Saudi crown prince's public defiance masks crumbling investor confidence

Saudi crown prince's public defiance masks crumbling investor confidence
After the Khashoggi affair, Crown Prince Mohammed bin Salman's image as a reforming moderniser may be damaged beyond repair.
3 min read
25 October, 2018
Prince Mohammad bin Salman's reformer image has been further tarnished [Getty]
A defiant message delivered by Saudi Arabia's crown prince to investors gathered in Riyadh may not be enough to repair the damage inflicted to his global standing as he faces continued international pressure over the killing of Saudi journalist Jamal Khashoggi.

Participants of the high-profile investment forum Thursday were taking stock of the outcome of his first public remarks on the killing, in which the crown prince appeared unwavering and fiery, calling it a "heinous" and "painful" act before warning anyone against trying to "manipulate" the crisis.

Khashoggi, a Washington Post columnist who was critical of the crown prince, was killed October 2 when he entered the Saudi consulate in Istanbul by Saudi agents, including reportedly a member of the crown prince's entourage on trips abroad. The killing has marred Prince Mohammed's standing, with critics suspecting he ordered the high-profile operation or at least knew about it.

On Thursday, Saudi Arabia said initial Turkish investigations revealed the killing was "premeditated." The acknowledgement comes after varying Saudi accounts of the incident, including initially saying that Khashoggi had walked out of their consulate alive.

Global outcry over the writer's disappearance saw more than 100 participants, including numerous CEOs of major US corporations and Western officials, cancel their participation in the three-day investment forum, which concluded on Thursday.

Last year, the forum debuted with the crown prince wowing an international crowd of global business titans with his vision of reforming and modernising Saudi Arabia both socially and economically. The kingdom is seeking trillions of dollars in new investment to create millions of jobs for young Saudis entering the workforce.

David Hamod, president and CEO of the National US-Arab Chamber of Commerce, was among the thousands inside the ornate hall Wednesday evening when Prince Mohammed gave his remarks. He said the showing by the 33-year-old heir to the throne "was electrifying" and "lit up the hall."

"I believe it gave the Saudis a great deal of confidence, hearing what the crown prince had to say," Hamod said. "Having said that I think a lot of US companies are still on pause. They're on a wait-and-see mode."

Rather than cancel their participation altogether, some companies sent mid-level executives to keep lines of communication and business open with Saudi Arabia.

Several participants in attendance from the US declined to speak with the AP at the forum, reflecting a general nervousness among the Americans in attendance.

Saudi Arabia's sovereign wealth fund, which Prince Mohammed oversees, was the organiser of the event. Some of the Public Investment Fund's biggest partners - including the CEOs of US private equity fund Blackstone and Japan's technology giant Softbank - were among those who backed out of the forum, even as PIF has invested billions of dollars in both.

As he walked through the marbled reception area of the Ritz-Carlton where the event was held, the head of the PIF, Yasir Al-Rumayyan, declined on Thursday to answer questions from an AP reporter about whether he saw this year's forum as a success.

As Western companies pulled back, the summit drew support from Prince Mohammed's allies across the region. Jordan's king, Dubai's ruler, Pakistan's prime minister and Bahrain's crown prince were among the heads of state who attended. Lebanon's premier, whose party is backed by Saudi Arabia, was also in attendance.

Russian and Asian investors were also present. The forum saw some $55 billion in investments signed, mostly in Saudi Arabia's lucrative energy market. However, the crown prince is looking for investments that shift the kingdom's economy away from its reliance on oil.

Hamod said it was regrettable that numerous US companies did not have a seat at the table at this year's summit.

"But I certainly understand why. They have stakeholders. They have institutional shareholders to which they're held accountable, so we'll have to wait and see whether their position in the aftermath of yesterday's speech changes," he said.