Mohammed bin Salman, Crown Prince of Saudi Arabia known universally as MBS, offers agreements to multinational blue-chip companies, including a 50-year tax holiday to move to the capital Riyadh, while trying to rehabilitate as a pro-business modernizer after the disastrously damaging damage to the state-sanctioned murder of Jamal Khashoggi.
However, the effort to fill some of the 59 skyscrapers in King Abdullah’s business park, which has problems with Riyadh, with the headquarters of prestigious IT and finance companies, has largely failed.
Companies including Google and Siemens appear to maintain their regional hubs in the United Arab Emirates (UAE), despite being targeted in the initiative, codenamed Program HQ, according to a London report Financial times. The HQ program is part of MBS ‘ten-year master plan to wean the country’s oil revenues, Vision2030, which also includes building a vast $ 500 billion pleasure city to try to rival Dubai as a tourist destination. .
Despite the failure to attract another star company, some large companies are increasing their presence in Saudi Arabia, opening or expanding offices in the park.
For example, Google Cloud last month agreed with Saudi Aramco, the state-owned oil company, to deliver cloud computing infrastructure, which will open the technology company’s first office in the kingdom. Alibaba and Western Union have expanded their footprint in the country and opened larger offices.
Influential Saudi officials have been tasked with the difficult task of fulfilling MBS’s desire to attract companies from neighboring jurisdictions, such as Dubai and Abu Dhabi. These statues of cities in the United Arab Emirates are much more cosmopolitan and freer than ultra-conservative Saudi Arabia, where alcohol is still completely banned, any appearance of Western social life is non-existent, and women are second-class citizens.
MBS’s response to these social and gender constraints, which are included in Wahhabi-influenced culture in Saudi Arabia, was to start work on a $ 500 billion tourism and leisure city called NEOM. NEOM will be 1000 miles from Riyadh on the Red Sea and forbidden Western pleasures will be allowed there. The resort town will have a parallel legal system, chaired directly by MBS. Although this is supposed to make strangers feel safe, it could have the opposite effect, given its killer reputation.
Justin Scheck, co-author Blood and oil, Mohammed bin Salman’s best-selling biography, told The Daily Beast: “MBS’s biggest challenge in rebuilding the Saudi economy is to get foreign companies to invest in Saudi Arabia. Even before Khashoggi, the way foreign business leaders wanted to do business with him was different from the way he wanted to do business with them. I just wanted to give them money. He wanted to invest in Saudi Arabia. Despite all these temptations, it did not happen. ”
Scheck says there are corporate concerns about the country’s ethical standards and that the Khashoggi business has made it “harder than expected” to attract large companies. Even Uber, in which the Saudis have a 5.3% stake, has condemned the country and its leadership for killing Khashoggi in 2018.
MBS made only transparent gestures about the murder: eight unidentified agents were sentenced to seven to 20 years in prison for killing Khashoggi in a secret trial. MBS did not take responsibility for ordering the killing, even though the CIA and the UN investigation concluded that he was guilty. Saudi authorities have never said what happened to Khashoggi’s remains after his body was cut with a bone saw at the country’s Turkish embassy.
A new film, Oscar-winning documentary dissident, will make it even harder for Saudi Arabia to continue whitewashing. The film’s director, Bryan Fogel, has access to the room where Khashoggi was killed and reports that his body was probably transported to the Saudi consul’s house and burned in a tandoori furnace.
Scheck points out that even for those corporations prepared to give up the country’s ongoing and blatant human rights abuses, Saudi Arabia’s small population is a major factor in why many Western companies are not interested in accepting MBS investment invitations. , regardless of how much tax. breaks or special cuts from the local laws they offer.
“The only thing he can’t solve is that, as rich as the country is, it has a population the size of Mexico City. So why would you want to go and build a car factory there? The local market is not big enough “, says Scheck.
Understanding this demographic destiny, MBS is urgently trying to attract international headquarters to fill the gap and help Saudi Arabia become a normal tax-based economy, rather than one funded by the ever-depleting oil wealth.
For MBS, delivering this transition is now a deeply personal and reputable mission, so the personnel departments of foreign companies are confident that their staff will be able to leave their hair at NEOM. While the strategy papers unveiled last year included plans for a huge artificial moon, glistening beaches and flying drone taxis, the reality so far is that the project is just another Saudi construction site embedded in allegations of corruption. , death and malpractice.
An expat living in Saudi Arabia told The Daily Beast that after the 2017 “Sheikhdown”, hundreds of prominent Saudis were detained at the Ritz-Carlton Hotel and, in some cases, beaten and tortured until they confessed. corruption and handed the government huge chunks of their fortunes, there was little desire to criticize MBS: “A lot of people believe that NEOM will be a disaster without mitigation. It looks like a city drawn by a small child. But no one will say that. MBS could throw you in jail just because you didn’t agree with him. “
Scheck says such criticism is causing MBS to double its monthly plans. “For MBS, his legitimacy as the country’s future monarch is linked to the success of Vision 2030. When people criticize things like NEOM, he just digs his heels further.”
It seems that any small success in attracting tenants will be generously packaged as a regional triumph and revealed at the annual investment conference of the Public Investment Fund, the sovereign wealth fund chaired by MBS, and scheduled to begin on January 27.
An executive said for FT he believed the kingdom hoped to use the conference to mark deals with companies that had tentatively agreed to make the transition from Dubai to Riyadh.
A Saudi government adviser, briefed on the plans, said: “It’s about attracting key tenants with an international anchor.”
Incentives include a 50-year tax holiday, the waiver of Saudi employment quotas and guarantees of protection against future regulations.
Another source, with close ties to many elderly Saudis who have been imprisoned by the MBS or who are currently under house arrest, told The Daily Beast: “Saudi gifts are very common to get their own way. The vast majority of people in prison or arrested are not threats to him; he simply cannot tolerate the prospect that he may disagree. ”
The source points to the recent imprisonment of Loujain al-Hathloul, 31, the activist who led the successful campaign to allow women to lead. In December, it was announced that she would be sentenced to five years in prison. Her rap sheet? “Call for change”.
The source says: “It is not credible that large US companies will ally with such a regime. You might get some feeders from below. What about publicly traded companies in the culture of cancellation? They will run a mile. ”