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Challenging the Saudi Crown Prince: Alwaleed bin Talal toughs it out

Dr. James M. Dorsey

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Incarcerated for almost two months in a gilded cage in Riyadh’s luxurious Ritz Carlton Hotel, Saudi billionaire businessman Prince Al-Waleed bin Talal appears to be putting up a fight that could challenge Crown Prince Mohammed bin Salman’s assertion that his two month-old purge of scores of members of the ruling family, senior officials, and businessmen constitutes a campaign against corruption.

Many of those detained in Prince Mohammed’s purge, dubbed by critics as a power and asset grab dressed up as an anti-corruption effort, have bought their release by agreeing to surrender significant assets. The government has said it hopes to recover up to $100 billion in allegedly illegitimately acquired funds and assets.

Prince Mutaib bin Abdullah, a favoured son of the late King Abdullah who was deposed as commander of the National Guard in a bid to neutralize the Saudi crown prince’s most potent rival, secured his release by agreeing to pay $1 billion and signing a document in which he confessed to charges of corruption.

In what appears to be the largest settlement demand, Prince Al-Waleed has, according to The Wall Street Journal, resisted pressure by the government to hand over $6 billion.

Instead, the prince has reportedly offered the government a significant stake in his Riyadh-listed Kingdom Holding that has invested in blue chips such as Citibank, Twitter, Four Seasons hotels, and Disney, and operates a media and entertainment empire. Kingdom Holding has lost 14 percent of its $8.7 billion market value since Prince Al-Waleed’s detention. The prince has also insisted that he retain a leadership position in his conglomerate.

With a fortune estimated by Forbes at $16.8 billion, Prince Al-Waleed reportedly believes that the cash settlement demanded by the government would put his empire at peril and amount to an admission of guilt.

That may indeed be the purpose of the exercise. A social reformer, who already years ago implemented within his own company changes of women’s status announced in recent months by Prince Mohammed, is Saudi Arabia’s most prominent entrepreneur who is continuously welcomed around the world by heads of state and government and business moguls.

The son of Prince Talal bin Abdulaziz, a liberal nicknamed the Red Prince, who in the 1960s and again in the first decade of the 21st century publicly criticized his family’s rule, Prince Al-Waleed is believed to have no political ambitions.

In resisting Prince Mohammed’s demands, Prince Al-Waleed is challenging an opaque and seemingly arbitrary process in which despite assertions by the government that it has conducted extensive investigations and collected substantial evidence of corruption, bribery, money laundering and extortion, there has been little, if any, discernible due process and no proof publicly presented.

Quoting sources close to Prince Al-Waleed, The Wall Street Journal reported that the businessman was demanding a proper investigation and was willing to fight it out in court. “He wants a proper investigation. It is expected that al-Waleed will give MBS a hard time,” the Journal quoted a person close to Prince Al-Waleed as saying. The person was referring to Prince Mohammed by his initials.

A court battle would put the government’s assertions of due process to the test and would also shine a spotlight on the integrity of Saudi Arabia’s judicial system. The risk involved in a legal battle is that the charges levelled against Prince Al-Waleed and others were common practice in a kingdom in which there were no well-defined rules governing relationships between members of the ruling family and the government as well as ties between princes and princesses who wielded influence and businessmen.

There is little doubt that Prince Mohammed’s purge is popular among significant segments of the population, half of which is classified as low- or middle-income families, that has long resented the elite’s seemingly unbridled perks.

Prince Mohammed has so far been shielded against questions of the source of his own wealth and that of his tack of the ruling family. Several immediate relatives of Prince Mohammed were last year identified in the Panama Papers leaked from the files of a law firm in the Central American nation that handled offshore business and transactions by the world’s mega-rich.

Media reports have since suggested that the prince had spent in recent years $1.25 billion on a $500 million yacht, a $300 million mansion in France, and a $450 million Leonardo da Vinci painting. Prince Mohammed has denied buying the art work that was acquired by a close associate of his allegedly on behalf of the Abu Dhabi Department of Culture and Tourism.

