The crown prince’s surprise arrests of rivals puts him in position to execute a sweeping diversification of the country’s economy.
What does Saudi Arabia’s crown prince want to do now that he’s holding potential rivals prisoner at the Riyadh Ritz? Among other things: turn his country into a major weapons manufacturer.
Currently, Saudi Arabia is one of the world’s biggest arms importers. In May, Riyadh pledged to buy U.S.-made weapons worth up to $110 billion (a deal that Donald Trump claimed credit for, though it was in the works long before his election). The package includes THAAD missiles, spy planes, tanks, and more. But Crown Prince Mohammad bin Salman bin Abdulaziz Al Saud — informally, MBS — wants his country to produce a lot more of its own arms.
MBS is believed to have been the guiding voice behind last year’s Saudi Vision 2030, which lays out an agenda for diversifying the Saudi Arabian economy beyond oil. Among other things, the plan aims to enable the country to build half of its own military weapons in less than two decades.
“We have already begun developing less complex industries such as those providing spare parts, armored vehicles, and basic ammunition,” the plan says. “We will expand this initiative to higher value and more complex equipment such as military aircraft. We will build an integrated national network of services and supporting industries that will improve our self-sufficiency and strengthen our defense exports, both regionally and internationally.”
Mohammed bin Salman’s surprise arrests of 11 Saudi princes and several other officials — a move that many in the West saw as a massive consolidation of power, particularly over the military and security services — turns the crown prince into a one-stop shop for the Kingdom’s arms decisions. He’s in a perfect position to execute on his strategy with no opposition.
In theory, as the Kingdom builds more weapons internally, his Western arms suppliers might expect to lose profits. But that ignores the market’s see-saw nature, said one defense industry analyst. A former senior manager at a top U.S. defense company, the analyst spoke on condition of anonymity, citing the sensitive nature of his current work with various defense firms.
“People like to think that [Saudi Arabia] is this multi-billion dollar market every single year. That’s just not the case. They maintain what they have” — such as tanks and other vehicles, said the analyst. “From a Lockheed Martin perspective or from a Northrop Grumman perspective, it’s been a big chase.”
Contractors have opened up to the idea of working to build up Saudi companies, which isn’t necessarily less lucrative than simply exporting arms to the Kingdom. Lockheed Martin has rushed to ink deals to co-build Black Hawk helicopters and satellites with Saudi firms. Boeing, too, is looking to establish a foothold in the Kingdom’s nascent arms industry through a company called Alsalam Aerospace, a nominally Saudi company that operates as a subsidiary of BITG Corporation, a Boeing subsidiary.
In effect, these firms are agreeing to something much more like a marriage than a traditional buyer-seller relationship. But with Mohammed bin Salman in the mix, such long-term partnerships carry a lot of risks — dangers that were apparent even before the weekend’s power moves. MBS is seen as the driving force behind Saudi Arabia’s increasingly violent proxy war with Iran in Yemen. He’s also credited with the Kingdom’s hardball economic tactics against Qatar. The recent arrest spree is yet another move sure to make future business wary. Who wants to be in a long-term relationship with a guy who just arrested 11 relatives?
“You would be cautious for sure,” said the analyst. “It is certainly a watch point. The rest of the story is: will business continue to flow? No one was predicting what happened [over the weekend] but business has not been affected. Arguably, Western businesses— yes they are cautious. But the signs are still positive because modernization is required to do some of the big things that they [the Saudi Arabian government] are talking about. And, like it or not, this was a step toward more modernization and openness.”
The analyst said defense contractors would look to the U.S. government for reassurance that the relations with the Kingdom are normal. “You would weigh it in terms of everything else, in terms of what the discussion is like government to government. You would want to make sure that the U.S. embassy and the State Department are engaging closely and directly with MBS and his people,” he said.
Gerald Feierstein, director for Gulf affairs and government relations at the Middle East Institute, put it in starker terms. “By upending the Saudi tradition of consensus in decision-making and centralizing political and economic control, the Crown Prince takes sole ownership of Saudi Arabia's future in a way that no predecessor has attempted. The success of Vision 2030 requires enormous social and economic reforms, and its success is far from certain. To a large extent, Mohammed bin Salman has gambled his own fate on its outcome,” Feierstein said in a statement.
The State Department did not respond to a request for comment.
Marcus Weisgerber contributed to this report.
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