According to a recent report, Lockheed Martin (NYSE: LMT) plans to invest $1 billion in Saudi Arabia to help the Saudi military manufacture its military equipment locally.
Joseph Rank, chief executive for Lockheed Martin in Saudi Arabia and Africa, told Arab News on Tuesday that Lockheed plans to work with the Saudi General Authority for Military Industries (GAMI), the Saudi Arabian Military Industries (SAMI), and other partners to develop missile defense systems to ward off threats.
“The threats today and tomorrow are going to be drones and missiles coming into the kingdom,” Rank said. “So, the focus of our efforts is to help them enhance their defense.”
Rank said there are many ways Lockheed can achieve this. One Bloomberg report includes counter missiles and counter drones that use critical command and control systems that connect sensors to shooters out in the field.
Saudi Arabia’s ‘Vision 2030’
Since Saudi Arabia is one of the largest defense buyers in the world, localizing its military manufacturing would save the country lots of money. How much? An April 2021 report by the Stockholm International Peace Research Institute indicated that Saudi Arabia had the sixth-largest defense budget in the world in 2020, roughly 2.9 percent of all military spending worldwide.
The report also says that Saudi Arabia spent as much as 8.4 percent of its gross domestic product on its military in 2020. This year, the country plans to spend up to $45 billion to modernize its military toward a plan the Saudi Arabian government calls “Vision 2030,” which calls for the government to spend half of its military budget locally by 2030.
At the same time, Lockheed is also investing in scholarship and internship programs at local colleges and universities in Saudi Arabia to improve research and development efforts.
“We’re an official partner with GAMI that is going to initially start as a vocational-technical school to help teach Saudis young Saudis how to do complex defense, mechanical challenges so that they can sustain and repair and eventually design their systems,” Rand said in the Arab News report.