Shining the spotlight on the anti-corruption campaign in a legal battle with Prince Al-Waleed would come at a time that the government is unilaterally rewriting the kingdom’s social contract that involved a cradle-to-grave-welfare state in exchange for surrender of political rights and acceptance of Sunni Muslim ultra-conservative and Bedouin moral codes.

The government this week paid $533 million into a newly established social welfare fund to help families offset the cost of the imminent introduction of a five-percent value-added tax on goods including food, and services, as well as subsidy cuts that would substantially raise the price of electricity and gasoline. The government was forced earlier this year to reverse a freeze on public sector wage increases and perks and slowdown its austerity program because of anger and frustration expressed on social media.

Labor and Social Development Minister Ali al-Ghafees told the state-run Saudi Press Agency that approximately three million families or 10.6 million beneficiaries had already been paid the maximum relief of 938 Saudi riyals ($250) out of the newly created fund.

The government, moreover, this month announced a $19bn stimulus package that includes subsidised loans for house buyers and developers, fee waivers for small businesses and financial support for distressed companies. It also presented its new budget involving record spending in which funding of defense outstrips that of education in a country with a 12.7 percent unemployment rate. A Bank of America Merrill Lynch report predicted last year that youth unemployment could jump from 33.5 to 42 percent by 2030.

Prince Mohammed is banking on continued public support for his economic and social reforms, and on the fact that once the dust has settled foreign investors will forget whatever misgivings they may have had about the lack of due process and absence of rule law in the anti-corruption crackdown. Foreign diplomats in the kingdom noted that the businesses of those detained or penalized continued to operate and that no foreign interests were caught up in the purge.

However, to maintain his popularity, Prince Mohammed will have to manage expectations, deliver jobs, continue to massage the pain of austerity and the introduction of a new social contract, and ensure that the public continues to perceive his purge as an anti-corruption campaign in which the high and mighty are no longer above the law.

A legal battle with Prince Al-Waleed that publicly puts to the test the government’s assertions could upset the apple cart. That may be the leverage Prince Al-Waleed hopes will work in his favour as he negotiates his settlement from the confines of the Ritz Carlton.

Dr. James M. Dorsey is a senior fellow at the S. Rajaratnam School of International Studies, co-director of the University of Würzburg’s Institute for Fan Culture, and the author of The Turbulent World of Middle East Soccer blog, a book with the same title, Comparative Political Transitions between Southeast Asia and the Middle East and North Africa, co-authored with Dr. Teresita Cruz-Del Rosario and three forthcoming books, Shifting Sands, Essays on Sports and Politics in the Middle East and North Africaas well as Creating Frankenstein: The Saudi Export of Ultra-conservatism and China and the Middle East: Venturing into the Maelstrom.

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The economic summit in Bahrain won’t be about Palestinian-Israeli conflict

Ksenia Svetlova

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In less than two weeks Jared Kushner and Jason Greenblatt will present in Manama the first part of the long-awaited “deal of the century”, the peace initiative of president Donald Trump designed to find an ultimate solution for the prolonged Palestinian-Israeli conflict.

Iraq and Lebanon will not take part in the event, while Tehran had already accused the participants, mainly Saudi Arabia of “betrayal of the Palestinian struggle”. Following the massive pressure on Arab leaders and promises of significant economic development, the American administration was finally able to secure the participation of Egypt, Jordan, the Gulf states, and probably Morocco. Israel didn’t receive an official invitation for this event yet. It is, however, clear that it will be invited, and some rumors imply that PM Netanyahu himself might come to Bahrain, a country with which Israel doesn’t have any diplomatic relations.

Yet, it seems that this odd event in Manama will resemble a wedding without the bride. The groom will be there, so are the loving parents who will provide the dowry and the guests, but the bride, i.e. the Palestinian autonomy had already declared that it will not send any official or unofficial delegation to the upcoming economic conference.

