Disappearance Of Saudi Critic Could Scare Off The Country's Potential Investors

Oct 12, 2018
Originally published on October 12, 2018 6:56 pm
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MARY LOUISE KELLY, HOST:

More fallout today over the disappearance and possible murder of Saudi journalist Jamal Khashoggi. And we're going to talk next about economic fallout. Titans of business and media and the tech world are supposed to be gathering in a couple of weeks in Riyadh for a huge investment summit - Davos of the Desert (ph), as it's been dubbed. The hope was it would attract much-needed foreign investment to the kingdom. But the RSVP list is suddenly shrinking. Among those pulling out - the head of the World Bank, the CEO of Viacom, the editor-in-chief of The Economist, British entrepreneur Richard Branson.

NPR foreign affairs correspondent Jackie Northam has been keeping track of this ever-shifting guest list, and she's here now. Hey, Jackie.

JACKIE NORTHAM, BYLINE: Hi, Mary Louise.

KELLY: So is this all down to concerns about Jamal Khashoggi and what's happening there? Why are people pulling out?

NORTHAM: Well, part of it is the fact that Turkey is blaming the death of Khashoggi on Saudi Arabia. So it doesn't seem like a good idea for a lot of these participants to show up in Riyadh talking business or for a photo opportunity with the crown prince Mohammed bin Salman. Some like tech venture capitalist Steve Case said they had been looking forward to attending the event, but they want to find out what happened to Khashoggi first. And until then, they're going to put their plans on hold. Many media organizations such as the Financial Times, The New York Times, CNBC and Bloomberg among others...

KELLY: The Economist, which I just mentioned - they're all pulling out. Yeah.

NORTHAM: The Economist - they're all pulling out as well. And a number of their reporters and editors were due to be on panels. Despite this, the Saudis say that the conference will go ahead.

KELLY: From Saudi Arabia's perspective, how worrying is this? I mean, how big a deal is this conference to Saudi Arabia and its economic plans?

NORTHAM: Oh, it's hugely important to Saudi Arabia. Foreign investment in the kingdom has been falling quite dramatically over the past years. And there's also been a major flight of capital. So Saudis are pulling their money out and putting it into real estate or offshore banks or shell companies. So this conference was seen as a way to renew interest in doing business in Saudi Arabia. And organizers were probably hoping for a replay of last year's conference, which really generated a lot of excitement about doing business in the kingdom. But just two weeks after that conference, the crown prince rounded up more than 200 Saudi businessmen and government ministers and princes...

KELLY: Oh, that was when they were all under house arrest in the Ritz-Carlton in Riyadh.

NORTHAM: All under house arrest...

KELLY: Yeah.

NORTHAM: ...For almost three months in the Ritz-Carlton, which by the way is where this conference is taking place again this year.

KELLY: And I know you have recently visited that hotel. You've just been reporting for NPR in Saudi Arabia. I mean, to what extent does the kingdom remain an attractive investment opportunity for the rest of the world?

NORTHAM: It still remains an attractive place to do business for sure, and there are still key business leaders that are going to attend this conference because of those opportunities. The head of the major Wall Street banks such as JPMorgan CEO Jamie Dimon are still expected to attend. You know, they've been vying for a lucrative role in the initial public offering of Saudi Aramco, which is the world's largest oil company. So there's a lot at stake here. Also, by the way, Treasury Secretary Steven Mnuchin is also expected to attend.

KELLY: All right, so for now at least the Trump administration will be there. Some of Wall Street will be there. What about Congress? What are they saying about the situation?

NORTHAM: Well, there are calls by a number of members of Congress for suspending or ending arms deals to Saudi Arabia. And this is something that President Trump has really been pushing back on. He says that these arms sales produce jobs for Americans, many jobs for Americans. He announced about a year and a half ago that there were $110 billion in new arms sales to Saudi Arabia, although many analysts feel that those numbers were inflated. But still, it does represent jobs for Americans.

KELLY: Another facet of the fallout over the Jamal Khashoggi situation. NPR's Jackie Northam, thanks so much.

NORTHAM: Thanks, Mary Louise. Transcript provided by NPR, Copyright NPR.