Saudi Prince May Have Trouble Finding U.S. Investors After Anti-Corruption Campaign
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He's been called a reformer. He's been called a bully. Next week, he visits the U.S. Saudi Arabia's Crown Prince Mohammad Bin Salman is coming to drum up business for the Saudi Kingdom. Back home, Some are accusing him of coercing wealthy Saudis for cash, but he's also making reforms like letting women drive. NPR's Jackie Northam reports.
JACKIE NORTHAM, BYLINE: You can expect a large entourage and a splashy PR campaign to accompany Prince Mohammed Bin Salman on his first visit to the U.S. since he was named crown prince last June. The 32-year-old Saudi royal is expected to meet with President Trump Tuesday and is likely to be pressed on his plans for the protracted Saudi-led war in Yemen. But then the rest of his trip will be about investments.
HELIMA CROFT: I think he wants to convey the message that Saudi Arabia is open for business.
NORTHAM: Helima Croft is with RBC Capital Markets. She says Prince Mohammad has been shaking up the status quo as he tries to implement broad economic reforms in the ultra-conservative Kingdom.
CROFT: We think of him sort of moving fast and breaking things. He's young. He's disruptive.
NORTHAM: The crown prince has quickly consolidated power, ousting royal rivals and locking up opposition along the way. But he's also liberalizing the Kingdom, allowing Saudis to attend concerts and movies and allowing women to start their own businesses. This is part of his strategy to wean the country off its dependency on oil and make it welcoming to foreign investment, something the crown prince and his entourage will drive home during the visit.
CROFT: What they want to say is, we are continuing with the important reforms. We want investment. We need foreign investment in our domestic industries to help generate jobs in Saudi Arabia.
NORTHAM: But the crown prince will also have to calm some investors nerves. Rattled by a recent anti-corruption campaign in Saudi Arabia, hundreds of princes, government ministers and businessmen were rounded up and detained for three months at the luxurious Ritz-Carlton Hotel. There are reports some of the detainees were abused. The government says it collected more than $100 billion in what it calls settlements. Emily Hawthorne with Stratfor, a global intelligence company, says potential investors are right to be concerned the same thing won't happen to them.
EMILY HAWTHORNE: They're going to be looking for any sort of signal of, can I trust this guy? Can I trust that my money is going to actually go into what I think it's going to go into? And so far, he hasn't supplied those answers.
NORTHAM: Still, Hawthorne thinks the crown prince will find some investors tantalized by new business in Saudi Arabia. He'll visit Silicon Valley to push for technology deals. He'll head to Houston and New York to talk about the plan to sell off 5 percent of the state-owned Saudi Aramco, the world's largest oil company. The Saudis are hoping to raise $100 billion in the Aramco deal to be used for infrastructure projects and the like.
PATRICK HELLER: One of the challenges for a company like this in putting itself out there for its public is that people will start to ask more questions.
NORTHAM: Patrick Heller is with the Natural Resource Governance Institute, which focuses on governance of state-owned companies. He says Aramco has a very poor track record for things like transparency. Once listed, it'll have to divulge the size of its oil reserves and how much of the profits go back to the royal family.
HELLER: I have little doubt that Saudi Aramco has a very sophisticated financial management. But the fact of the matter is that from the outside, we don't really know exactly what those financial management systems look like.
NORTHAM: The New York Stock Exchange is in the running to be part of the Aramco deal, which is on track to become the largest public offering ever - a strong selling point for Saudi Arabia's crown prince during his U.S. tour. Jackie Northam, NPR News. Transcript provided by NPR, Copyright NPR.
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