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JEDDAH: ��������’s military equipment manufacturing sector is undergoing a significant expansion, emerging as a pivotal element of the Kingdom’s Vision 2030 economic diversification strategy to boost domestic industrial capacity.

Supported by robust government backing, strategic global partnerships, and growing local innovation, the defense industry is becoming a critical contributor to national security and a promising source of non-oil revenue.

Under Vision 2030, �������� aims to localize 50 percent of its military spending by the end of the decade. The sector’s regulator, the General Authority for Military Industries, reported notable progress, with localization rising from 4 percent in 2018 to 19.35 percent in 2024 — reflecting steady advances toward self-sufficiency in defense manufacturing.

The Kingdom’s military expenditure reached $75.8 billion in 2024, according to official estimates, representing 3.1 percent of global defense spending. Using its own methodology, the Stockholm International Peace Research Institute estimates the figure slightly higher at $80.3 billion.

The country has allocated about $78 billion for the military sector in its 2025 budget — 21 percent of government spending and 7.2 percent of gross domestic product — supporting its goals to diversify the economy and reduce oil dependence.

GAMI is driving efforts to attract investment, support small and medium-sized enterprises, and develop a strong defense industry spanning aerospace, armored vehicles, and missile systems, as well as electronic warfare, and UAVs — boosting both national security and long-term industrial growth.

Global defense spending hits $2.7tn

According to its April 2024 report Trends in World Military Expenditure, SIPRI said global military spending exceeded $2.7 trillion in 2024, marking a decade of continuous annual growth and a 37 percent increase between 2015 and 2024.

“The 9.4 percent increase in 2024 was the steepest year-on-year rise since at least 1988. The global military burden — the share of the world’s GDP devoted to military expenditure — increased to 2.5 percent in 2024. Average military expenditure as a share of government expenditure rose to 7.1 percent in 2024, and world military spending per person was the highest since 1990, at $334,” the report added.

The US, China, Russia, Germany, and India are the top five military spenders, making up 60 percent of global defense expenditure. The US leads with $997 billion — more than three times China’s $314 billion, while Russia’s spending rose 38 percent to $149 billion. Germany and India spent $88.5 billion and $86.1 billion, respectively.

SIPRI estimated Middle East military spending at $243 billion in 2024, up 15 percent from 2023. 

�������� led the region with $80.3 billion, ranking seventh globally, just $1.5 billion behind the UK.

“Its spending was 1.5 percent higher than in 2023 but 20 percent lower than in 2015 when its oil revenues peaked,” the independent institute said.

Sector key to economic diversification

Khaled Ramadan, chairman of the International Center for Strategic Studies in Cairo and an economic expert, described the Saudi military industries sector as a cornerstone of the country’s economic diversification efforts and a vital pillar of Vision 2030.

“Localizing military industries reduces reliance on imported weapons,” Ramadan said, emphasizing the sector’s role beyond defense. “It also supports advanced industries such as electronics, telecommunications, aviation technology, and advanced manufacturing, contributing broadly to non-oil economic growth.”

amadan projected the military manufacturing sector will contribute SR14 billion ($3.7 billion) to the Kingdom’s GDP by 2030, with military exports expected to reach $666 million. “This will boost non-oil revenues and create more job opportunities for Saudi youth,” he said.

He also said the sector had 300 licensed firms by 2024, reflecting rising investor interest, with 40,000 jobs expected by 2030, mainly in technical fields like engineering and electronics.

“This is in addition to skills development through specialized training programs conducted in partnership with global institutions to enhance competencies in technologies such as artificial intelligence and cyber warfare,” he said, adding the sector’s growth boosts demand in manufacturing and tech, supports private jobs, cuts unemployment, and promotes hiring of young Saudis.

Qualitative partnerships and technology transfer

In May, �������� produced its first THAAD missile components with US-based aerospace and defense company Lockheed Martin, while agreements with Turkish firms Baykar, Fergani Space, and Aselsan will boost UAV, space, and defense electronics capabilities.

Moreover, the launch of BAE Systems Arabian Industries, formed by merging BAE Systems Saudi Development and Training with the Saudi Maintenance and Supply Chain Management Co., aims to accelerate localization in maintenance and technical services.

Highlighting how vital global collaborations are to ��������’s military manufacturing goals, Ramadan pointed to partnerships with leaders like Lockheed Martin for THAAD missile components, Boeing for aircraft support, and France’s CMN for HSI32 fast interceptor boats, providing access to advanced technologies and expertise.

“These partnerships are examples of a balanced strategy combining foreign technology acquisition with domestic capacity building,” he said. 

This approach is supported by the establishment of 21 research centers focused on developing military technologies, especially in electronic warfare and drones, targeted for 2030.

Ramadan said local and foreign investments in military manufacturing are projected to reach SR37.5 billion by 2030, with SR6 billion allocated by GAMI specifically for research and development.

He added that domestic military procurement has already reached SR13 billion, with local production covering drones, defense systems developed by sustainability-focused firms, and fast interceptor boats.

Despite this progress, Ramadan said that achieving localization goals will require intensified investments and overcoming legal and technical obstacles.

