If there is one overriding realisation to have come from the visit of the Crown Prince Mohammed bin Salam to the UK during this week it is surely that Saudi Arabia is changing very fast. The huge desert kingdom which also happens to be the fifth largest state in Asia, the second largest in the Arab world and that has a population estimated to be 32 million people, Saudi Arabia is not only one of our most important international allies that the UK has it is also one that is under the energetic, young Crown Prince and who has already demonstrated remarkable leadership qualities and intent to bring about change, is fast tracking through what are perhaps the most transformational social and economic reforms to have taken place in any Arab state.
The strong relationship between Saudi Arabia and the United Kingdom has endured now through seven decades and this week has, if you like, witnessed a renewing of vows. With the Crown prince seeking to bring about substantial social change and to move the economy away from the long dependence on oil as being the primary strength, Prince Mohammed has during his three day visit met with Her Majesty the Queen, HRH Prince Charles and HRH Prince William, Prime Minister Theresa May plus senior members of the Cabinet, and seniors in industry and other whose expertise Saudi Arabia needs to assist in achieving the aims of its national economic and social strategy.
Those aims are encapsulated in what the Crown Prince has called ‘Vision 2030’. This is the blueprint for change in Kingdom and it is more than being simply about an aspiration for change. Vision 2030 is the driving force for modernisation and economic and social change. It is forward thinking and innovative and includes within it huge infrastructure development plans and in-country investment intended to provide skills, jobs and future opportunities. Moreover it is intended to reduce the economic dependence of Saudi Arabia on oil.
The visit to the UK this week by Crown Prince Mohammed together with the signing of what is envisaged to be ambitions worth £65 billion in respect of mutual trade benefits and investment opportunities confirms that Saudi Arabia wants and needs the UK to play a large part in the economic and other aspirations for change that the Crown Prince has.
Vision 2030 is not just about the compelling vision of change that Saudi Arabia has now embarked upon under the leadership and direction of the Crown Prince, it is also one that provides the UK with a unique opportunity to play a very major part.
This has in my view been a highly successful first official visit by Crown Prince Mohammed to the UK and I believe that as a result our relationship with the Kingdom of Saudi Arabia, one that is hugely important to us not only with regard to existing trade but also in respect of the binding relationship that, as allies, we have in respect of mutual security, regional diplomacy and the fight against terrorism and extremism, has been greatly strengthened as a result.
The UK must and will I am sure embrace the opportunities provided through the signing of such a large and important mutual trade and investment opportunity just as it will support the ambitions of Vision 2030 as a whole. To do this will assist Saudi Arabia achieving its objectives in healthcare, education, security, defence and in providing greater self-reliance in manufacturing and production of more of what the nation needs and that will reduce the overall reliance on oil.
The Mutual Trade agreement is what it suggests, one that seeks mutual investment in and by both nations just as it does in respect of procurement by the Saudi’s of goods and equipment from UK companies to be spread over the next ten years. Knowing Saudi Arabia well and having been there many times, I firmly believe that this is a landmark opportunity for the UK and one that if we embrace it, will secure and create many thousands of skilled jobs both here and in the Kingdom of Saudi Arabia.
A significant example of the aims came within a separate announcement yesterday that a Memorandum of Intent had been signed by the Kingdom of Saudi Arabia and the UK Government in which both nations aim to finalise discussions for the purchase of 48 Typhoon Aircraft from BAE Systems. This is excellent news for UK jobs just as it is for those across the whole Eurofighter Typhoon partnership including Airbus and Leonardo who with BAE Systems comprise the Eurofighter Typhoon manufacturing partnership. It is good news too for companies such as Rolls-Royce, MBDA, Martin-Baker, Ultra Electronics, Cobham plus others and in the wake of the Governments Combat Air Strategy review, I believe that it will assist in ensuring that for the next few years we retain sufficient levels of skills required to build sophisticated combat air capability.
Maintaining engineering and technical skills, employment of highly skilled personnel and maintaining continuity of training for the future in the aerospace and defence domain is vital not just as we go through the difficult Brexit process but also to the central government mission of rebalancing the British economy by increasing levels of manufacturing. It is important to remember that the UK military aerospace sector represents some 70% of all UK defence exports and that these exports are worth a minimum of £4.5 billion to the economy each year. Typhoon production by BAE Systems supports in excess of 5,000 people covering production and support with another 9,600 jobs across the wider UK supply chain. Including the vast number of indirect employment built around Typhoon and the figure is much higher.
At a time when we are all concerned over the implications of Brexit and future employment awards such as this and the other recent Typhoon wins in Qatar will help drive the ongoing commitment of BAE Systems and other UK companies involved to the training and developing of its young people. Worth noting here that at any one time BAE Systems has at least 1,000 apprentices and around 500 graduate trainees employed and also that the company sustains a supply chain made up of many small and medium-sized enterprises. With main plants at Warton and Samlesbury in Lancashire, this includes 1,200 suppliers in the north-west of England alone.
As I have seen for myself on the various visits that I have made to the Kingdom over the years, BAE Systems is well established in Saudi Arabia with over 5,800 employees working directly in-country and of which 68% are Saudi nationals. Working together with local partners to develop national engineering, manufacturing and support of innovations that can help sustain economic growth as well as increasing the amount of available defence sovereignty and safeguarding of commercial interests, BAE Systems is regarded as being exactly the sort of company that Saudi Arabia wants to see investing in-country.
Over the years that it has been in the Kingdom of Saudi Arabia, BAE Systems has established a comprehensive range of systems intended to support the transfer of knowledge and technology in order to support longer term development of its Saudi employees. It has also contributed to the training of thousands of Saudi nationals in the highly skilled fields of engineering and technology. Quite apart from Typhoon being the most advanced swing-role combat aircraft currently available on the global market and one that remains the backbone of European air defence and that of an increasing number of Gulf region states including Saudi Arabia, Oman and soon Kuwait and Qatar as well, this is one of the many other reason why BAE Systems is so well liked in Kingdom and the same is true of the very strong relationship that has endured between the Royal Saudi Air Force and the Royal Air Force.
Responding to the Memorandum of Intent announcement yesterday afternoon, BAE Systems CEO, Charles Woodburn said “Today’s news is a positive step towards agreeing a contract for our valued partner, the Kingdom of Saudi Arabia. We are committed to supporting the Kingdom as it modernises the Saudi Armed Forces and develops key industrial capabilities critical to the delivery of Vision 2030.”
With a record of defence export achievement stretching back to 1966 the MOI signed yesterday for the supply of an additional 48 Typhoon jets that will add to the 72 that the Kingdom has already received is truly excellent news. So too are the ambitions now set within the £68 billion mutual trade and investment opportunities agreement. The Saudi Crown Prince has this week provided the UK with a unique opportunity to embrace a partnership intended to deliver huge potential trade and economic development benefits for both nations. The UK now has been given the first opportunity by the new Crown Prince to embrace Vision 2030 and it must lose no opportunity to do just that.
CHW (London – 10th March 2018)
Howard Wheeldon FRAeS
Wheeldon Strategic Advisory Ltd,
M: +44 7710 779785