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Saudi Arabia Defence and Security Report Q4 2012
BMI’s Saudi Arabia Defence and Security Report for Q4 2012 examines the country’s strategic position in the Middle East and the wider world. It provides an overview of the contemporary geopolitical challenges facing the country, and the challenges it may face in the future, especially in the context of the ongoing Arab Spring.
In addition, the report examines the trends witnessed in the country’s current and future defence procurement, and the order of battle across its armed forces. The report’s general conclusion is that Saudi Arabia will continue to invest heavily in defence procurement, giving it military superiority over most of its neighbours in what will remain a volatile region; but that the long-term security outlook is less certain, given domestic political pressures that the essentially authoritarian government is unlikely to address through democratic reforms.
The death of Crown Prince Nayef in June and his replacement with another member of the royal family’s ageing inner circle was a reminder that the country will have no choice but to embrace a new generation of leaders in the not-too-distant future. This could mean an opening for democracy, but possibly also a moment of danger in terms of national stability. However, for the time being the state’s formidable security apparatus should be equal to any popular unrest, such as the recurrent protests in the Shi’adominated Eastern Province.
Saudi Arabia’s region remains volatile, though BMI also notes that there were positive signs of the government in neighbouring Yemen making progress against Islamist militants in Q2. Relations with Iran are extremely tense, and it may prove difficult for Riyadh to stay out of any conflict between the US and Iran, should that occur, especially if Tehran attempts to foment unrest in Saudi Arabia’s Shi’a regions.
However, the decision of newly elected Egyptian President Mohamad Morsi to make Riyadh his first foreign destination will have encouraged the Saudis that their close security alliance with Cairo did not cease with the downfall of former President Hosni Mubarak.
Meanwhile, the US’s announcement of its long-term military plans for the Middle East should not directly affect Saudi Arabia, which no longer hosts major US bases. However, the country will benefit strategically from the US commitment to station 40,000 troops in the region following its withdrawal from Afghanistan and Iraq, and will continue to buy American arms in significant quantities. According to the World Bank, Saudi Arabia now spends more than any other country on defence as a proportion of GDP – it spent 10.4% of its GDP last year – and according to some forecasts its military expenditure will top U$50bn for the first time this year.
Over the last quarter BMI has revised the following forecasts/views:
- The implications of the death of Crown Prince Nayef for the country’s security and stability are outlined in detail. The general conclusion is that while Nayef was the architect of Saudi Arabia’s police state, his death will have little impact in the short to medium term. However, the country’s dwindling inner circle of eligible future kings could soon force a shift in the way Saudi Arabia is governed.
- The most recent violence in Eastern Province are discussed, with large demonstrations having been sparked in July by the shooting and arrest of a well-known Shi’a cleric.
- The effects of the situations in Yemen and Syria on Saudi Arabia are also discussed in detail. There is additional analysis of Saudi Arabia’s improving ties with Turkey: traditional rivals, the two countries are now working together on Syria and other important regional issues.
- Several major defence procurements were confirmed during the last quarter. These include a U$2.5bn deal with BAE Systems for Hawk jet trainers; two orders secured by Nexter Systems for armoured vehicles and artillery systems; and a possible agreement with Krauss-Maffei Wegman for up to 800 Leopard 2 tanks.
SWOT Analysis 7
Saudi Arabia Security SWOT 7
Saudi Arabia Defence Industry SWOT 9
Saudi Arabia Political SWOT 10
Saudi Arabia Economic SWOT 11
Saudi Arabia Business Environment SWOT 11
Global Political Outlook 12
No Respite From Political Risks 12
Global Flashpoints: Eurozone, Iran, Syria, Afghanistan, Korea 12
Table: Election Timetable 15
Wild Cards To Watch 20
Middle East Security Overview 23
The Strategic Outlook For The 2010s 23
The Middle East In A Global Context 23
Challenges And Threats To Stability And Security 24
Regional Power Dynamics 34
Nuclear Proliferation 36
External Powers 37
Scenarios For The Middle East 38
Security Risk Ratings 41
Table: Middle East And Africa Defence & Security Ratings 41
Table: Middle East And North Africa State Vulnerability To Terrorism Index 42
Political Overview 43
Domestic Politics 43
Long-Term Political Outlook 45
Foreign Relations 49
Iran Nuclear Dispute Crib Sheet And FAQ 49
Saudi Arabia Security Overview 54
Internal Security Situation 54
Table: Insurgent Groups 55
External Security Situation 57
Latest Developments 61
Armed Forces And Government Spending 63
Armed Forces 63
International Deployments 63
Weapons Of Mass Destruction 64
Market Structure 65
Arms Trade Overview 66
Industry Trends And Developments 67
Industry Forecast Scenario 71
Armed Forces 71
Table: Saudi Arabia’s Armed Forces, 2000-2008 (’000 personnel, unless otherwise stated) 71
Table: Saudi Arabia’s Available Manpower For Military Services, 2009-2016 (aged 16-49, unless otherwise stated) 71
Defence Expenditure 72
Table: Saudi Arabia’s Government Defence Expenditure, 2009-2016 72
Table: Saudi Arabia’s Defence Expenditure Scenario – Changing % Of GDP, 2009-2016 (US$mn) 73
Defence Trade 74
Table: Saudi Arabia’s Arms & Ammunition Exports, 2009-2016 (US$mn) 74
Table: Saudi Arabia’s Defence Imports, 2009-2016 (US$mn) 74
Table: Saudi Arabia’s Defence Trade Balance, 2009-2016 (US$mn) 75
Key Risks To our Forecast Scenario 75
Macroeconomic Outlook 76
Company Profiles 79
BAE Systems 79
Thales International 80
BMI Methodology 81
How We Generate Our Industry Forecasts 81
Defence Industry 81
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