Talent development and inclusion

Launched by ��������n Military Industries in 2024, the Women in Defense program supports sector growth by empowering Saudi females through training and leadership initiatives. Overall, the military industries sector is expected to generate 60,000 indirect job opportunities by the end of the decade, supporting broader economic diversification goals.

The economic expert described this initiative as part of SAMI’s broader collaboration with international universities to enhance national expertise in engineering and advanced manufacturing.

Ramadan said that the sector’s expansion is expected to create thousands of jobs, particularly in high-demand areas such as engineering and electronics, while driving the need for labor in related industries and strengthening private sector participation.

SAMI’s transformation as a catalyst

SAMI marked 2024 as a turning point, launching the Kingdom’s first combat management system, expanding its workforce to over 7,000, and securing global partnerships.

Echoing Ramadan’s insights, Youssef Saidi, research fellow at the Economic Research Forum and a member of the Saudi Economic Association, told Arab News that the Kingdom is undertaking ambitious and wide-ranging initiatives to attract foreign investment into the defense sector.

“The ��������n Military Industries is leading these efforts through strengthening strategic partnerships and joint ventures with major global companies,” Saidi said, adding that the Kingdom is firmly committed to technology transfer, local defense manufacturing, and investing in national talent and research and development as integral parts of international defense contracts.

He further said that GAMI is working to foster an attractive investment climate, support manufacturers, and leverage ��������’s considerable defense spending to position the Kingdom as both a regional hub and a global exporter of military products.

Reflecting on SAMI’s development, Saidi highlighted the company’s “profound transformation and rapid growth” since its establishment, which has made it a cornerstone of Vision 2030.

“SAMI has achieved remarkable growth in its revenues and contracts, expanded its employee base by 633 percent to reach 2,500 male and female employees by 2022, and successfully entered the list of top 100 global defense companies, advancing 19 places to rank 79 in 2023,” he said.

Saidi added that, supported by the Kingdom’s status as one of the world’s top defense spenders, these efforts have shifted �������� from a major arms importer into an ambitious, self-reliant player and trusted partner, making it an “international prize” for global defense companies seeking strategic and profitable partnerships.
 

KARACHI: Pakistan has begun work on a “National Agri Stack” to build digital infrastructure for its agriculture sector, aiming to boost farmer access to credit, subsidies and markets, the ministry of IT said on Friday.

Agriculture is the backbone of Pakistan’s economy, employing more than a third of the workforce and contributing around a fifth of gross domestic product. The sector faces persistent challenges, however, including low productivity, fragmented landholdings, water scarcity and climate shocks, while farmers often lack formal identification and credit histories needed to access finance.

The Agri Stack initiative, led by the Ministry of Information Technology and Telecommunication (MoITT) in collaboration with the Ministry of National Food Security and Research (MNFSR), the Land Information and Management System (LIMS) and the Special Investment Facilitation Council (SIFC), seeks to integrate land and farmer data, deliver targeted services and improve transparency in farm support.

In simple terms, the Agri Stack will create a “digital ID and online service hub” for every farmer in Pakistan. It will gather all key information — who the farmer is, what land they own or work on, what crops they grow — into one secure system. This means the government, banks and agri companies can deliver the right help directly to the right farmer, including subsidies, loans, crop insurance, weather updates and market prices.

The system is meant to cut out paperwork, reduce delays, stop resources from going to the wrong people and give farmers better tools to grow and sell their crops.

“The Agri Stack will enable verified farmer identities, land data integration, precision advisory, and efficient delivery of services like subsidies, crop insurance, and credit,” said Federal IT Minister Shaza Fatima Khawaja at a stakeholder consultation in Islamabad, according to a statement from the IT ministry.

“This is the architecture for an inclusive and tech-driven agricultural transformation under Prime Minister Shehbaz Sharif’s Digital Nation Pakistan, in collaboration with the Special Investment Facilitation Council (SIFC).”

LIMS Director General Maj Gen (R) M Ayub Ahsan Bhatti said the platform, also called PAKGROW, would “innovate the agricultural arena of Pakistan by transforming and improving the lives of small farmers and convening policymaking.”

The consultation endorsed forming a steering committee co-chaired by MoITT and MNFSR, a technical working group on data and cybersecurity, and pilot projects over the next 12–18 months. Priority areas include smart input subsidies, weather-indexed crop insurance, credit access through alternative data, and market linkages via LIMS.

Officials said the Agri Stack would combine satellite-driven crop intelligence, digital IDs, trusted payment systems and market platforms to create a “digitally empowered agricultural future.”

If implemented effectively, experts say a national Agri Stack could help Pakistan tackle some of its most entrenched agricultural challenges by giving farmers verified digital identities, streamlining subsidy and credit delivery, and providing timely, data-driven advice on crop management.

Integrating land records, satellite imagery, and market information into a single digital platform could reduce leakages in government support programs, expand financial inclusion for smallholders, improve resilience against climate shocks and connect rural producers more directly to buyers. This would ultimately boost productivity, transparency and rural incomes in a sector that underpins both the economy and national food security.