Building indigenous defence industries is strategically attractive but can be challenging to execute. Earlier Arab efforts, particularly Egypt’s post-1950s’ programmes, were ambitious but enjoyed limited success. Today, Saudi Arabia and the UAE are pursuing defence industrialisation on a far larger, and better-resourced scale. This article examines traces the path from early ambitions to the capabilities in the present day.
While the logic of developing an indigenous defence production capability is inescapable, the difficulty comes in developing the ability to turn intention into action. For many of the Gulf states, the circumstances were just not conducive to investing in a domestic defence industry. They did not have the appropriate resources, nor did they possess a suitable labour force; and in many cases, there was just no real requirement to build a local defence industrial capability in support of the limited military capabilities that they were able to sustain at the time.
That is not to say that defence industrial developments were not a part of the defence picture across the broader Arab World. Egypt is the most obvious example of the development of a defence industrial capability in the Arab World with the starting point being the possession of maintenance and repair facilities from the colonial era. Egypt also had ambitions to build a highly capable defence industry. One area that was primed for development was aircraft – initially trainer aircraft and then the development of an indigenous combat aircraft. The process started in the 1950s with the production of the Czech version of the German Bücker Bü 181, piston-engined trainer, under license as the Gomhouria. The programme was a success and the aircraft was built in substantial numbers.
The next phase of aircraft development was collaboration with Spain on the Hispano HA-200, designed by Willy Messerschmitt. The aircraft was built ay Helwan in Egypt during the 1960s, with some 90 aircraft built. The HA-200 provided the basis for a much more ambitious programme, another Messerschmitt design – the Helwan HA-300. Initially this was a Hispano project to develop a light supersonic combat aircraft for the Spanish Air Force, though they abandoned the project for technical and financial reasons. At the end of the 1950s, Egypt decided to take over the programme to develop a lightweight interceptor fighter to be built at Helwan.
The Egyptian HA-300 project would also see the development of an indigenous engine based on the Brandner E-300 design of Austrian origin, which would replace the British Orpheus engine used on the original Spanish design. Work in Egypt on the HA-300 began in the early 1960s, but by 1969 the project was cancelled due to over complexity and cost. Instead, Egypt turned to the Soviet Union to meet its combat aircraft needs.
In this era, the Nasser government also looked to develop an indigenous ballistic missile capability, another ambitious and costly project reliant on foreign technical know-how that would never be completed. In the 1970s and the 1980s, Egypt would again look to develop a ballistic missile capability, based on Soviet technology and, as before, the programme failed to deliver a result. In fact, the only indigenous programme from the 1960s that delivered was the Walid, a 4×4 wheeled armoured vehicle inspired by the Soviet BTR-40 design. Over 1,000 Walid vehicles were built between the 1960s and the 1980s.
Egyptian defence industrialisation would then fade into insignificance for a number of years, before returning in a less ambitious but more logical format. Although Egypt once harboured dreams of acting as the defence industrial centre for the whole Arab World, its defence industry activities are now directed towards meeting domestic Egyptian needs, through the manufacture of a complete range of small arms of both Soviet and Western origin, grenade launchers and RPGs. There is local production of anti-tank missiles of Soviet, Chinese and Korean origin, with local artillery consisting of multiple rocket launcher systems, and there will also be local production of the Hanwha K9 self-propelled howitzer (SPH). There is extensive local production of light armoured vehicles systems and Egypt also locally assembled M1A1 Abrams tanks in large numbers. The country has extensive maintenance, repair and overhaul capabilities, as well as significant system upgrade capabilities.
Mention should also be made of Egyptian naval shipbuilding capabilities, based at the Alexandria Shipyard, where, three Naval Group Gowind 2500 corvettes have been built for the Egyptian Navy. The Alexandria Shipyard has also built a TKMS MEKO A-200EN frigate for the Egyptian Navy, which is in the process of looking to acquire a new conventional attack submarine (SSK) to replace existing submarines that have reached end of life; it is thought likely that they would look for local production of at least some of these future submarines.