The relations between the White House and the Palestinian administration had gone sour since President’s Trump decision to move the US embassy to Jerusalem. The Palestinians are suspicious of Trump’s attempts to promote “a deal” that might not include a reference to a two-state solution. For the last two years, the sole connection between Washington and Ramallah has been maintained by the respective security agencies.  Recent remarks made by the U.S. Ambassador to Israel on Israeli territorial claims in Judea and Samaria and the hints of Israel’s annexation plans intensified Palestinian concerns towards the unveiling of the first part of “the deal”. Palestinian officials had harshly criticized the participation of Arab countries in Bahrain conference, expressing hope that they will send low-key representation, while the Jordanian Kind explained that he decided to send a delegation to the summit “to listen and remain knowledgeable of what is taking place”.

Yet, the most fascinating thing about the economic conference is that it’s not at all about the Palestinian-Israeli conflict despite its title. With only one year left prior to the US presidential elections and considering the political turmoil in Israel and the unwillingness of the Palestinian partner to engage in any plan presented by Trump’s administration, there is little hope in Jerusalem, Ramallah or Washington that the “deal of the Century” will accumulate in peaceful solution in the current century.

Why, then, the American administration is investing time and energy in the upcoming Bahrain summit? The answer is clear: mostly, to consolidate the alliance of the “moderate Arab states”.  Considering the recent dramatic events at the sea of Oman and the attack on two oil-tankers, it will not be far-fetched to imagine that the growing tensions in Iran will overshadow the official reason for the gathering. In the same fashion, the “anti-terror” conference in Warsaw that took place in February this year, was solely about Iran, while all other aspects of anti-terrorism activities were left behind. The deterioration of the situation in the Persian Gulf is crucial for the hosts and their allies – the Arab countries in the Gulf. Egypt and Jordan were required to be there because they are key American allies in the region who also maintain diplomatic relations with Israel. The plan that is envisaged by Kushner and Greenblatt will include economic benefits and development programs for both Amman and Cairo who are dealing with pressing economic hardships. Would they prefer to stay away from the conference that is being shunned by the Palestinians? Probably. Could these two countries, who receive significant economic help from the US say no to the invitation and not show up at the wedding of the century? Highly unlikely.

Ironically, some 52 years ago in Khartoum, it was the Arab league that had unanimously voted on the famous “three no’s” resolution in Khartoum, declining any possibility of dialogue with Israel. Today, when the Arab states are weakened by the “Arab spring” and preoccupied with growing tensions in the Persian Gulf while the focus has shifted from the Palestinian question elsewhere, they are more prone than ever to go along with practically any American plan, while the only ones who refuse to cooperate with Trump and obediently fulfil his orders are the Palestinians who will be absent from Manama gathering. The support of the Palestinian struggle and its importance in Arab politics had dwindled, while other regional affairs had moved center stage. Considering this dramatic change of circumstances, the odd wedding in Bahrain doesn’t seem so odd anymore. It can be seen as yet another step in American attempts to consolidate an Arab alliance against Iran. The Palestinian-Israel conflict that will keep simmering after the conference just as it did before has nothing to do with it.

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Who benefits most of suspicious attacks on oil tankers, tensions in the Gulf?

Payman Yazdani

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The events roiling the Persian Gulf in recent weeks and days have the potential to affect everything from the price of gas to the fate of small regional states.

A look at the tensions going on around the world including the Middle East and Persian Gulf region, East Europe, Venezuela all indicate that these tensions originate from the US administration’s unilateral unlawful measures.

The White House’s unlawful withdrawal from the Iran’s nuclear deal (JCPOA), designation of the Islamic Revolutionary Guards Corps (IRGC) as a terrorist group, reimposing sanctions on Iran and trying to drive Iran’s oil export to zero all are provocative and suspicious moves of the US that have fueled the regional tensions.

The US and its regional allies including Saudi Arabia and the UAE’s suspicious and provocative move to accuse Iran of being behind the attacks on two ships at Fujairah in the UAE without presenting any document was also foiled by Iran’s vigilant approach and reduced tensions to some extent.

