It’s a blow, analysts say, to efforts by Crown Prince Mohammed bin Salman to convince the world that the country is a reputable place to strike the deals needed the to power a wide-ranging transformation of the economy.
As allegations emerge that Jamal Khashoggi was gruesomely murdered, political pressure to isolate
Here is a look at the Saudi leader’s economic plans and what is at stake if business leaders begin to shun the country.
Q: Why does Prince Mohammed need foreign investors?
A: The crown prince wants to diversify the economy away from oil and transform its business and political model. For years, oil revenues paid for plenty of government sector jobs and benefits. That model has come under strain amid a growing population and a period of low oil prices.
The prince‘s Vision 2030 strategy foresees the creation of a vibrant private sector. As part of that, he wants to develop new industries like alternative energy, tourism and entertainment. Projects include a new business zone near the
“Foreign investment is a main pillar of Vision 2030,” said Sebastian Sons, an expert on
Q: How would the Khashoggi disappearance affect that?
A: Foreign investors already had doubts about the country amid regional conflicts like a blockade of neighbor
The Kashoggi scandal comes at a time when “the private sector is cowed and hurting in many ways,” said David Butter, an analyst with the
The hotel incident shows that “they don’t know if their assets are safe from sequestration.” And grisly details reported in news media about Khashoggi’s alleged killing “are just going to make the private sector even more worried,” he said.
The war in
Turkish authorities say Khashoggi was killed. The Saudis have denied involvement.
Q: Are people losing faith in
A: Foreign business and political leaders are dropping out of next week’s Future Investment Initiative, an annual event started last year to showcase the country as a place to do business. Among those cancelling are
Sons of the German Council on Foreign Relations, said the no-shows “are a serious indicator for Mohammed Bin Salman that he is losing trust, that
Q: Why are the Saudis investing abroad as well?
A: They’ve been buying stakes mainly in technology firms to diversify their revenue and show the country as forward-looking and tech-friendly place.
The sovereign fund has invested $3.5 billion in
The question now is, whether companies will be leery of Saudi money for fear it will taint their reputations. Richard Branson, the billionaire founder of Virgin Group, has said he is freezing talks for Saudi investment in his space companies. Other executives have limited themselves to the symbolic rebuke of shunning next week’s Saudi conference. Others have simply kept quiet.
Q: How likely are sanctions against
A: Republican Senators Marco Rubio and Lindsey Graham called for
The 2016 Global Magnitsky Act makes it possible to impose visa bans barring entry into the
Analyst Butter at the Royal Institute said the prospect of sanctions was unclear but that “any kind of sanctions would have a strong symbolic effect.”
President Donald Trump has promised “severe punishment” if regime involvement is proved, but has also said he does not want to cost