Future of the Saudi Arabian Defense Industry

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Future of the Saudi Arabian Defense Industry
Bharat Book Bureau
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Summary

• Product SynopsisThis report is the result
  of SDIs extensive market and company research
  covering the Saudi Arabian defense industry, and
  provides detailed analysis of both historic and
  forecast defense industry values including key
  growth stimulators, analysis of the leading
  companies in the industry, and key news. 

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• Introduction and LandscapeWhy was the
  report written?The Future of the Saudi Arabian
  Defense Industry Market Attractiveness,
  Competitive Landscape and Forecasts to 2018
  offers the reader an insight into the market
  opportunities and entry strategies adopted by
  foreign original equipment manufacturers (OEMs)
  to gain market share in the Saudi Arabian defense
  industry.

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• What is the current market landscape and
  what is changing?Saudi Arabia is estimated to
  have the fourth largest defense budget in the
  world, behind the US, China, and Russia. Valued
  at US52.9 billion in 2013, the countrys defense
  expenditure is at the seventh position among the
  top 10 military spenders and is expected to grow
  at a CAGR of 7.92 to reach US77.3 billion by
  2018. Saudi Arabias military expenditure as a
  percentage of GDP will from its current 7.3 to
  9.1 by 2018 due to slowing economic growth over
  the forecast period. An underdeveloped domestic
  defense industry coupled with the countrys high
  spending power presents ample opportunities for
  foreign OEMs to enter the market through an
  alliance route.

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• What are the key drivers behind recent
  market changes?A strained relationship with
  Iran, high spending power, and the need to
  develop a skilled military force to be key
  factors driving defense expenditure. The Saudi
  Arabian governments hopes of strengthening its
  defense infrastructure in order to emerge as the
  most powerful nation in the Middle East have been
  supported by many years of high oil prices and
  strong economic growth.

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• The rivalry between Saudi Arabia and Iran in
  the Middle East is a regional power struggle for
  influence, in which both sides have aimed at
  steering the course of events, shaping
  developments, and influencing decisions in the
  region according to their political preferences
  and interests. The fact that the Saudis average
  defense expenditure as a percentage of GDP during
  the review period measured a significant 7.9
  implies it has the purchasing power to procure
  state of the art defense equipment. In fact the
  country registered a figure of 7.3 with regards
  to its defense expenditure as a percentage of
  GDP, which was the highest among the worlds
  largest military spenders for 2012.

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• What makes this report unique and essential
  to read?The Future of the Saudi Arabian Defense
  Industry Market Attractiveness, Competitive
  Landscape and Forecasts to 2018 provides detailed
  analysis of the current industry size and growth
  expectations from 2014 to 2018, including
  highlights of key growth stimulators. It also
  benchmarks the industry against key global
  markets and provides a detailed understanding of
  emerging opportunities in specific areas. 

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• Key Features and BenefitsThe report
  provides detailed analysis of the current
  industry size and growth expectations from 2014
  to 2018, including highlights of key growth
  stimulators, and also benchmarks the industry
  against key global markets and provides a
  detailed understanding of emerging opportunities
  in specific areas. The report includes trend
  analysis of imports and exports, together with
  their implications and impact on the Saudi
  Arabian defense industry.The report covers five
  forces analysis to identify various power centers
  in the industry and how these are expected to
  develop in the future.

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• The report allows readers to identify
  possible ways to enter the market, together with
  detailed descriptions of how existing companies
  have entered the market, including key contracts,
  alliances, and strategic initiatives.The report
  helps the reader to understand the competitive
  landscape of the defense industry in Saudi
  Arabia. It provides an overview of key defense
  companies, both domestic and foreign, together
  with insights such as key alliances, strategic
  initiatives, and a brief financial analysis. 

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• Key Market IssuesBribery and corruption
  have been prevalent in Saudi defense procurement
  for many years, largely due to the monopolistic
  status exercised by the government over the
  purchase decisions of its armed forces. According
  to Transparency International, Saudi Arabia has
  insufficient safeguards against corruption in the
  defense industry. For example, corruption charges
  were leveled against a unit of EADS UK with
  regards to US3.3 billion communication contract
  and being investigated by the UK Serious Fraud
  Office over bribery allegations in the country.

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• Foreign investors may be deterred from
  entering the Saudi Arabian defense market because
  of scarcity of skilled labor, induced by the lack
  of industrial capabilities within the country.
  Nitaqat law makes it mandatory for the companies
  to have a minimum of 10 local employees and
  scarcity of skilled labor complicates the
  business environment for foreign companies.
  Although the government is focusing on making
  amendments, the non-employment rate has increased
  in recent years resulting in internal conflicts
  adding to the foreign companies woes. 

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Table of Contents

• 1 Introduction1.1. What is this Report
  About?1.2. Definitions1.3. Summary
  Methodology1.4. SDI Terrorism Index1.5. About
  Strategic Defence Intelligence2 Executive
  Summary3 Market Attractiveness and Emerging
  Opportunities3.1. Defense Market Size Historical
  and Forecast3.1.1. Defense expenditure expected
  to grow at a CAGR of 7.92 over the forecast
  period

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