King, MBS meet Khashoggi family - Strong Kuwaiti delegation at event - Riyadh pledges $3bn to Pak

RIYADH: (From left) Pakistani Prime Minister Imran Khan, Jordanian King Abdullah II, Saudi King Salman, Dubai ruler Sheikh Mohammed bin Rashed Al-Maktoum and Saudi Crown Prince Mohammed bin Salman meet on the sidelines of the Future Investment Initiative FII conference in the Saudi capital yesterday. – AFP

RIYADH: Saudi Arabia’s crown prince hailed yesterday a conference that has drawn investment deals worth $50 billion despite a boycott over the killing of journalist Jamal Khashoggi, declaring the event as “great - more people more money”.

This year’s Future Investment Initiative was overshadowed by the death of the Saudi journalist, a critic of Crown Prince Mohammed bin Salman, who vanished after he entered the country’s consulate in Istanbul on Oct 2. Yesterday, the Saudi cabinet, after a meeting headed by King Salman, promised to hold to account those who were responsible for Khashoggi’s death and those who “failed in their duties” in the case that has provoked an international furor and strained ties between Riyadh and the West.

Prince Mohammed, known as MBS, arrived at the conference late in the day after attending a meeting at which the king received members of Khashoggi’s family, including his son Salah and brother Sahel. Many in the audience of over 2,000 clapped or cheered as the prince, the kingdom’s architect of its reform drive, entered the main hall, smiling as he sat down. The crown prince, who praised the conference in comments to reporters as he toured the venue and took selfies, will participate in a panel today.

Kuwait’s participation in the conference was a chance to get updated about future of regional and global investments, Finance Minister Nayef Al-Hajraf said. The large presence of Kuwaiti public and private institutions shows keenness on making the best use of this event, the largest of its kind in the Arab world, Hajraf said in a statement. The Saudi economy has solid and strong foundations thanks to its huge local market and enormous potentials for exporting non-petroleum products, he argued.

“For these reasons, we believe that Kuwait’s considerable contribution was important to get acquainted with the great and promising investment opportunities and to benefit from the regional and international experiences for the future of investment,” he said. Kuwait’s official delegation to the event comprises Hajraf, Commerce and Industry Ministry Khaled Al-Roudhan, Governor of the Central Bank Mohammad Al-Hashel and Managing Director of Kuwait Investment Authority Farouq Bastaki.

The event is being held at the opulent Ritz-Carlton, where scores of princes, businessmen and officials were detained in a crackdown on corruption soon after last year’s conference ended. Saudi billionaire Prince Alwaleed bin Talal, who was among those detained, appeared at the forum beside MBS, who led the anti-corruption drive.

Energy Minister Khalid Al-Falih assured the conference that the world’s top crude exporter was passing through a “crisis of a sort” but would power ahead with economic reforms. The chief executive of Saudi Aramco said the government remained committed to a partial flotation of the oil giant but that the timing would depend on market conditions and other factors. Falih said the murder of Khashoggi was regrettable, adding that “nobody in the kingdom can justify it”.

Falih said the OPEC kingpin was ready to boost its crude production and spare capacity to help maintain a balance in the global oil market. He also said OPEC and non-OPEC producers are expected to sign in December an “open-ended” agreement to continue cooperation in the energy markets. “I don’t rule out that the kingdom’s production which has been 9-10 (million barrels per day) over the last decade or so will be a million to two millions (barrels) higher,” Falih said, without providing a time frame.

Saudi Arabia has already boosted its daily output to well over 10.5 million bpd to meet rising demand in the wake of several production disruptions in other countries. “Investing in the capacity and producing the capacity will continue to be done,” Falih said despite complaining of the high cost of raising and sustaining such capacity. The Saudi minister expected demand for oil, which currently stands at around 100 million bpd, to rise to 120 million bpd over the next three decades. Falih said the oil producers will continue to monitor supply and demand in the market especially with the Iran sanctions looming and would be ready to act if needed.

