President Biden’s visit may cement Saudi-American defense ties

Special President Biden’s visit may cement Saudi-American defense ties
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The US has supported three key security organizations in the Kingdom through FMS: The Ministry of Defense, the National Guard and the Ministry of Interior. (Supplied/Reuters)
Special President Biden’s visit may cement Saudi-American defense ties
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Saudi Arabia has become one of the largest consumers of defense equipment, owing to the need to defend itself from threats. (AFP file photo)
Special President Biden’s visit may cement Saudi-American defense ties
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Saudi Arabia has become one of the largest consumers of defense equipment, owing to the need to defend itself from threats. (AFP file photo)
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Updated 15 July 2022

President Biden’s visit may cement Saudi-American defense ties

President Biden’s visit may cement Saudi-American defense ties
  • As strategic allies, the US and Saudi Arabia already share more than $100 billion in active foreign military sales
  • Defense ties have been further cemented by Lockheed Martin’s space technology partnership with the Kingdom

RIYADH: The United States and Saudi Arabia have an established relationship in terms of security, with more than SR375 billion ($100 billion) in active foreign military sales that President Joe Biden can build on during his visit to the Kingdom.

According to the US Embassy and Consulates website in Saudi Arabia, the two countries have developed consultations on the Middle East peace process, Gulf interests, and international economic and development issues.

The US has also supported three key security organizations in the Kingdom through FMS: the Ministry of Defense, the National Guard and the Ministry of Interior.

As the US’ most significant FMS customer, the Kingdom committed SR88.9 million in early 2022 on advanced weapons sales to upgrade its missile defense systems.

The purchase will include 31 Multifunctional Information Distribution System-Low Volume Terminals.

This deal came after the US State Department approved the potential sale of 280 AIM-120C air-to-air missiles in November 2021, valued at up to SR2.4 billion. In the wake of bumps on the road, US-Saudi relations are being reset with new military sales deals from the Kingdom.

The November sale was the first major foreign military sale to the Kingdom by the Biden administration since taking office and adopting a policy of selling only defensive weapons to the Gulf ally.

SR1.87 billion was the first military sale made under the Biden administration in September 2021, reported CNN.




Saudi Arabian Military Industries has partnered with multinational firms in developing the Kingdom's weapons industry. (Supplied)

Space technology prowess

Another notable development that cemented the US-Saudi defense ties was Lockheed Martin’s space technology partnership with the Kingdom.

Joseph Rank, CEO of Lockheed Martin in Saudi Arabia and Africa, told Arab News on the sidelines of the World Defense Show in Riyadh that it is the only US company that has sold the Kingdom a military satellite to provide secure communications.

HIGHLIGHTS

The two countries have developed consultations on the Middle East peace process, Gulf interests, and international economic and development issues.

The November sale was the first major foreign military sale to the Kingdom by the Biden administration since taking office and adopting a policy of selling only defensive weapons to the Gulf ally.

SR1.87 billion was the first military sale made under the Biden administration in September 2021, reported CNN.

Another notable development that cemented the US-Saudi defense ties is Lockheed Martin’s space technology partnership with the Kingdom.

In addition to its aerospace, arms, and information security divisions, the Washington-based company has a separate division for space.

As part of the Kingdom’s ongoing efforts to localize 50 percent of its military spending by 2030, Lockheed Martin completed two deals with its military regulatory body at the WDS in Riyadh in early 2022.




A US Air Force B-52 Stratofortress flies with Saudi F-15SAs during a bomber task force mission in the Gul area on Jan. 27, 2021. (USAF photo handout via AFP) 

As part of the program to localize the Terminal High Altitude Area Defense Weapon System, the Kingdom’s General Authority for Military Industries said that the first project is to localize the manufacture of missile interceptor launchers, and the second is to produce missile interceptor canisters locally.

