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$110 billion arms deal then US asks Saudi 4 Yemen ceasefire

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$110 billion arms deal then US asks Saudi 4 Yemen ceasefire

PostAuthor: Anthea » Tue Oct 30, 2018 11:05 am

Defense firms see only hundreds of new U.S. jobs from Saudi mega deal

Every time President Donald Trump mentions the $110 billion arms deal he negotiated with Saudi Arabia last year, he quickly follows up, saying “It’s 500,000 jobs.”

But if he means new U.S. defense jobs, an internal document seen by Reuters from Lockheed Martin forecasts fewer than 1,000 positions would be created by the defense contractor, which could potentially deliver around $28 billion of goods in the deal.

Lockheed instead predicts the deal could create nearly 10,000 new jobs in Saudi Arabia, while keeping up to 18,000 existing U.S. workers busy if the whole package comes together - an outcome experts say is unlikely.

A person familiar with Raytheon’s planning said if the Saudi order were executed it could help to sustain about 10,000 U.S. jobs, but the number of new jobs created would be a small percentage of that figure.

Lockheed Martin Corp declined to comment on the Saudi package. Raytheon Co’s Chief Financial Officer Toby O’Brien said last week that hiring overall is growing, but he did not pin it to any particular program.

The White House did not immediately respond to a request for comment.

Jobs are important to Trump. He campaigned on his ability to create American jobs, especially high-paying manufacturing ones. Meanwhile he has limited his criticism of Saudi leadership over the killing of a prominent critic because he did not want to endanger the massive arms deal.

Trump’s 500,000 figure has been greeted with widespread skepticism given the five biggest U.S. defense contractors, who make nearly every item on the Saudi list, now employ 383,000 people.

Documents seen by Reuters and interviews with defense industry sources familiar with the arms package suggest that between 20,000 and 40,000 current U.S. defense industry workers could be involved in Saudi-bound production if the whole $110 billion package goes through.

Existing workers typically are experienced, skilled, who can be redeployed more easily than new hires who would require significant upfront investment in their training.

One significant caveat to any predictions on job creation is whether all of the missile defenses and radars, ships, tanks, software, bombs and other equipment listed in the full Saudi package get delivered.

SAUDI ARABIA JOBS

Interviews with people familiar with other major defense contractors’ plans and estimates reflect similar dynamic as Lockheed’s and Raytheon’s plans - relatively minor additions to their U.S. workforce and more significant build-up in Saudi Arabia.

Since Trump’s trip to the Kingdom last year, little economic activity has taken place beyond Lockheed’s work on four frigates the Saudis have ordered.

The order will yield nearly 10,000 jobs in the Saudi ports for maintenance workers, but only 500 new U.S. jobs will be created, according to documents seen by Reuters.

Executives at the several of top U.S. defense companies say Riyadh had wanted much of the military equipment as a way to both develop new domestic industry and to create new jobs and local expertise as a part of Crown Prince Mohammed bin Salman’s Vision 2030 initiative to wean the country off oil dependency.

Saudi Arabia has set a goal of creating 40,000 defense industry jobs by 2030.

The arms package Trump announced in May 2017 came under renewed scrutiny after the Oct. 2 killing of Washington Post columnist Jamal Khashoggi in the Saudi consulate in Istanbul. The killing provoked international outrage and both the administration and defense contractors have been working to prevent a backlash that could imperil what Trump has called a “tremendous order” and 500,000 jobs.

Industry executives have argued that without the Saudi package coming through they would have fewer orders to fill, but robust U.S. defense budgets, which account for the majority of their sales, coupled with a record backlog of orders suggest little risk that workers would face layoffs if the Saudi sales package failed to materialize.

Certainly for each defense manufacturing job, other adjacent jobs are supported indirectly by higher demand for defense products.

But Heidi Garrett-Peltier, a research fellow at the Political Economy Research Institute, estimated that for this type of industry the highest multiplier would be just below 3.2. Given that, 20,000 to 40,000 sustained or new jobs could generate between about 64,000 to 128,000 jobs in related industries, Reuters calculations show, bringing the total of sustained and new jobs to between 84,000 and 168,000.

In short, 500,000 jobs Trump keeps bringing up is at least three to five times higher than what one could expect from the Saudi deal, given the estimates from the companies themselves, plus the most generous use of the indirect multiplier.

By its own math, the U.S. State Department said in May 2017 that the Saudi deal could support “tens of thousands of new jobs in the United States.”

https://www.reuters.com/article/us-saud ... SKCN1N40DM
Last edited by Anthea on Thu Nov 01, 2018 11:09 pm, edited 1 time in total.
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$110 billion arms deal then US asks Saudi 4 Yemen ceasefire

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Re: $110 billion arms deal with Saudi Arabia

PostAuthor: Anthea » Thu Nov 01, 2018 11:05 pm

Yemen war: US presses Saudi Arabia to agree ceasefire

The US has called for a swift cessation of hostilities in Yemen, where three years of civil war have caused the world's worst humanitarian crisis.

Defence Secretary James Mattis said all parties needed to take part in UN-led peace talks within the next 30 days.

Secretary of State Mike Pompeo meanwhile urged the Saudi-led coalition battling the rebel Houthi movement to end its air strikes on populated areas.

The US has faced growing pressure to end its support for the coalition.

UN human rights experts say coalition forces may have committed war crimes in Yemen and humanitarian organisations say their partial blockade of the country has helped push 14 million people to the brink of famine.

The murder of the US-based journalist Jamal Khashoggi by Saudi agents in Istanbul this month has also strained ties between Washington and Riyadh.

It did not strain ties enough to prevent the US from doing the $110 billion arms deal with Saudi - all that money floating around it would be much better to spend money on helping the starving people in Yemen and ending the fighting

Why is there a war in Yemen?

Yemen has been devastated by a conflict that escalated in early 2015, when the Houthis seized control of much of the west of the country and forced President Abdrabbuh Mansour Hadi to flee abroad.

Alarmed by the rise of a group they saw as an Iranian proxy, the UAE, Saudi Arabia and seven other Arab states intervened in an attempt to restore the government. They have received logistical and intelligence support from the US, UK and France.

At least 6,660 civilians have been killed and 10,560 injured in the fighting, according to the United Nations. Thousands more civilians have died from preventable causes, including malnutrition, disease and poor health.

What did the US officials say?

Speaking at the US Institute of Peace in Washington on Tuesday, Mr Mattis said the US had been watching the conflict "for long enough".

"We have got to move towards a peace effort here, and we can't say we are going to do it sometime in the future. We need to be doing this in the next 30 days," he said.

Mr Mattis added that all sides were being urged to meet UN special envoy Martin Griffiths in Sweden in November and "come to a solution".

In a separate statement, Mr Pompeo called on the Houthis to end missile and drone strikes on Saudi Arabia and the UAE, and on the coalition to subsequently cease air strikes on all populated areas in Yemen.

"It is time to end this conflict, replace conflict with compromise, and allow the Yemeni people to heal through peace and reconstruction," he added.

The Trump administration has previously backed Mr Griffiths' mediation efforts and called for a settlement in keeping with UN Security Council 2216, which demands that the Houthis withdraw from all areas they have seized and relinquish their heavy weapons. The Houthis have rejected those demands.

Link to Full Article:

https://www.bbc.co.uk/news/world-middle-east-46040789
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User avatar
Anthea
Shaswar
Shaswar
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Nationality: Kurd by heart


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