Pakistani Prime Minister Imran Khan’s government announced later yesterday in a statement from Islamabad that Saudi Arabia had pledged $3 billion to Pakistan as it battles a balance of payments crisis, as well as to defer another $3 billion in payments for oil imports. During his address at the FII, Khan confirmed that Pakistan was also in talks with the International Monetary Fund over a new bailout.

Hundreds of bankers and company executives joined officials for the Future Investment Initiative. But while last year’s inaugural conference drew the global business elite, this year’s event has been marred by the withdrawal of more than two dozen high-level speakers. Many foreign investors see a risk that the Khashoggi case could damage Riyadh’s ties with Western governments. Saudi Arabia’s stock index was down 1.3 percent in late trading on persistent investor concern. And in a fresh setback, the forum’s website went down on Monday after an apparent cyberattack. There was no immediate claim of responsibility. It was back up with reduced content as the conference

US Treasury Secretary Steven Mnuchin and senior ministers from Britain and France pulled out of the event along with chief executives or chairmen of about a dozen big financial firms such as JP Morgan Chase and HSBC, and International Monetary Fund chief Christine Lagarde. Uber CEO Dara Khosrowshahi, who also withdrew from the event, said the firm was awaiting the full facts on Khashoggi’s case before deciding whether that would affect Saudi involvement in the ride-hailing service. Saudi Arabia’s sovereign wealth fund has invested in Uber and its managing director sits on the app’s board.

Russia sent a large delegation led by Direct Investment Fund head Kirill Dmitriev. He said Khashoggi’s killing needed to be investigated and the culprits punished, but that the Saudi drive for economic and social reform could not be ignored. “Saudi Arabia’s reforms are important and they are worth supporting,” he told Reuters. Saudi Arabia signed 25 deals in the oil and gas industries and infrastructure sectors with firms such as Trafigura, Total, Hyundai, Norinco, Schlumberger, Halliburton and Baker Hughes. Saudi Aramco said it signed 15 memoranda of understanding worth $34 billion.

Total Chief Executive Patrick Pouyanne, a panelist yesterday, said the French oil and gas producer would announce a retail network in the kingdom with Saudi Aramco. Falih heaped praise on Pouyanne for standing by Saudi Arabia in this difficult period. “We see what partnership means when you have difficult times,” Pouyanne responded as he shared the stage with Falih. “This is when you really strengthen a partnership.”

The managing director of the kingdom’s sovereign wealth fund, the main backer of the event, said the country was becoming more transparent and that the Saudi Public Investment Fund continued to develop new industries under economic reforms launched by the crown prince. Yasir Al-Rumayyan said the fund has invested in 50 or 60 firms via SoftBank Group’s Vision Fund and would bring most of those businesses to the kingdom. PIF has committed to invest $45 billion in Vision Fund. SoftBank Group’s chief executive Masayoshi Son - who maintains close relations with the crown prince - cancelled his speech, Bloomberg reported.

Many Western banks and other companies, fearful of losing business such as fees from arranging deals for Saudi Arabia’s $250 billion wealth fund, sent lower-level executives even as their top people stayed away. Top executives of Asian firms have been hesitant to pull out, so the participation of Chinese and Japanese institutions may help make the three-day conference as a success. “The West is still interested in the business opportunity that Saudi offers,” said Tony Chan, president of Saudi Arabia’s King Abdullah University of Science and Technology, who attended the forum. “The no-shows have to be reconciled with that fact.

As business shifts from West to East, those companies have to find a balance between maintaining a good PR image and their business considerations.” “The high profile withdrawal of so many American CEOs from the conference certainly presents opportunities for Asian and Russian companies to make a splash,” Ellen Wald, author of the book “Saudi Inc”, told AFP. For these reasons, the Western boycott may have little long-term impact on Saudi economic prospects. – Agencies