Defence Industry | Lawrence van Rijn

This morning Arab News (at https://arab.news/9hjca) gave us ‘First Saudi-made THAAD system parts completed in Jeddah’ Saudi Arabia has been aiming for the need of internal national interests to have this done. We are given “Saudi Arabia has completed the first domestically manufactured components for the Terminal High Altitude Area Defense system launcher in Jeddah, marking a significant step forward in the Kingdom’s ongoing efforts to localize its defense industry.” And as we are given “Tim Cahill, president of missiles and fire control at Lockheed Martin; Nawaf Al-Bawardi, assistant deputy of the General Authority for Military Industries; and Wasim Attieh, president of AIC.” We seemingly are all OK with this, this is not really news. Saudi Arabia was aiming for this all along. In this case the Terminal High Altitude Area Defense system launcher (THAAD) was on show. But the story goes beyond that. I reckon that the FEINDEF 2025 (Spain) as from today was the second initial kick off, but there were other symptoms. There was the (DSA 2024) in Kuala Lumpur and the International Defence Exhibition and Conference (IDEX/NAVDEX) in Abu Dhabi, UAE. I personally believe that Saudi Arabia kept close eyes on the ready date of this system as it allows them to gain interest from Bangladesh, Egypt and Indonesia, they might not be ‘big league’ material, but Bangladesh and Egypt represent almost $5 billion each and Indonesia represents $11 billion. Now, they don’t spend it all in one go, but Saudi Arabia is said to get a speculated part of that and even with a mere 200 million (over all three) that becomes a massive boost for the Saudi Defence industry, even more so, it would be revenue that America and Russia loses. Gives the expression “when two dogs fight for a bone, the third runs away with it” a new side to that equation. So as Lockheed Martin is locking in their services and consultancy for close to another decade, Saudi Arabia’s first delivery system is gaining strength in the defence industry. Bangladesh being 35th, Egypt 19th and Indonesia 16th. They are giving strength to the Saudi Defence industry. So as I saw that market evolve in February 10th 2022 in my story ‘Oh darn, I am missing out’ (at https://lawlordtobe.com/2022/02/10/oh-darn-i-am-missing-out/) with those decrepit tea grannies, it took Saudi Arabia a mere 3 years to evolve their own market. They now have their own industry. So cry “stop arming Saudi Arabia” all you like, the only thing they’d hurt was the British defence industry. And as I see it, they are about to do a lot more than hurt ‘the British business’, they are gaining political power by giving the Arabian nations and Asian nations their own voice, not hindered by America, Russian or British political powers. Now they (meaning Saudi Arabia) become the global political power player.

As I see that, I am reminded of the old setting that my granny complained about the essential need of the young to rely their technology, so I switched off her life support. How’s that for fun?

The world is getting smaller and the reach of every nation is increasing and now we see clear settings (not through alleged sport washing) that Saudi Arabia is becoming the larger power in the global arena. In the 2025 edition of “The Military Balance” from the International Institute for Strategic Studies (IISS) is currently on the 7th place, yet if this takes off Saudi Arabia will be in a position to become 5th, optionally 4th and their defence industry will be making a profit as the Arabian nation will see that Saudi Arabia is the ‘friend’ to hold in esteem, as that starts happening Pakistan might also change vendor it is at present a mere $10 billion, but as it is only 12% of India, it might see reason to switch if Saudi Arabia is willing to talk shop and that is another slice of pie that will not end in America’s or England’s budget. As I personally see it a start has been made for Saudi Arabia to become less dependent on their oil industry. Starting ‘small’ is a beginning, so as Saudi Arabia creates more options. I reckon that they would likely evolve their drone industry next, Saudi Arabia is becoming a much larger industry. Only 5 years ago we would have seen an industry with America, Russia, China and the United Kingdom as players. Now even at 5th place, Saudi Arabia becomes the new player in town and that sets a new premise for global economies. Russia and America never had to share that revenue pie and I guess they will have to content with less as per 2026 onwards.