While the Japanese Prime Minister is visiting Iran after 4 decades and many expected even more reduction of the tensions in the region due his visit, in another suspicious and provocative move two oil tankers were targeted in Sea of Oman, a move that can intensify the tensions more than before.

Undoubtedly the US and its proxies in the region as usual will accuse of Iran being behind the incident without any document in hours once again, but the main question is that who is benefiting the most of the tensions in the Persian Gulf region?

Pondering the following reasons one can realize that the number one beneficiary of the tensions and attacks on tankers in the Persian Gulf and the Middle East is the USA and respectively Tel Aviv and the undemocratically  appointed rulers of some regional Arab states seeking their survival in following the US policies.

– Contrary to decades ago the US is now one of the biggest oil and gas producers in the world seeking to grab the market share of the other countries in the world. Following US unlawful withdrawal from the JCPOA and its efforts to drive Iran’s oil export to zero under the pretext of different accusations, in fact the US is making efforts not only to grab Iran’s share of the energy market but also to limit Iran’s income to reduce Iran’s regional influence. The US move to create tensions in Venezuela and East Europe and slapping sanctions against Caracas and Moscow can also be interpreted in this line.

– Any tension in the Persian Gulf not only will increase the energy price in global market but also will create enough pretexts for Washington to boost its military presence in the region. This means control of energy routes by the US in order to contain its rivals like China, EU, Japan and new rising economies like India which their economies are heavily dependent on the energy coming from the Persian Gulf and Middle East.

– Tensions in the region besides Iranophobia project will guarantee continuation of purchase of American weapons by some regional countries such as Saudi Arabia. By continuation of selling weapons to Saudi Arabia the US not only creates thousands of jobs for Americans but also keeps its rivals like China and Russia out of Middle East weapon market.

– Tensions and conflicts created by the US in Middle East has resulted in great rifts and divergence among regional states which is vital for Tel Aviv’s security and its expansionist policies.

From our partner MNA

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The odds of success for Japanese PM’s visit to Iran

Payman Yazdani

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US President’s recent retreat from his previous rhetoric stances towards Iran should not be misinterpreted as the White House’s retreat from its policy of ‘maximum pressure’ on Iran.

In line with its maximum pressure on Iran policy, on Friday the United States imposed new sanctions on Iran that target the country’s petrochemical industry, including its largest petrochemical holding group, the Persian Gulf Petrochemical Industries Company (PGPIC).

The main reason behind the changes to Trump administration’s tone against Iran in fact is internal pressure on him. Americans are against a new war in the region. Also opposition from the US allies which will suffer from great losses in case of any war in the region is another reason behind change to Trump’s tone.

Japanese Prime Minister Shinzo Abe is slated to visit Tehran on Wednesday June 12. He hopes to use his warm relation with Iran and the US to mediate between the countries.

Besides Abe’s warm relations with Iranian and the US leaders there are others reasons that potentially make him a proper mediator including Japan’s efforts to have independent Middle East policy and not having imperialistic record in the region which is a good trust building factor for Iran.

Above all, as the third largest economy of the world Japan is very dependent on the energy importing from the region. Japan imports 80 percent of its consuming energy from the Middle East which passes through Hormuz strait, so any war and confrontation in the region will inflict great losses and damages to the country’s economy and consequently to the world economy.

To answer the question that how Mr. Abe’s efforts will be effective to settle the tensions depends on two factors.

First on the ‘real will’ and determination of the US and Iran to solve the ongoing problems especially the US ‘real will’. One cannot ask for talk and at the same time further undermine the trust between the two sides by taking some hostile measures like new sanctions that the US slapped against Iran’s petrochemical section last night on the eve of Mr. Abe’s visit to Tehran. If there is a real will, even no need to mediator.

Second we have to wait to see that how the Japanese PM will be able to affect the US’ decisions. Iran’s Keivan Khosravi spokesman for the Supreme National Security Council said efforts to remove US extraterritorial sanctions against Iran could guarantee the success of Japanese PM’s visit to the Islamic Republic.

From our partner MNA

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