Mohammed bin Salman, the crown prince of Saudi Arabia known universally as MBS, is offering deals to blue-chip multinational companies, including a 50-year tax holiday to relocate to the capital Riyadh, as he seeks to rehabilitate as a pro-business modernizer after the disastrous damage to reputation of the state-sanctioned murder of Jamal Khashoggi.
The campaign to fill some of the 59 skyscrapers in Riyadh’s ailing King Abdullah Business Park with the headquarters of prestigious IT and financial companies, however, has been largely unsuccessful.
Companies such as Google and Siemens appear poised to maintain their regional centers in the United Arab Emirates (UAE), although they are targeted under the initiative, the headquarters of the program, named by code, according to a report published in London. Financial Times. The HQ program is itself part of MBS ’10-year master plan to wean the country off oil revenues, Vision2030, which also includes building a sprawling $ 500 billion yachting city to try and compete with Dubai as a hub. touristic.
Despite the inability to attract yet a star company, some large companies are strengthening their presence in Saudi Arabia, opening or expanding offices in the park.
For example, last month Google Cloud agreed with Saudi Aramco, the state oil company, to provide cloud computing services infrastructure, which will lead the tech company to open its first office in the kingdom. Alibaba and Western Union have also reportedly increased their footprint in the country and opened larger offices.
Influential Saudi officials have been tasked with the difficult task of fulfilling MBS’s wishes by attracting companies from neighboring jurisdictions such as Dubai and Abu Dhabi. These UAE city-states are much more cosmopolitan and liberal than ultra-conservative Saudi Arabia, where alcohol is still completely banned, any semblance of Western social life is nonexistent, and women are second-class citizens.
MBS’s response to these social and gender restrictions, which are rooted in Saudi Arabia’s Wahhabi-influenced culture, has been to start work on a $ 500 billion tourist and recreation town, named NEOM. NEOM, will be 1000 miles from Riyadh on the Red Sea, and otherwise forbidden Western pleasures will be permitted there. The seaside resort will have a parallel legal system, chaired directly by MBS. While this is supposed to make strangers feel safe, it just might have the opposite effect given its deadly reputation.
Justin Scheck, co-author of Blood and oil, Mohammed bin Salman’s best-selling biography, told The Daily Beast: “MBS’s biggest challenge in reshaping the Saudi economy is getting 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. They just wanted him to give them money. He wanted them to invest in Saudi Arabia. Despite all these incentives, this did not happen.
Scheck says the country’s ethical standards arouse qualms in companies and that the Khashoggi affair has made it “more difficult than expected” to attract large companies. Even Uber, in which the Saudis have a 5.3% stake, condemned the country and its leaders for Khashoggi’s murder in 2018.
MBS has only made symbolic gestures of transparency about the murder: Eight unidentified officers were sentenced to prison terms of seven to 20 years for the murder of Khashoggi in a secret trial. MBS did not accept responsibility for ordering the murder, even though the CIA and a UN investigation concluded he was guilty. Saudi authorities have never said what happened to Khashoggi’s remains after his body was cut with a bone saw in the country’s Turkish embassy.
A new film, documentary at the Oscars The dissident, will make it even more difficult for Saudi Arabia to pursue money laundering. The director of the film, Bryan Fogel, has access to the room where Khashoggi was killed and reports that his body was most likely taken to the Saudi consul’s home and burned in a tandoori oven.
Scheck points out that even for companies willing to ignore the constant and blatant human rights violations in the country, Saudi Arabia’s small population is a major factor in why many Western companies are not interested in accepting the lawsuits. invitations to investment from MBS, regardless of the number of taxes. breaks or special exclusions from local laws it offers.
“The only thing it can’t fix is that, as rich as the country is, it has a population the size of Mexico City. So why would you want to build a car factory there? The local market is just not big enough, ”says Scheck.
Understanding this demographic fate, MBS is now urgently trying to attract international headquarters to fill the void and help Saudi Arabia become a normal tax economy rather than an economy funded by ever-shrinking oil wealth.
For MBS, ensuring this transition is now a deeply personal mission, and on which he has built his reputation, the personnel departments of foreign companies are therefore reassured that their staff will be able to indulge in NEOM. While strategy papers leaked last year including plans for a huge man-made moon, glow-in-the-dark beaches, and flying drone taxis, the reality so far is that the project is than another troubled Saudi construction site mired in allegations of corruption, death and malpractice.
An expat living in Saudi Arabia told the Daily Beast that after the ‘Sheikhdown’ of 2017, in which hundreds of prominent Saudis were detained at the Ritz-Carlton hotel and, in some cases, beaten and tortured to death. ‘As they sign corruption confessions and hand over the government has huge stakes in the fortunes, there was little appetite to criticize MBS: “A lot of people think NEOM is going to be an absolute disaster. It looks like a city drawn by a toddler. But no one will say that. MBS could throw you in jail just for disagreeing with him.
Scheck says that such criticism is simply causing MBS to double down on its moonshot plans. “For MBS, his legitimacy as the country’s future monarch is tied to the success of Vision 2030. When people criticize things like NEOM, he only digs his heels.
It seems likely that any small success in attracting tenants will be lavishly touted as a regional triumph and unveiled at the annual investor conference of the Public Investment Fund, the sovereign wealth fund chaired by MBS, which is scheduled to begin on January 27.
An executive told the FT he believed the kingdom hoped to use the conference to brandish deals with companies that had tentatively agreed to move from Dubai to Riyadh.
A Saudi government adviser briefed on the plans said, “This is about attracting major international tenants.”
The proposed incentives include a 50-year tax holiday, the removal of Saudi employment quotas, and guarantees to protect against future regulations.
Another source with close ties to many elderly Saudis who have been jailed by MBS or are currently languishing under house arrest told the Daily Beast: “Members of the Saudi royal family are very accustomed to going their own way. The vast majority of people in prison or under arrest are not threats against him; he just can’t tolerate the prospect that they might disagree.
The source points to the recent incarceration of Loujain al-Hathloul, 31, the activist who successfully led the campaign to allow women to drive. In December, it was announced that she was sentenced to five years in prison. His rap sheet? “Call for change.”
The source said, “It just isn’t credible that big American corporations are going to ally themselves with a regime like this. They could have bottom feeders. But companies with public participation in the culture of cancellation? They will run a mile.
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