A nice setting for Saudi Arabia who is likely to seek more revenue from Pakistan as it is outmatched to India at 2:1 in the best settings they can hope for and that allows for larger business benefits for Saudi Arabia. We tend to forget that war is business and their business is war. A little outdated setting, but we forget that it isn’t ugly to some, it is a payday. An essential need for any nation is to defend itself from enemies hostilities and that setting is over 2000 years old. It was given to us by Julius Caesar (that Italian dude). He did so in Commentarii de Bello Gallico at 50BC.

I reckon that the Saudi defence industry will be more than a simple blip by the time we get to 2027, still three years ahead of the schedule we saw 5 years ago.

And as I personally see it, these tea grannies (CAAT) are still drinking tea, but the option for a biccie with that tea will soon be done for, because the revenue you hurt also impacts what you can have and they vied for less, so they will have less. I take my learning from someplace else. America decided to hurt Huawei as they were a threat, now we have HarmonyOS entering version 5.0, and Reuters gave us last November that ‘Huawei wants 100,000 apps on Harmony OS within a year’, and set that against Alphabet (Google) had announced plans to cut 12,000 jobs, or 6% of its global workforce In January 2023, Amazon laying off 14,000 people in name of efficiency? (Source: MSN) and in 2023 Microsoft laid off approximately 10 000 employees followed by an additional 4 000 roles being cut in 2024. So with these big three ‘decimated’, who will counter Huawei? As I see it no one and now Huawei will have another industry to set foot in. Because all these Saudi systems require automation (as well as other options) as such HarmonyOS will be seen almost everywhere and that is only the beginning. Those who push to limit others, merely limit themselves and we have plenty of evidence there.

As I see it the shifting space of America is seeing that they never wanted other to be in certain places. This sounded like an idea in the 80’s when America was a global power, but they no longer are. They are mere steps away from becoming a third world country. You cannot remain a 3.4% military spending of GDP whilst being seen as a 37% of global spending. A 997 Billion invoice where in the fiscal year 2024, the U.S. federal government collected $4.92 trillion, not whilst you have $36.21 trillion in federal debt (and they cannot pass a budget either), it just cannot be done. As such the America setting will implode all whist their tech is set to impossible markers.

As we consider this and we consider that the Russian stage merely sounds better (whilst it isn’t) there is every possibility that be 2027/2028 Saudi Arabia could become 4th or 3rd as a defence industry by that time. The idea that Saudi Arabia surpasses or equals America in three years is making me giggle. How the mighty fall, so how’s that for looking great, President Trump? It started on your watch in 2020 and almost a decade later you become allegedly surpassed by Saudi Arabia by 2027, a nice footnote in your memories and I reckon you will blame everyone but yourself in that writing. I am curious what the World Defense Show 2026 in Riyadh International Convention and Exhibition Center will give us. I reckon that Saudi Arabia will have a few nice surprises in that show. I am willing to bet that Huawei will have a stand there to in showing us what the Internet of things driven by HarmonyOS will give the world. I reckon you need to reserve tickets for the event on February 8-12, 2026 now. As I see it the first day will be for the larger customers, so February 8th has been sold out to preferred customers. So, when will you optionally go?

I won’t be invited, so let me know how the snacks were, they tend to be magnificent at these events. Now I’m hungry, time for some peppered crackers. Have a great day.

