Saudi Arabia’s dilemma: pouring 7% of GDP into oil-funded defense, yet unable to subdue a rebel force for over a decade
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Saudi Arabia has, at times, ranked as the world’s third-largest defense spender (roughly $78 billion a year, over 7% of GDP) — a genuine ‘Middle East military heavyweight.’ And yet it has been stuck for over a decade unable to subdue Yemen’s Houthi rebels. There are three main reasons. First, as an oil-funded welfare state, Saudi Arabia has low enlistment among its own citizens and relies heavily on foreign mercenaries, and long-standing corruption allegations around arms procurement have led to a reputation as a military that doesn’t get its money’s worth. Second, the Houthis control Yemen’s key geographic chokepoint (the Bab-el-Mandeb Strait), letting them wage an ‘asymmetric war’ that threatens Saudi Arabia’s entire oil export route with cheap drones and missiles. Third, even if the Houthis were militarily crushed, there’s no clear answer for who would govern Yemen afterward — so both Saudi Arabia and the US are reluctant to go all-in.
“It has the world’s third-largest defense budget — so why is it struggling against a rebel group?” It’s a natural question every time Saudi Arabia comes up in the news. Here is a country with the Arab world’s largest population and economy, an oil-money nation that snaps up the most advanced American and European weapons — and yet it hasn’t been able to subdue a single rebel organization from a poor neighboring country of 35 million people for over ten years. Once you look into the answer, it becomes clear this isn’t simply a matter of a ‘military power gap.’ Let’s walk through the background, piece by piece.
1. The Saudi Military in Numbers — 3rd in Defense Spending, But What About Troop Numbers?
According to the UK’s International Institute for Strategic Studies (IISS), Saudi Arabia has at times spent $78.4 billion a year on defense, ranking third in the world after the US and China (and ahead of Russia). As of 2023, it still spends 7.5% of GDP on defense — the third-highest ratio in the world, behind only North Korea and Eritrea. Saudi Arabia was also the world’s largest arms importer from 2015 to 2019, with arms imports over that period reaching $17.7 billion (12% of global arms imports), sourced mostly from the US (73%) and the UK (13%). And yet its actual troop numbers aren’t large. The Saudi army’s standing force is only around 75,000 troops — far smaller than Iran’s, which runs an 18-month conscription system and fields a standing army of 350,000 plus 350,000 reserves.
2. A “Mercenary-Dependent Military” — the Dilemma of an Oil-Funded Welfare State
A structural weakness often cited about the Saudi military is its ‘low citizen enlistment rate.’ The analysis: for citizens of an oil-funded welfare state with no income tax and free housing and cars, there’s little economic incentive to join the military. As a result, Saudi Arabia and many other Gulf oil states have relied on hiring foreign nationals — from Pakistan, Colombia, and elsewhere — as mercenaries to fill the gap, reportedly widening recruitment to African nationals since the Yemen war began. Even during the Gulf War, a significant portion of Saudi Arabia’s combat troops were reportedly foreign mercenaries with combat experience from the India-Pakistan conflicts.
3. The Al Yamamah Scandal — Allegations of Leaking Defense Funds
There have long been allegations that Saudi Arabia’s enormous defense budget hasn’t fully translated into military strength. The signature case is the ‘Al Yamamah’ arms deal between the UK’s BAE Systems and the Saudi government. Signed in 1985, the deal reportedly earned BAE Systems at least £4.3 billion in revenue between 1985 and 2007 (according to international corruption-tracking sources), and is considered the largest arms deal in British history — one that has faced persistent allegations of kickbacks and bribery. There are also claims that the unit prices for Tornado fighter jets and other equipment procured under the deal were excessively inflated. This kind of pattern, repeated over the years, has fed into an assessment that Saudi Arabia pours in enormous budgets without seeing a commensurate boost in real military capability.
4. 2015: A Young Crown Prince’s Decision — the Seven-Year Quagmire of “Operation Decisive Storm”
After Houthi rebels seized Yemen’s capital Sana’a and ousted the Hadi government in 2014, then-29-year-old Defense Minister Mohammed bin Salman (MBS) launched “Operation Decisive Storm” in March 2015, plunging Saudi Arabia fully into Yemen’s civil war. He expected a swift victory led by overwhelming air power, but the war didn’t go as planned. After seven years of attrition, in 2022 — by then effectively Saudi Arabia’s head of state — bin Salman agreed to a ceasefire with the Houthis and pulled out. Ahmed Nagi, a researcher at the Carnegie Endowment for International Peace, assessed that the intervention instead “fueled anti-Saudi sentiment and further strengthened ties between the Houthis and Iran” — a paradoxical outcome in which military intervention, rather than weakening the rebels, only cemented their bond with Iran.