“What’s exciting about this is that it gives the Kingdom the world’s most advanced missile defense system, which will keep it safe from the increased threats that we see around the region and the world,” said Rank.

He warned that today and tomorrow’s threats will be drones and missiles coming into the Kingdom, “so the focus of our efforts is to help them enhance their defense.”

Rank explained that this is being done with digital counter missiles, counter-drone systems, and a critical command and control system that will be produced mainly in the Kingdom and maintained by Saudis. It will be “a sovereign and commercial system, not subject to export approvals.”

 

Betting on air power

According to the Lockheed Martin executive, the growth is driven by Saudi Arabia’s need to defend itself from threats. Since the Kingdom is one of the largest consumers of defense equipment, “it only makes sense for them to produce their systems locally.”

It is working with GAMI and the Saudi Arabian Military Industries to build capability and capacity in the local industry. According to Rank, the 50 percent requirement was “challenging,” but it was what they “signed up to do.”




The Saudi Arabian Military Industries has partnered with multinational firm such as Lockheed Martin in developing the Kingdom's weapons industry. (Supplied)

Aside from providing training, spare parts and technical expertise for all the systems they sell to the Kingdom, he said Lockheed Martin is also an official partner with GAMI’s academy.

“The academy will initially start as a vocational-technical school to help teach young Saudis how to handle complex defense and mechanical challenges, and they will teach them how to sustain, repair and eventually design their systems,” Rank added.

He also said that Lockheed Martin started internship programs at Saudi universities “to create an ecosystem of R&D on campuses.”

The US also has a well-entrenched relationship with the Royal Saudi Air Force, which began with the purchase of the Kingdom’s initial F-15C/D fleet in 1978, according to a statement by Boeing.

After the Gulf War in the early 90s, the RSAF acquired additional F-15C/Ds, followed by F-15S Strike Eagles, to enhance its capability with one of the most advanced multi-role platforms in the world.

A foreign military sales agreement signed in December 2011 between the Kingdom and the US included F-15SA fighter jets, AH-64E Apache attack helicopters, AH-6 light attack/armed reconnaissance helicopters, Harpoon missiles, Joint Direct Attack Munitions, and Small Diameter Bombs, as well as associated support and training. This was, according to Boeing, the largest agreement in US history.




US F-15 fighter jets, manufactured by McDonnell Douglas, which is now part of Boeing, are the mainstay of the Royal Saudi Air Force. (AFP file photo)

Boeing and SAMI signed an agreement in 2022 to form a Kingdom-focused joint venture to provide maintenance, repair, and sustainment services for the country’s rotorcraft platforms.

Boeing has provided the Saudi Arabian Armed Forces with over 400 defense aircraft during its 77-year partnership with the Kingdom. Boeing’s investment also aims to develop the Kingdom’s aviation, defense, and space sectors through seven local partnerships.

The Ministry of Defense may receive more support due to Biden’s planned visit to the Kingdom to discuss both countries’ relationship with Crown Prince Mohammed bin Salman.

 

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74% of online shoppers prefer local e-commerce over cross-border platforms

Waleed Al-Saud, CEO of Mukatafa
Waleed Al-Saud, CEO of Mukatafa
Updated 03 June 2023

74% of online shoppers prefer local e-commerce over cross-border platforms

Waleed Al-Saud, CEO of Mukatafa

RIYADH: Saudi Arabia’s retail sector is eyeing significant growth on the back of its e-commerce market, as 74 percent of online shoppers in the Kingdom are expected to shift from global to local platforms.
In its recent report, leading global management consulting firm Kearney and Saudi consulting company Mukatafa noted that local and hybrid players are making strong headway against their international counterparts from China, the Gulf Cooperation Council, Europe and the US.
Valued at SR19.3 billion ($5.14 billion), the Kingdom’s e-commerce market is 6 percent of the overall SR347.2 billion retail market. It is expected to further grow to SR34.7 billion to reach 7.5 percent of the overall retail market by 2026, according to the report.
An expanding e-commerce ecosystem will pave the way for innovation, job creation and private-sector growth in line with the Kingdom’s Vision 2030 objectives.