It was the setting I was waiting for. The US has given in to its economic pressures and possibly the fear that China might get to much of a headway. Reuters this morning gives me (and other readers) at https://www.reuters.com/world/us-lift-ban-offensive-weapons-sales-saudi-arabia-sources-say-2024-08-09/ the headline ‘US to lift ban on offensive weapons sales to Saudi Arabia’, which sounds nice but is possibly a little late. Colonel Turki Al-Maliki a member of the Saudi airforce had given us the goods, going all the way back to February 2021. Reuters reported on these attacks in March 2021. In this Reuters is important as they give us ‘Houthis have fired 430 missiles, 851 drones at Saudi Arabia since 2015 – Saudi-led coalition’, the setting is important because civilian targets were aimed at by Houthis amongst them were Saudi airports and structures. So the blockage by the US was weird, especially as the Houthis are a terrorist organisation. So the about turn under the guise of “The Saudis have met their end of the deal, and we are prepared to meet ours”, a little late, isn’t it? But at present the Chinese representatives of parties like the Chengdu Aircraft Industry Group is nothing to be sneered at, with the Chengdu J-20 as an optional buy which was (allegedly) discussed at the World Defense Show 2024 in February 2024 (a speculation from me) is giving the Chinese hope to gain much more from the American Defence Industry. Should the Kingdom of Saudi Arabia take that offer, the setting would open the doors (for China) to larger possibilities in Egypt and the United Arab Emirates as well. The damage to the American Industry could amount to an estimated loss of $30-$50 billion over these three nations alone. Not to mention the lucrative service and consultancy jobs. It would be the first definite slam to the value of the US dollar. China is rearing to take up that option in a heartbeat. I discussed (and partially speculated) this in ‘The next Furlong’ which I wrote on March 10th 2022 (at https://lawlordtobe.com/2022/03/10/the-next-furlong/), as such I was and am now in a stage to emphasise the term ‘told you so’. This setting was clear then and it is a speculated more clear now when we see “Under U.S. law, major international weapons deals must be reviewed by members of Congress before they are made final. Democratic and Republican lawmakers have questioned the provision of offensive weapons to Saudi Arabia in recent years, citing issues including the toll on civilians of its campaign in Yemen and a range of human rights concerns.” We are about to go into election mode and some politicians will fear for their job a lot more than the American Economy. As such China has a decent chance to crush the American Defence industry. I doubt they fear the Russian abilities as the Russians are getting clobbered by the 20th largest army in the world. The Ukrainians are still damaging the Russian, even after the Russians bombed Ukraine into the stone age. That is not a good sales talk, especially with the current Russian losses stated below

As such we can accept the Reuters statement, because of its projected validity, yet the words we are given “Democratic and Republican lawmakers have questioned the provision of offensive weapons to Saudi Arabia in recent years”, yet the article doesn’t emphasise the attacks by Houthi’s on Saudi civilian targets, which Colonel Turki Al-Maliki showed many clearly going all the way back to 2021, many articles were drowned out by (speculatively speaking) by anti Muslim and anti Saudi voices. Now that China gets to move into a much stronger position, the American administration is taking the gloves off and do what needed to be done in 2021. I reckon that people like Stephanie Kirchgaessner will possibly raise anonymous sources to throw sand in the cogs of common sense. China will love this as this will enable them to get a squadron on Chengdu J-20 into place and optionally ‘gift’ three service teams in the mix, two for maintenance and one to train Saudi troops. The losses to America will be vast and it will a long term loss.

As such I think that they were over 2 years late to the party. The initial transfer settings were optionally carved (I have no clear evidence of this) in the airshows of 2021 by SAMI. That would have been the first introductions of Chinese hardware that was to replace whatever America wasn’t giving them at that time. As I personally see it, it might be too late now. You see the Russian losses as shown above are the second piece of evidence. In that setting Russia is no longer a contender and as they are now ‘acquiring’ missiles from North Korea we see a larger question mark, is it merely the lack of missiles or does Russia have a larger problem. I do not know, but Russia isn’t telling, so we are left to our speculations and the Kursk clambake of 2024 Makes things worse for Russia. And in that setting China gets to be the big winner. OK, I admit, this victory would be largely held by the Chengdu Aircraft Industry Group (and supporting parties).

Have a nice day and feel free to watch American revenues move to the far east.

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