5. Who Are the Houthis? — From Rebels to a “De Facto Government”
The Houthis are an armed political movement that emerged from the Zaidi Shia revivalist movement in Yemen. A 2024 UN panel of experts report estimated Houthi forces at around 350,000, though some assessments suggest 70-80% of Yemen’s entire population effectively falls under Houthi influence. For the Houthis, there is reportedly considerable resentment tied to their history: they nearly became Yemen’s government after seizing the capital in 2014, only to be reduced back to “rebel” status the following year when the Saudi-led coalition intervened. Given this background, analysts say the current escalation isn’t simply provocation for the Houthis — it’s an extension of their long-standing goal of proving to the world that they are Yemen’s legitimate governing power.
6. “Weaponizing Geography” — How Cheap Drones Neutralize Expensive Weapons
The most fundamental reason experts point to is the “weaponization of geography.” Yemen straddles the Bab-el-Mandeb Strait, the passage linking the Red Sea and the Indian Ocean. By seizing chokepoints near this strait (the port of Mokha, Perim Island, and others), the Houthis can threaten Saudi Arabia’s entire oil export route without any sophisticated military operation. Reuters has noted that Saudi Arabia’s overwhelming firepower has failed to fully eliminate the Houthis’ attack capability, and that the more it expands retaliation, the more it risks its own oil facilities and export routes — a genuine dilemma. This mirrors the difficulty the US has responding to Iran’s Revolutionary Guard small boats or cheap drones with expensive weapons systems. At the core of it is a “cost asymmetry”: a single precision-guided interceptor missile can cost tens to hundreds of times more than the drone it’s shooting down.
7. Even If the Houthis Were Eliminated — the Bigger Problem of a Governance Vacuum
The Guardian has pointed out that even if Saudi Arabia were to militarily crush the Houthis, who would govern and provide security in Yemen afterward is an entirely separate, larger challenge. Even the internationally recognized Yemeni government camp that Saudi Arabia has supported is split into multiple political and regional factions (remnants of the Hadi government, the Southern Transitional Council, and others), with serious internal rifts. In 2018, southern separatist forces backed by the UAE — a fellow member of the same coalition — even drove the Hadi government out of Aden. In other words, there’s no guarantee that removing the common enemy of the Houthis would bring immediate stability to Yemen.
8. Why Even the US Is Stepping Back
What may sting even more for Saudi Arabia is that even its closest ally, the US, is reluctant to open a new front this time. Following its experience with the failed 2015 intervention, Saudi Arabia itself is wary of unilateral military action, and observers note the US, too, is reluctant to open a separate front against the Houthis. For a country that has invested so heavily in its relationship with the US, the disappointment is bound to run deep. Crown Prince Mohammed bin Salman personally asked President Trump for military intervention twice, only to be turned down, with the US offering intelligence and targeting data instead — a result widely seen as stemming from this same context.
📝 Good to Know
- Claims about corruption and mercenary dependence in the Saudi military are based on numerous foreign media reports, expert analyses, and international corruption-tracking sources — they are not officially acknowledged by the Saudi government.
- The Houthi-Saudi conflict has strong characteristics of a long-running regional power struggle (proxy war) between Shia Iran and Sunni Saudi Arabia, so it’s difficult to draw conclusions from either side’s claims alone.
- Since this dynamic is directly tied to global oil prices, when making related investment decisions it’s more useful to track concrete indicators — such as whether oil shipping routes are actually blocked — than to weigh military superiority.
In short, Saudi Arabia’s struggles against the Houthis aren’t simply a matter of ‘insufficient military power.’ They stem from a combination of a mercenary-dependent military structure, chronic inefficiency in arms procurement, and above all, the nature of asymmetric warfare in which Yemen’s very geography becomes a weapon. Add to that the fundamental dilemma that eliminating the Houthis would leave a governance vacuum, plus a mood in which even the US is pulling back — and Saudi Arabia, despite its overwhelming defense budget, still hasn’t found a clear solution.
🔗 Sources
- Jayu Ilbo — “Why Does Saudi Arabia Struggle Against the Houthis… the ‘Weaponization of Geography’ That Military Superiority Can’t Solve” (jayupress.com)
- Asia Economy — “[The World in Weapons] Saudi Arabia Has the World’s 3rd-Largest Defense Budget — Why Is Its Military Called a Rabble?” (asiae.co.kr)
- Seoul Economic Daily — “Eleven Years After the Yemen War Boomerang, Even Trump Turns Away… Saudi Arabia Surrounded on All Sides” (sedaily.com)
- Seoul Shinmun — “Saudi Arabia, Battered by Iran and the Houthis… Why the ‘Middle East Power’ the US Relied on Is Cornered” (seoul.co.kr)
- Segye Ilbo — “Under Assault From the ‘Shia Belt’… Saudi Arabia’s Oil Routes Blocked, Worst Security Crisis on Record” (segye.com)
- Daum News (citing the Agency for Defense Development Program) — “Global Defense Spending Hits $1.917 Trillion… US, China, India, Russia, Saudi Arabia Top the List” (v.daum.net)