, it will certainly be sufficient for most purposes and thus could satisfy all three goals of pride, economy, and security. Producing weapons in this manner will almost certainly be more expensive than purchasing similar systems produced at scale elsewhere, but this is a secondary consideration, at best, for these countries.
The advantage of this level of ambition is that it does not require the establishment of a world-class scientific community. A proficient level of engineering is a much more reasonable goal and can be achieved more quickly. A greater drawback is the lack of skilled labor; using expatriate labor to work in factories would defeat the goals of localizing employment. Indeed, it takes considerable time and effort to train workers in the skills needed for this type of work. Historically, the educational effort in the Gulf states has focused on university-level education, so there will need to be a parallel effort in vocational training and a reordering of incentives to draw local students into studying the needed trades.
The Maquiladora System
The simplest level of defense industry already exists in the region: countries can specify that weapons they purchase are assembled in their own countries from outside parts or that locally produced components are included in the weapons systems they purchase from other countries. This scenario is similar to the “maquiladora” system in Mexico where, for example, cheap labor is used to assemble automobiles from imported parts.
Of course, labor—particularly labor of local nationals—is not cheap in these countries. However, assembly plants can help these countries build the local skilled workforce that they will need to move up to a more active defense industry. In some instances, such as electronic warfare systems, export controls may limit the local purchasers to, at best, developing the metal housing into which the high-value electronic components are inserted. In other instances, components of entire systems may be shipped into the country to be assembled, as Egypt does with Abrams tanks.
This level of ambition is well suited to most joint ventures, with engineering-intensive work done overseas and relatively simple assembly work done in-country. At the same time, the limitations of the local national workforce may make this the most appropriate goal level in the long term. Any country that conducts routine aviation maintenance or industrial assembly can adapt to this type of work; however, it is important to keep in mind that the parts supply chain remains vulnerable to disruption due to political reasons.
The Gulf Arab states, particularly Saudi Arabia and the UAE, have great aspirations for their defense industry. If they are to succeed, they should have an honest discussion about their level of ambition, the strengths and limitations of their workforce, and the goals of their industry. On the other hand, with some earnest self-reflection and assessment, Saudi and Emirati leaders may seriously consider whether they want to go the route of developing an arms industry that may require high levels of spending and training at a difficult economic time.
* Remarks do not reflect US government views.