It is a strong sign that local e-commerce businesses are gaining more traction in the market. We must make sure that these businesses are supported to thrive as well as cross-border accounts.

Waleed Al-Saud, CEO of Mukatafa

“This flourishing e-commerce ecosystem empowers citizens to use innovative digital payment options, in line with government initiatives under Vision 2030 to guide private sector investments to provide critical pillars for the sector’s growth, such as increasing cashless transactions and expanding the geographical coverage of e-commerce delivery beyond the Kingdom’s major cities,” said Mohammed Dhedhi, partner at Kearney Middle East.
He added: “The growth of the local and hybrid e-commerce players will contribute to protecting consumer interest and promoting local investments with strong potential for job creation.” The report revealed that cross-border online shopping is expected to generate less income as local and hybrid companies gain traction.

FASTFACTS

• The report noted that local and hybrid players are making strong headway against their international counterparts from China, the GCC, Europe and the US.

• Valued at SR19.3 billion, the Kingdom’s e-commerce market is 6 percent of the overall SR347.2 billion retail market.

Cross-border online shopping is likely to decrease from 59 percent of all e-commerce revenue in 2021 to 49 percent by 2026.
The report noted that more assistance should be provided to create a level playing field for all e-commerce participants, safeguarding consumer interests and encouraging domestic investment.
“It is a strong sign that local e-commerce businesses are gaining more traction in the market. We must make sure that these businesses are supported to thrive as well as cross-border accounts,” Waleed Al-Saud, CEO of Mukatafa, said. He added: “Thresholds on import quantities could be introduced, and local quality standards could be mandated for cross-border players. It is these types of initiatives that will need to be addressed if we are to create a level playing field for all e-commerce players. As it stands, current regulations in the market favor cross-border players, and until that changes, cross-border sales will continue to hold a major share of the e-commerce market compared to local players.”

 

 


‘Women in Tech’ competition brings Saudi female entrepreneurs to the fore

Doaa Aref, CEO of Chefaa
Doaa Aref, CEO of Chefaa
Updated 03 June 2023

‘Women in Tech’ competition brings Saudi female entrepreneurs to the fore

Doaa Aref, CEO of Chefaa
  • Sahm app claims first place and received $25k, Nqoodlet bags second position with a prize of $15k

CAIRO: Going by the success of the “Women in Tech” competition, it is evident that female-led startups are set to revolutionize Saudi Arabia’s technology sector.  

The competition that was recently held in Riyadh saw entrepreneurs undergo an eight-week incubator program, showcasing innovative ideas in various sectors, including fintech, health tech, property tech and edutainment.
In collaboration between global banking group Standard Chartered and Saudi-based investment firm Falak Investment Hub, the program hosted eight startups with the top three being awarded a total of $50,000 in equity-free grants.   

The most significant shift in our landscape in KSA will be the change in sentiment, investment appetite and innovation, says Adwa Al-Dakheel
CEO of Falak Investment Hub

Sahm, a stock trading app, claimed first place and received $25,000. Nqoodlet, a fintech company, bagged second position with a prize of $15,000, and Chefaa, a health-tech platform, secured third place and received $10,000.  
Speaking with Arab News, Jawaher Al-Yahya, the CEO of Sahm, said that the company will continue to optimize and refine its product to achieve the right market fit.  

HIGHLIGHTS

• The competition that was recently held in Riyadh saw entrepreneurs undergo an eight-week incubator program, showcasing innovative ideas in various sectors, including fintech, health tech, property tech and edutainment.

• In collaboration between global banking group Standard Chartered and Saudi-based investment firm Falak Investment Hub, the program hosted eight startups with the top three being awarded a total of $50,000 in equity-free grants.