Development spectrum
Egypt is a large country with a population of more than 111 million. By contrast, Jordan, with a population of a little over 11 million, has far fewer resources to play with and yet it has established a local defence industry, though admittedly on a smaller scale compared to Egypt and other regional states. In 1999, the King Abdullah Design and Development Bureau (KADDB) was established to provide equipment and related services for the Jordanian Armed Forces. KADDB was subsequently rebranded as the Jordan Design and Development Bureau (JODDB) with its objective being to develop specific solutions to meet Jordanian needs; these can range from personal equipment, to sighting systems, a recently developed counter-unmanned aerial vehicle (C-UAV) system and protected mobility, amongst other programmes. JODDB also looks to market its expertise and systems to friendly militaries and security forces.
Bearing in mind their strategic situation, it was a logical move for both Egypt and Jordan to develop indigenous defence industries, although the development of these industries was limited by resources in terms of personnel, materiel and the financial means that could be applied to industrial development.
Others were less constrained, which is particularly true of defence industrial development in the Gulf States, and our focus will be on defence industry developments in two particular Gulf states – Saudi Arabia and the United Arab Emirates (UAE). The financial resources that these two countries have at their disposal dwarfs anything that Egypt and Jordan have access to and this is reflected in their defence industry ambitions.
The main source of revenue for Saudi Arabia comes from crude oil, oil refining, liquified natural gas (LNG) and petrochemicals. With a population of 36.5 million, the Saudi government needs to create economic opportunities for its citizens, oil and related industries cannot provide employment for all, nor can government jobs cover employment demand. Another important consideration is that the price of oil and other energy products fluctuates, meaning that over-dependence leads to vulnerability and complicates economic planning.
Some years ago, it was recognised that it was sensible to diversify the economy. There was also a process known as ‘Saudisation’, which sought to replace foreign workers with native Saudis. Significant investment efforts were made in education to boost the capabilities of and the possibilities available to the local workforce. Saudi Arabia is changing and there is now a modernisation agenda that seeks to start a process of transformation in the country. Aspects of this include the decision to open up the country to foreign tourism, large-scale megaprojects and offering new opportunities to private sector businesses to diversify the economy.
In May 2017, Saudi Arabian Military Industries (SAMI) was established as an enterprise owned by the Public Investment Fund of Saudi Arabia (PIF); SAMI’s objective is to meet the demand that 50% of national military expenditure is spent in Saudi Arabia by 2030. SAMI aims to be one of the Top 25 defence companies in the world by 2030, part of a policy known as ‘Vision 2030’.
SAMI has signed a number of cooperation agreements with foreign companies to cover programmes in Saudi Arabia, with potential partners including major US contractors, European companies and even Rosoboronexport of Russia. Turkish industry in the shape of Aselsan and unmanned aerial vehicle (UAV) manufacturer Baykar have also signed a number of Memoranda of Understanding (MoU) with SAMI. Naval shipbuilding has proven to be an area of SAMI’s interest with MoUs signed with Navantia of Spain and Naval Group of France.
A pre-existing defence enterprise, the Military Industries Corporation has been folded into SAMI. This company was established in the 1950s, initially to manufacture small arms and small arms ammunition. Weapons produced under license include types from Heckler & Koch (HK) and Russia’s Kalashnikov Concern. Artillery ammunition is produced including 155 mm and 105 mm rounds. A number of light armoured vehicle designs have also been produced, some of which have been exported, and various Tatra truck models are produced locally.
In 1988, the Advanced Electronics Company (AEC) was established in Saudi Arabia – among the original shareholders was BAE Systems. The company was involved in defence electronics and aerospace, including for example, the maintenance of F-15 systems for the Royal Saudi Air Force (RSAF) and the manufacture of electronic systems for other US-origin combat aircraft. In December 2020, AEC was acquired by SAMI, marking a significant step in the development of a comprehensive Saudi defence industrial capability.
