Saudi Arabia attracted a good deal of bad press in 2018. From the Jamal Khashoggi murder to the war in Yemen, the desert kingdom was in the headlines for many of the wrong reasons. In a bid to improve its image in 2019 — and attract much-needed investment for its ambitious Vision 2030 project — the country is taking steps to put investors' concerns at ease, including its decision to put a far-reaching anti-corruption probe on hold.
Saudi Arabia's wide-ranging anti-corruption probe — an investigation that became synonymous with Riyadh's Ritz Carlton, the gilded cage to which its suspects were confined — is over. On Jan. 30, the Saudi royal court issued a statement declaring an end to the process after summoning 381 people in total. Saudi authorities said they had reached settlements with 87 individuals, adding that cases against 64 others will continue due to other charges unrelated to graft. Altogether, the probe netted the state 400 billion riyals ($107 billion) recovered from suspects in the form of real estate, companies, cash and other assets. The announcement came after the release of other detainees, including Saudi-Ethiopian billionaire business leader Mohammed Hussein al-Amoudi, early this week.
Why It Matters
Officially, the crackdown targeted endemic corruption among Saudi Arabia's economic elite; unofficially, the investigation also targeted opponents — and potential opponents — of Crown Prince Mohammed bin Salman's economic programs and policy priorities. The sweeping probe alarmed much of the international business community, especially after it ensnared high-profile international business figures, including Twitter investor Prince Alwaleed bin Talal. Ultimately, the crackdown began to look as if it might threaten Saudi Arabia's foreign direct investment goals. In 2018, Riyadh succeeded in attracting only a trickle of foreign investment, leading it to conclude that its Vision 2030 project was, in some aspects, too ambitious to succeed.
For those inside the kingdom with assets to spare, it is abundantly clear that those who oppose the crown prince's goals risk not only their freedom but also their wealth.
Compounding investors' concern was the diplomatic fallout from the killing of Saudi journalist and dissident Jamal Khasshogi, which, along with Riyadh's military campaign in Yemen, turned opinion in the U.S. Congress against the crown prince. (In December 2018, the Senate voted overwhelmingly for a resolution holding him responsible for Khashoggi's assassination.) In an attempt to woo back investors and businesses, the kingdom not only wound down its official anti-corruption campaign but also initiated a government reshuffle in early January, naming the investor-friendly Ibrahim al-Assaf as foreign minister.
As part of the reshuffle, Crown Prince Mohammed placed a loyalist at the head of the all-important National Guard, which is critical for internal security, while most of his supporters and ultranationalist allies have retained positions within the monarchy. Ultimately, both the reshuffle and the official end to the high-profile corruption campaign are about messaging, rather than real internal change. Crown Prince Mohammed remains the head of the Supreme Committee for Anti-Corruption, which continues to function. Not only has the campaign collected vast sums of money for the Saudi budget, but it has also solidified the crown prince's paramount position within the monarchy. For those inside the kingdom with assets to spare, it is abundantly clear that those who oppose the crown prince's goals risk not only their freedom but also their wealth.
While Saudi Arabia looks like it will present fewer risks to business in 2019 as it courts the businesses and investors it needs to kick-start its lagging Vision 2030 projects, the kingdom's core political dynamics, in which the crown prince is able to enact his policy at will, remain unchanged.