Riyadh launches Saudi Arabian Military Industries … SAMI to localise 50 percent of military spend
U.S. STICKS TO IRAN N-DEAL … SANCTIONS BALLISTICS
RIYADH, May 18, (Agencies): Saudi Arabia, one of the world’s biggest defence spenders, on Thursday said it is creating a new military industries firm as part of efforts to boost the kingdom’s defence production. The government-owned company, Saudi Arabian Military Industries (SAMI), “aims to become one of the world’s top 25 defence companies by 2030,” a statement from the Public Investment Fund (PIF) said, two days before the arrival of US President Donald Trump for a series of summits. American defence contractors are major suppliers of weapons to Saudi Arabia, which for more than two years has led a coalition conducting air strikes and other operations against rebels in Yemen. SAMI will be both a manufacturer and service provider, PIF said.
This will include maintenance and repair of fixed-wing aircraft, production of drones, and military vehicle repair and manufacture. The company will also be involved with weapons and missiles, plus radars and other defence electronics. It will contribute about $3.7 billion to the kingdom’s gross domestic product and invest more than $1.6 billion in research and development by 2030, creating more than 40,000 jobs, PIF said. Saudi Arabia’s government says only about two percent of its security and defence spending is local, but that is targeted to reach 50 percent by 2030.
The Stockholm International Peace Research Institute (SIPRI) said in an April report that Saudi Arabia last year was the world’s fourth-largest military spender, at $63.7 billion. “SAMI will establish companies through joint ventures with global original equipment manufacturers, as well as cooperating with local military companies,” the PIF said.
Among those local firms is Military Industries Corporation, a separate entity whose governor told AFP in December that it would take “a few years” to cut the reliance on foreign arms. The kingdom has already begun developing spare parts, armoured vehicles and ammunition. Boosting local defence manufacturing is part of the Vision 2030 project to wean Saudi Arabia off oil revenue by expanding the industrial, business and investment base. As part of the plan, the PIF aims to become the largest sovereign wealth fund in the world.
The Trump administration took a key step Wednesday toward preserving the Obama-era nuclear deal with Iran, coupling the move with fresh ballistic missile sanctions to show it isn’t going light on the Islamic republic. The State Department said Iran would continue to enjoy relief from decades-old economic measures punishing Tehran for its nuclear program.
Under the 2015 nuclear agreement, the US lifted those sanctions. But Washington must issue periodical waivers to keep the penalties from snapping back into place and the most recent one was set to expire this week. Donald Trump as a candidate vowed to renegotiate or tear up the nuclear deal. As president, he has altered his position, insisting he is still studying the accord and hasn’t made a final decision.
The move to extend the sanctions relief in the meantime was another indication Trump may be laying the groundwork to let the deal stand. Still, the US paired the announcement with new, unrelated sanctions that go after Iran for a ballistic missiles program that Washington fears could target American interests in the Middle East or key allies such as Israel and Saudi Arabia.
Wednesday’s sanctions target Iranian military officials along with an Iranian company and China-based network accused of supplying Iran with materials for ballistic missiles, the State Department said. The dual moves — ensuring old sanctions on Iran don’t return while imposing new ones — appeared aimed at undercutting the impression that Trump’s stance on Iran has softened.
Since taking office, Trump’s administration has sanctioned hundreds in Iran and in Syria — an Iranian ally — as part of a campaign to increase pressure on Iran even as it reviews the nuclear deal. Stuart Jones, the top US diplomat in charge of the Middle East, said the US is still forming a “comprehensive Iran policy” that addresses Iran’s support for Syrian President Bashar Assad’s government and militant groups in Lebanon, Iraq and Yemen.
“This ongoing review does not diminish the United States’ resolve to continue countering Iran’s destabilizing activity in the region, whether it be supporting the Assad regime, backing terrorist organizations like Hezbollah, or supporting violent militias that undermine governments in Iraq and Yemen,” Jones said. “And above all, the United States will never allow the regime in Iran to acquire nuclear weapons.”
In a similar move last month, Trump’s administration certified to Congress that Iran is complying with the terms of the deal — a requirement for Iran to keep receiving the economic benefits of the deal. At the same time, Trump dispatched Secretary of State Rex Tillerson to issue a scathing critique of Iran in which he also cast doubt that the nuclear deal would achieve its objective of keeping Tehran from developing nuclear weapons.
Trump also announced late Wednesday that the US didn’t intend to limit Iran’s ability to sell oil. In a memo to Tillerson and the secretaries of Energy and Treasury, Trump said there’s enough oil being produced currently by other countries that Iran’s output could be reduced without hurting global supplies. But he said that given US commitments under the nuclear deal, “the United States is not pursuing efforts to reduce Iran’s sales of crude oil at this time.” “I will continue to monitor this situation closely,” Trump added. The moves come as Iran prepares for a presidential vote on Friday whose outcome has major implications for Iran’s future stance toward the US and its likelihood of sticking with the deal. President Hassan Rouhani, a moderate who oversaw the clinching of the nuclear deal, faces challenges from hard-liners who have stridently criticized the deal. The new sanctions announced Wednesday hit Morteza Farasatpour, a top Iranian defense official who oversaw the sale of explosives and other materials used by Syria’s Scientific Studies and Research Center, the Treasury Department said. The Syrian agency produces non-conventional weapons such as the chemical weapons that Assad’s forces used earlier this year.
The US also punished another Iranian official it said has been involved in Iran’s ballistic missile program, as well as Matin Sanat Nik Andishan, a company based in Iran that the US said helped obtain materials for the ballistic missile program. The sanctions also target a series of Chinese companies associated with Ruan Runling, a Chinese citizen.
The US said his network helped produce electronics such as missile guidance for Iran’s program. Mark Dubowitz, an Iran expert and head of the Washington-based Foundation for Defense of Democracies, which advocates for a tough US position on Iran, said the latest steps were part of a “much more comprehensive strategy to use all instruments of American power to roll back Iranian regional aggression” and to “rectify what the administration sees as a deeply flawed nuclear deal.” Also on Wednesday, Iranian state media said four passenger airplanes were being delivered as the first installment of a deal with French-Italian manufacturer ATR that was finalized after the nuclear agreement.
Iran is buying 20 of the ATR 72-600 planes. It also has clinched bigger deals with trans-Atlantic rivals Airbus and Boeing. Under the 2015 deal, the US and other world powers eased sanctions after the UN’s International Atomic Energy Agency confirmed that Iran had taken a series of steps to pull its nuclear program back from the brink of weapons capability. The US decision to stick by the nuclear deal with Iran, despite new sanctions on its missile programme, provided welcome news for President Hassan Rouhani on Thursday, a day before his bid for re-election. The administration of US President Donald Trump chose to continue waiving nuclear-related sanctions on Wednesday despite its criticism of the agreement.
That was a relief to Rouhani, who made the 2015 nuclear deal the centrepiece of his efforts to end Iran’s isolation and rebuild its economy with foreign investment. He faces a tough battle for re-election on Friday against hardline cleric Ebrahim Raisi, who has called for a much tougher stance against the West and says the nuclear deal has not improved the lives of the poor. Meanwhile, China lodged an official protest with the United States on Thursday over new US sanctions on Iran that target a Chinese business tied to Tehran’s ballistic missile programme. “The Chinese side is always opposed to unilateral sanctions, to the frequent implementation of unilateral sanctions, especially when it hurts interests of third parties,” foreign ministry spokeswoman Hua Chunying said. “We think (this kind of sanctions) are unhelpful in enhancing mutual trust and unhelpful to the international efforts to solve this issue,”