I bet you, if the Saudis had foreseen the fallout from this Jamal Khashoggi mystery hit, they would have thought twice before embarking on such a murderous undertaking. It is interesting seeing how the disappearance of a dissident journalist in the Saudi embassy in Turkey has triggered a series of diplomatic reactions which is causing more than a ripple in the business world.
I guess the Saudis neither had the network nor the training to do it on a sidewalk cafe like the Russians so they took the easy route of liquidating him right inside their embassy. And probably thought no one would remember to ask about a public figure who walked in their doors and didn’t walk out.
But if spy stories and declassified files are anything to go by, they could have hired a contract killer, arranged an accident or one of many scenarios some governments use on dissenters outside their enclaves. Anyway, for the Saudis, the implications are still unfolding. Investment talks are being suspended. Richard Branson early withdrew from billion-dollar negotiations; CNN/CNBC/Bloomberg/New York Times/Financial Times have withdrawn as sponsors of the Saudi investment conference, the Future Investment Initiative, tagged ‘Davos in the Desert’ and Uber, Sotheby’s, Google Cloud, IMF, JP Morgan, HSBC and many European ministers declined participation. Steve Mnunchin, the US Treasury Secretary, similarly withdrew. Steve Chase co-founder of AOL withdrew as a speaker. Ariana Huffington pulled out from the advisory board of the conference which was being packaged to showcase the reforms of Crown Prince Mohammed bin Salman. Hollywood agency, Endeavour Content, is pulling out of a $400 million investment deal with Saudi Arabia’s Sovereign Wealth Fund. Ernest Moniz, former energy secretary under President Obama, is suspending his involvement advising Saudi Arabia on a $500 billion smart city project.
The U.K., France and the Netherlands have formed a common front in mounting pressure. Turkey, I guess, will be relieved that at least on this one occasion, it stands with the rest of Europe. After coming off bruised in its encounter with Donald Trump (they finally released that Pastor and with tariffs as an added burden), Erdogan tried to reach out to Germany but the Madam there (who has her own problems — her party’s alliance is weakening) gave him a cold shoulder.
Meanwhile, in the US, Trump keeps threatening fire and brimstone but doing little, waiting for investigations to show something concrete, perhaps. I guess his son-in-law Jared Kushner’s business relationship with the Saudi Crown Prince is staying his hand but for the first time in many years, both Republicans and Democrats in the Congress are speaking with one voice and urging action against Saudi Arabia. On the other hand, Saudi Arabia is the US’ biggest weapons buyer and Trump says that won’t change. Money talks. The Saudis are being isolated globally (and I imagine the Iranians gloating) but make no mistake, many business relationships in today’s world are too complicated and mutually profitable to be destroyed by the disappearance of a journalist.
The isolation may impede the timing of those deals but they will get back on track. For instance, the Saudi Public Investment Fund recently borrowed $11bn, its first ever loan, in a step to restructure its portfolio to include debt instruments. And guess who the biggest lenders were? The same JP Morgan Chase, HSBC and co who announced withdrawal from the Saudi conference. More, the Saudi Public Investment Fund has $3.5bn investment in Uber, $2bn in Tesla and countless billions in General Electric, Lockheed, the Blackstone Group and more in Hollywood and AI firms, even startups. Those are not deals that will ground easily.
However, the important caveat is that public revulsion, sustained by media pressure and spotlight, may trigger a decline in the market value of certain Saudi-linked companies endangering the investors themselves. That is a real scenario. The market responds to sentiments too. But it is gratifying that the Saudis have egg on their faces. They will be hard-stretched to explain this one. Commendable is the pressure the global media is putting on them in this Khashoggi disappearance and death. The state must never be allowed to grow into a monster that swallows citizens at will. Global outrage must follow acts of outrage and condemnation must follow condemnable acts. The world must be humane enough to show actionable resentment at such abominable acts. Europe and the US must insist on the punishment of individuals (royal bodyguards and all) involved and if they’re protected by the Saudi state, severe sanctions must be considered against Saudi Arabia. The Kingdom’s drive to grow its $230bn Sovereign Wealth Fund to $400bn by 2020 can be imperiled and it must learn that its overall Vision 2030 plan to diversify from oil revenues and open up to investors may very well depend on a fair respect for human rights.
Ikechukwu Obi, freelance journalist and author, wrote in from Abuja via eakeymann@yahoo.com 0902 282 0974
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