The Strategist

Investors are promoting business in Saudi Arabia while the country is dealing with Khashoggi’s murder

03/12/2019 - 11:34

Large investors are promoting deals in Saudi Arabia and investing in the country's stock market. Meanwhile, the kingdom is trying to recover from a scandal associated with the murder of Saudi journalist Jamal Khashoggi, says Reuters.

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Murder of the journalist in October undermined the kingdom’s ties with its Western allies. Now Riyadh seeks to restore its image. Saudi Arabia needs to attract foreign capital and know-how to implement its Vision-2030 plan. It provides for diversification of the economy and lower dependence on oil revenues.

Some Western governments said that the crown prince of Saudi Arabia, Mohammed bin Salman, was implicated in the murder, but the government denies any connection between the crown prince and the incident.

Some western companies engaged in technology and entertainment have distanced themselves from Saudi Arabia amid scandal. Meanwhile, several US multinationals have told Reuters about their plans in the kingdom.

Dow Chemical intends to build a plant for production of polymers worth $ 100 million in Al Jubayl and by the end of 2019 to complete a feasibility study for another complex for the production of siloxanes and silicones.

Technology and production group Honeywell International Inc continues to implement projects under the agreement for $ 3.6 billion, concluded in 2017 and aimed at implementing projects for localization of goods and services for the state oil giant Saudi Aramco.

General Electric reported that it keeps operating on the basis of agreements with Saudi Arabia in the amount of $ 15 billion signed in 2017.

In addition, according to the Saudi Stock Exchange, in the first two months of 2019, foreign investors invested $ 1.85 billion in the Saudi market. They are awaiting inclusion of Saudi stocks in the MSCI emerging markets index this year, and are assessing the pace of economic reform.

Saudi Arabian State Investment Fund, which manages more than $ 200 billion, signed a contract with an American public opinion firm in February to distance itself from the heir prince of the kingdom under international criticism.

Based in New York, KARV Communications will have to provide "consulting services in working with investors, the public and the media" for $ 120 thousand per month. It is noteworthy that the first PR goal, specified in the contract’s annex, is to "make a clear distinction" between the investment fund and the "political leaders of Saudi Arabia."