She further added that women faced difficulty in gaining experience in leadership positions in addition to a lack of funding and resources.  
Sahm will utilize its funding to invest in marketing initiatives to increase brand awareness as well as enhance product capabilities, Al-Yahya reiterated.  
Replying to a question regarding hurdles women in the technology sector are faced with, CEO of Falak Investment Hub Adwa Al-Dakheel attributed the pursuit of perfection as the major barrier for women entering the tech scene.
“Seeking perfection in innovation and startups means not launching in the right market timing and waiting for extreme validation instead of building upon continuous yet smaller validations,” Al-Dakheel told Arab News.  
Doaa Aref, CEO of Chefaa, and Mai Abdulwahab, founder of Nqoodlet, both said that lack of funding is the main barrier for women in tech globally.
Awards were distributed during a special event, under the patronage of the Small and Medium Enterprises General Authority, known as Monsha’at, in the presence of its Deputy Gov. Saud Al-Sabhan.  
Al-Sabhan delivered a speech during the event about the importance of women entrepreneurs stating that Monsha’at contributed to increasing the number of female-led enterprises to more than 467,000.  
“The most significant shift in our landscape in the Kingdom will be the change in sentiment, investment appetite and innovation. Top founders will move to Saudi Arabia to grow and start their businesses here, and the world’s biggest investors will follow,” Al-Dakheel said. 

 


Respite for oil market amid rate hike worries

Respite for oil market amid rate hike worries
Updated 01 June 2023

Respite for oil market amid rate hike worries

Respite for oil market amid rate hike worries
  • Oil markets may have been oversold in the last two trading days, says analyst

RIYADH: Oil steadied on Thursday as a potential pause in US interest rate hikes and the passing of a crucial vote on the US debt ceiling bill were offset by a report of rising inventories in the world’s biggest oil consumer.

US Federal Reserve officials on Wednesday suggested interest rates could be kept on hold this month and the US House of Representatives passed a bill suspending the government’s debt ceiling, improving the chance of averting a disastrous default.

Brent crude futures fell 10 cents, or 0.14 percent, to $72.50 a barrel by 1339 GMT while US West Texas Intermediate crude rose 7 cents, or 0.1 percent, to $68.16. Both benchmarks fell on Tuesday and Wednesday.

“Oil markets may have been oversold in the last two trading days,” said CMC Markets analyst Tina Teng. “Sentiment rebounded amid the debt bill’s passage in the House and (the) Fed’s rate hike pause signal.”

HIGHLIGHTS

Market sources citing American Petroleum Institute figures on Wednesday said that US crude inventories rose by about 5.2 million barrels last week.

• Brent crude futures fell 10 cents, or 0.14 percent, to $72.50 a barrel by 1339 GMT while US West Texas Intermediate crude rose 7 cents, or 0.1 percent, to $68.16.

Mixed demand indications from China, the world’s biggest oil importer, have nonetheless weighed on the market, as has industry data showing a rise in US crude inventories.

Market sources citing American Petroleum Institute figures on Wednesday said that US crude inventories rose by about 5.2 million barrels last week.

“The current mood is one of pessimism,” said Tamas Varga of oil broker PVM. “Investors have been pragmatic and risk averse of late.”

Also in focus is the June 4 meeting of the OPEC+ producer group, in which the Organization of the Petroleum Exporting Countries and allies including Russia will discuss whether or not to cut oil production further.

Barclays forecast

British multinational bank Barclays has slashed the average price of its Brent crude forecast for this year from $92 to $87 a barrel. The bank also slashed its price forecast of Brent for 2024 as it cut the average projected price to $87 a barrel from $97. 

Chinese company in Brazil 

China’s CNOOC Ltd. has begun production at the Buzios5 well off the coast of Brazil, the company said in a statement on Thursday. 