Under Vision 2030, Saudi Arabia is developing a national space strategy via the Saudi Space Agency (SSA). According to the CIA World Factbook, SSA’s objective is to: “use the space sector to accelerate economic diversification, enhance scientific research and development, and raise private-sector participation in the global space industry; manufacture and operate communications, remote sensing (RS), and scientific satellites; develop a range of satellite subsystems and payload technologies.” Saudi Arabia is also credited as the main founder (in 1976) and source of funding for the Arab Satellite Communications Organisation (Arabsat).
With PIF backing, SAMI has access to the financial support necessary to continuing developing and expanding its capabilities. SAMI is obviously a major asset for Saudi defence capabilities, but its goals are ambitious. It aims to bring advanced technology into the country and develop indigenous high technology solutions, all of which will eventually raise the technology base and capabilities of the economy as a whole. SAMI also aims to play a key role in training and developing the skilled workers that Saudi Arabia will need to further develop its national economy.
The UAE solution
While the UAE’s population sits at a little over 10 million, the difficulty comes from the fact that only about 12% are Emirati citizens. Where Saudi Arabia has to create job opportunities for its population, the UAE finds itself in a situation where it does not really have enough Emirati citizens to meet its military and economic objectives. In economic terms, the UAE’s main revenue source is oil and oil-related products such as petrochemicals. The UAE leadership recognised many years ago that they needed to diversify their economy and they have achieved significant success in this regard.
Earlier diversification efforts involved the creation of a facility to manufacture ceramic tiles. Today, tourism provides an important source of revenue to the UAE economy and it is a major financial centre, an attractive destination for Foreign Direct Investment (FDI) and a major global transport hub via its airports and ports. For the UAE, the possession of a defence industrial capability meets strategic needs, but the high technology implicit in advanced defence, aerospace and space systems also offers economic benefits. Fortunately, the UAE has the resources to invest in defence industrial developments, with the intention of creating and sustaining a world class defence industrial capability.
A number of defence industrial enterprises had previously been created in the UAE, for example in areas such as naval shipbuilding. However, the critical development was the creation of EDGE Group in November 2019. EDGE describes itself as consolidating more than 35 corporate entities into six core clusters: Platforms & Systems, Missiles & Weapons, Space & Cyber Technologies, EDGE Commercial, Technology & Innovation, and Homeland Security. Ships, armoured vehicles, small arms, artillery ammunition, missiles and satellites are all part of EDGE’s capabilities. Extensive R&D investment is available to further develop its capabilities in critical areas. Significantly, EDGE is aggressively looking to attack export markets and are present in Brazil, India, Indonesia and Vietnam amongst others.
EDGE is also signing MoUs with foreign partners in key areas. In November 2025, they signed an MoU with Hanwha Aerospace “to explore strategic defence cooperation across advanced air and missile defence, long-range precision strike, unmanned systems, and defence AI” according to the official statement. They had previously signed an MoU with Korea Aerospace Industries (KAI) to cover possible collaborative efforts. There have also been MoUs signed with Western companies, for example L3Harris, and joint venture activities with major players such as Leonardo. Edge also acquired a majority stake in Estonian unmanned ground vehicle (UGV) manufacturer Milrem in February 2023.
EDGE cannot simply be viewed as a defence industrial operation limited to meeting the needs of the UAE, its home country, as the company has a multinational footprint gained through acquisitions and is looking to further expand its international business. What is noticeable is how quickly EDGE has moved to develop advanced capabilities in such areas as air defence systems and standoff weapons. They appear to develop sophisticated solutions extremely rapidly. It is also worth noting the effort that the UAE is putting into the space sector, since they do not have a satellite launch capability, instead using launch services provided by Russia, Japan and the US. They do however, have the capability to design and build their own satellites – in August 2024, a UAE-built remote sensing/earth imaging satellite was launched by the US.
SAMI in Saudi Arabia and EDGE in the UAE were only established in 2017 and 2019 respectively, and since then both organisations have gained significant momentum. They have redefined the indigenous defence industry in the Arab World and with the financial resources available to them, there is no reason why they should not continue on a growth trajectory.
David Saw
