Last month, the kingdom introduced austerity measures to cope with the global economic downturn caused by the coronavirus and reeling oil prices. The measures included tripling the VAT, suspending cost of living allowances for state employees, and other “painful but necessary” moves to preserve financial and economic stability.
One article of spending in Saudi Arabia’s budget hasn’t suffered much as a result of the recent global economic calamity – defence spending.
In fact, according to Western defence contractors speaking to the Financial Times, business is booming.
In mid-May, two days after the kingdom introduced the austerity-related cuts to fill the $9 billion hole in its budget, Boeing was awarded a $2.6 billion contract for the purchase of over 1,000 new surface-to-air and anti-ship missiles.
Lockheed Martin Middle East division chief Robert Harward said that none of the company’s regional clients had “backed off” on defense spending in recent weeks, noting that expects Riyadh and others to “continue with their procurement” because “regional threats are not receding and are more unpredictable than ever.”
According to the Stockholm International Peace Research Institute, Saudi Arabia spent some $61.9 billion on defence, or 8 percent of its GDP, in 2019, placing it fifth behind the US, China, India and Russia among the world’s top spenders. Unlike these other countries, the kingdom depends on foreign imports for the vast majority of its arms purchases, with the US and the UK providing for most of its needs.
Riyadh is thought to have spent tens of billions of dollars on the war in Yemen, where it has been trying to restore ousted Yemeni president Abdrabbuh Mansur Hadi to power since 2015. Hadi fled to Saudi Arabia in 2014 after the Houthi militia group took control of Sanaa and spread across much of the country.
Saudi Arabia and a coalition of mostly Gulf state allies began a campaign in Yemen in March 2015 with US and UK logistical support, but the alliance has so far proven unable to dislodge the Houthis. Additionally, Saudi air defences have had to deal with Houthi missile and drone attacks on cities, military bases, airports, and other infrastructure in Saudi Arabia itself. Last year, the group launched a massed drone attack on a pair of Saudi oil refineries, temporarily knocking out about half of the kingdom’s oil output.
Sourse: sputniknews.com
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