The well is the fifth phase of the Buzios oil field off Brazil’s southeast coast. At an average water depth of 1,900 meters to 2,200 meters, the field is the world’s largest deep-water pre-salt oil field, with daily production of 600,000 barrels, the company said. 

CNOOC’s Brazilian subsidiary owns 7.34 percent of the Buzios shared reservoir, which is 88.99 percent owned by Brazilian state-owned oil and gas company Petrobras.  CNOOC paid $1.9 billion to Petrobras last year to secure a 5 percent stake in a production sharing agreement at the field. 


UAE’s in-country value projects driving billions to local firms

UAE’s in-country value projects driving billions to local firms
Updated 02 June 2023

UAE’s in-country value projects driving billions to local firms

UAE’s in-country value projects driving billions to local firms

ABU DHABI: More than $27.23 billion has been redirected to the local economy since the UAE Ministry of Industry and Advanced Technology (MoIAT) and ADNOC launched major in-country value programs to support domestic industries.

Speaking at the Make in the Emirates Forum, Abdulla Al-Shamsi, Assistant Undersecretary of MoIAT, said more than $14.43 billion of investment was redirected to the local economy last year alone, an increase of 25 percent year-on-year.

“The National In-Country Value Program is a nationwide program that speaks one language across many different sectors,” Al-Shamsi said. “It’s one methodology and this is something we’re very proud of because it benefits the private sector and when the private sector sees this it helps them prepare, invest, and spend.”

The forum heard how the National ICV Program is “functionating well and accelerating.”

The forum also heard how industrial zones are playing a critical role in the in the country’s sustainable industrial development and broader economic prospects. Local industrial leaders described how they are utilizing alternative energy resources such as solar and hydrogen to reduce their carbon footprint.

The second edition of the Make it in the Emirates Forum concluded on Thursday with the UAE showcasing its unique value proposition to international investors.

Investors were invited to explore opportunities and competitive advantages, with panel discussions focusing on the National In-Country Value (ICV) Program, the role of industrial zones, competitive financing as a key enabler and local talent in the private sector.

The UAE’s industrial exports reached $47.6 billion in 2022, growing 49 on 2021. The industrial sector's contribution to GDP rose to $49.5 billion in 2022, a 38 percent increase on 2020.

The Make it in the Emirates Forum is organized by the Ministry of Industry and Advanced Technology in partnership the Abu Dhabi Department of Economic Development (ADDED) and ADNOC.

On the first day of the forum, the UAE government announced $2.7 billion in industrial offtake agreements, building on the $29.9 billion of offtake agreements announced at the 2022 edition of the forum.


Saudi fintech firm secures $3.2m in seed funding

Saudi fintech firm secures $3.2m in seed funding
Updated 01 June 2023

Saudi fintech firm secures $3.2m in seed funding

Saudi fintech firm secures $3.2m in seed funding

RIYADH: EdfaPay, a Saudi-based fintech startup that helps companies use their smartphones for payment, has raised $3.2 million in a seed funding round.

The funding round was led by Sanabil 500 MENA, Nufud Wealth International, Atmiid Investment, Basmah Commercial Investment, and a group of local and international angel investors.

EdfaPay aims to utilize the capital to strengthen its operations in the Kingdom and expand to Pakistan and South American countries.

Founded in 2022 by Ghormallah Alghamdi and Nedal Sabbah, it uses NFC technology to allow companies to collect payments through smartphones.

In February 2022, the firm secured $1.6 million in a pre-seed funding round led by Nuwa Capital, InspireUs VC, and Wallan Investment Group.

The fintech channeled its acquired funds into launching its financial services across the Kingdom and supported its market-entry efforts.

The Kingdom’s fintech investments reached $400 million in 2022, recording a 79 percent increase compared to 2021.

The Saudi Central Bank, also known as SAMA, is one of the country’s key players in enabling fintech across all subsectors.

Earlier this week, SAMA granted licenses to Spotii and Madfu, two fintech companies that aim to offer consumer financing options.