Saudi Arabia’s Economic Dreams Threatened By Business Backlash Over Khashoggi Issue

It was about a year ago that the Crown Prince of Saudi Arabia Mohammed bin Salman pledged before a host of prominent foreign investors with going ahead with his plans for the transformation of the kingdom’s economy ad drive the economy from its dependence on oil.

But global executives have been rattled with events that have taken place in the last 10 days. The worldwide debate surrounding the disappearance of journalist Jamal Khashoggi and the allegations against Saudi Arabia of murdering him inside its consulate in Istanbul have rattled global business.

The reform plan of the prince can get shattered by this crisis. A number of key participants and speakers have already withdrawn their participation form a major conference that is slated for later this month in the country which is also seen as a key test of international support for Saudi Arabia.

There have been a number of businesses and CEOs who have distanced themselves from Saudi Arabia on the issue of the disappearance of journalist Jamal Khashoggi which has threatened the plans of the kingdom to transform the economy of the country.

Saudi’s rival Turkey has claimed that it is in possession of proof of Khashoggi, a US resident and columnist for the Washington Post, being murdered inside the Saudi consulate in Istanbul early this month.

Saudi Arabia has vehemently opposed the allegations.

British billionaire entrepreneur has said that he would dissociate himself and his company from two projects for4 the development of tourism around the red Sea and postponed negotiations with the Saudi government on investment of $1 billion on in space companies.

“I had high hopes for the current government … and its leader Crown Prince Mohammed bin Salman,” Branson said in a statement.

“What has reportedly happened in Turkey … if proved true, would clearly change the ability of any of us in the West to do business with the Saudi government.”

The development of tourism around the Red Sea was an important part of the Vision 2030 plan of the government.

There is also trouble for the flagship project of construction of a futuristic zero-emissions mega city known as NEOM.

A host of CEOs have announced that their companies would not work on the NEOM project at least for the time being. This includes the likes of Dan Doctoroff, CEO of Alphabet subsidiary Sidewalk Labs, Silicon Valley entrepreneur Sam Altman, Tim Brown, CEO of design company IDEO, and Ernest Moniz, a former US energy secretary and the CEO of Energy Futures Initiative.

The Saudi government had announced the NEOM project last year during the “Davos in the Desert” conference.

The controversy has also put a question mark over the Future Investment Initiative – a conference in Riyadh as well as confidence in the \kingdom.

“This is the dealbreaker,” said Neil Quilliam, senior research fellow at London-based think tank Chatham House. “No one thought [Vision 2030] would be entirely successful, they maybe gave it sort of a 50% success rating, now that’s really dropped off and business confidence has really dropped through the floor.”

A number of Western business tycoons have withdrawn form the conference and includes names like Uber CEO Dara Khsrowshahi, Viacom CEO Bob Bakish, and Arianna Huffington.

(Adapted from Money.CNN.com)

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Categories: Economy & Finance, Geopolitics, Regulations & Legal, Strategy, Sustainability, Uncategorized

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