“I think as an investor I would want to make sure that I’m investing in a country where my corporate investment, my business is protected through some type of rule of law…I don’t think that’s there.”~Former U.S. Ambassador to Saudi Arabia during the Obama-Biden administration, Joseph Westphal on CNBC’s “Squawk Box”
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Saudi 2030 Vision
Crown Prince Muhammed bin Salman (MBS) ordered 11 Saudi princes to be arrested for charges of corruption while freezing 1,700 of their bank accounts. This happened days after U.S.. Special Middle East Envoy, and POTUS 45’s son-in-law, Jared Kushner, made a third announced visit to Saudi Arabia. Consequently, we had to hear a series of justifications from an acquaintance who used to live in Saudi Arabia to explain why Saudi Arabia’s upheaval towards reform. Our acquaintance–as well as a series of Anglo men, based in the United States, argued that–rightly or wrongly–these political moves may help Saudi Arabia achieve a stronger, healthier business environment and remove bureaucratic hurdles to implement the Saudi 2030 Vision. Saudi Economic & Planning Minister, Prince Adel Faqi, is the visionary behind 2030 Plan. MBS’s purge resulted in Faqi’s removal too. Their “Game of Thrones” conjectures emphasized the drama behind two unexplained deaths of princes.
We tried rebutting the argument that clampdown on corruption necessitated a purge. In fact, the irony in instigating a reform included more autocratic measures implemented by one-single authority: the Crown Prince. This almost reminded us of Egypt’s General Al-Sisi deposing the elected president, Muhammad Morsi, to help restore “rule of law” and stability. (Yes, the terms “rule of law” and “corruption” are now part of authoritarian leaders’ vocabulary as a means of consolidating power.) Does MBS possess the political clout to carry out the 2030 economic plans internally? Has his power consolidation left him fewer stakeholders to successfully implement reforms?
Factor? ARAMCO’S Initial Public Offering
For 2018, Saudi Arabian Oil Company, Saudi Aramco, is considering selling 5% of its company to non Saudi investors –a landmark business move on the heels of the landmark political move that just transpired this past weekend. According to Fortune magazine: Saudi Arabia claims that it has oil reserves in the range of “13 times as large as the oil reserves of Exxon Mobil, the biggest independent oil company in the world”. Moreover, in October, Saudi Arabia hosted a Future Investment Initiative conference that drew financial sector bigwigs to Riyadh.
- Did the planned Initial Public Offering (IPO) influence the sudden fight against corruption?
- Where will the confluence of business interests draw a line in the sand?
- Will Saudi political culture continue to begin and end with the Crown Prince?
Under the authority of his father King Salman, the young prince, Muhammed bin Salman (MBS) assumed leadership roles, including. Meanwhile, Lebanon’s Prime Minister, Saad Hariri, suddenly resigned after a visit to Riyadh. He announced his resignation over Arabiya, the Saudi-owned media channel.
Saudi Ouster Appeases Investor?
Was the Saudi ouster a genuine attempt at improving the investment environment by cracking down on corruption? Just because the Kingdom has seen a purge of high officials does not mean that the culture of corruption has been been purged.
As Saudi journalist, Jamal Khasoggi commented on MBS’s “small motion for reform” in a Wilson Center forum, we are seeing a shift from ‘fanatic extremism’ to fanatic fascism’. Khashoggi stated that he received a text message by Prince Al Waleed, who is the wealthiest among Saudi business community and ‘liberal-ish’ –if not the most liberal among princes, who funded Georgetown University’s Center for Muslim-Christian Understanding. In fact, Al-Waleed was supportive of MSB. But he is rumored to have refused investing in a particular project, which may have led to his house arrest for alleged corruption charges.
As a result, any investor would need to exercise caution in private sector.
- Do not forget the current Saudi crisis with Qatar.
- Prince Adel Jubeir continues to serve as the senior most foreign policy official in the Kingdom. Both he and MBS may both be paralyzed by paranoia of political islam.
Prince Adel Jubeir continues to serve as the senior most foreign policy official in the Kingdom. Both he and MBS may both be paralyzed by paranoia of political islam.