Dominoes falling in the Arab world’s largest economy.
Over the weekend, Saudi Arabia witnessed the arrests of 17 princes, including billionaire Alwaleed bin Talal. The arrests came after the government formed an anti-corruption committee led by Crown Prince Mohammed bin Salman, King Salman’s favorite son and heir to the throne.
Experts said these arrests happened as a way for King Salman to clear “any remaining obstacles to his son’s ascension to the throne.” However, it may have an affect on the world economy as bin Talal owns 95% of Kingdom Holding, which has stakes in Apple and Twitter.
Al Arabiya, a station owned by the kingdom and has broadcasts approved, announced the arrests. Those arrests happened hours after the government formed the anti-corruption committee, which apparently “has the right to investigate, arrest, ban from travel, or freeze the assets of anyone it deems corrupt.”
CNN reported that Saudi TV claimed the committee had to come to fruition “due to the propensity of some people for abuse, putting their personal interest above public interest, and stealing public funds” and will “trace and combat corruption at all levels,”
The de facto royal hotel, the Ritz Carlton in Riyadh, had an emergency evacuation, which caused rumors to circulate “that it would be used to house detained royals.” The airport for private planes also shut down. possibly as a way to stop “the rich businessmen from fleeing.”
At least 38 former, current, and deputy ministers, have been arrested on accusations of corruption. CNN has obtained the names of 17 people on the list including formal head of the royal court Khaled Al-Tuwaijri, Saudi media mogul Waleed Al-Ibrahim and Prince Turki bin Nasser.
According to Saudi TV, the three ministers removed from their posts were Economy and Planning Minister Adel bin Mohammed Faqih, National Guard Minister Prince Miteb bin Abdullah bin Abdulaziz and Naval Forces Commander Admiral Abdullah bin Sultan bin Mohammed Al-Sultan.
The three ousted ministers were replaced with Prince Khalid bin Abdulaziz bin Mohammed bin Ayyaf Al Muqren becoming National Guard minister, Mohammed bin Mazyad Al-Tuwaijri becoming the Economy and Planning Minister, and Vice Admiral Fahd bin Abdullah Al-Ghifaili taking on the role of Naval Forces Commander.
Prince Alwaleed’s Arrest
As I said, the arrest of Prince Alwaleed bin Talal could affect the world economy. Bin Talal, and the others arrested, have had their bank accounts and assets frozen.
Since his arrest, his company Kingdom Holding fell by 10% and ended Sunday down 7.6%. It dropped 5% more on Monday. Why is this important? From Forbes:
Prince Alwaleed’s company also holds significant shares of Citigroup, Twitter, Apples and Lyft, among other investments. According to reports, the assets of all of the men currently detained have been not been seized, although Saudi banks have begun to freeze the bank accounts of those under investigation. Surely, the companies in which Prince Alwaleed is a major stakeholder will be watching to see how Saudi authorities proceed .
No one knows exactly how much he owns of each company due to the secrecy of his company, but it has caused Twitter and Citigroup shares to fall. From the BBC:
“From a sentiment perspective, this will hurt the businesses associated with the prince,” said Nabil Rantisi, the managing director of brokerage at Menacorp, a United Arab Emirates investment firm.
“Major investors may shy away from these companies for a while until they have more clarity on the outcome of the situation”.
Two Saudi princes also died in a span of 24 hours. Prince Abdul Aziz, the youngest son of the late King Fahd, died on Sunday. Some reports said he died in a gunfight while resisting arrest while others did not mention a gunfight, but said his death came while resisting arrest.
Abdul Aziz is confirmed dead. He was 44 years old. Earlier, Mansour son of the former crown prince Muqrin was also declared dead. https://t.co/IsUyU896o4
— Ali H. Soufan (@Ali_H_Soufan) November 5, 2017
Prince Mansour bin Moqron, the deputy governor of Asir province, and other officials died in a helicopter crash close to the Yemen border. No one has revealed what caused the crash, but it has raised suspicions since it happened right after the purge. From the BBC:
Prince Mansour was the son of Prince Muqrin bin Abdulaziz, a former intelligence chief who was crown prince between January and April 2015, when he was pushed aside by Prince Mohammed’s father, King Salman, now 81.
Mansour served as a consultant to his father’s royal court and in April 2017 was among eight young royals appointed deputy governors.
Mohammed bin Salman, Heir to the Saudi Throne
So who is this bin Salman guy? Rumblings of his rise began the past few years as deputy crown prince who had a lot of power for his role. He became the world’s youngest defense minister and placed in charge of the oil industry. From The New York Times:
He has a hand in nearly all elements of Saudi policy — from a war in Yemen that has cost the kingdom billions of dollars and led to international criticism over civilian deaths, to a push domestically to restrain Saudi Arabia’s free-spending habits and to break its “addiction” to oil. He has begun to loosen social restrictions that grate on young people.
But these moves have also caused the kingdom to shed “decades of tradition” within the royal family:
Never before in Saudi history has so much power been wielded by the deputy crown prince, who is second in line to the throne. That centralization of authority has angered many of his relatives.
All of these moves had experts believe his main objective was to remove his cousin Mohammed bin Nayef from the succession line and replace him.
This past summer, King Salman named bin Salman as his heir. Saudis have come to embrace it due to bin Salman’s policies to transform the country and try to cut down on its reliance on oil. But critics in Saudi Arabia and abroad believe he could ruin the country by changing too fast:
Months of interviews with Saudi and American officials, members of the royal family and their associates, and diplomats focused on Saudi affairs reveal a portrait of a prince in a hurry to prove that he can transform Saudi Arabia. Prince bin Salman declined multiple interview requests for this article.
But the question many raise — and cannot yet answer — is whether the energetic leader will succeed in charting a new path for the kingdom, or whether his impulsiveness and inexperience will destabilize the Arab world’s largest economy at a time of turbulence in the Middle East.
Among the most concrete initiatives so far of Prince bin Salman, who serves as minister of defense, is the Saudi-led war in Yemen, which since it was begun last year has failed to dislodge the Shiite Houthi rebels and their allies from the Yemeni capital. The war has driven much of Yemen toward famine and killed thousands of civilians while costing the Saudi government tens of billions of dollars.
The prosecution of the war by a prince with no military experience has exacerbated tensions between him and his older cousins, according to American officials and members of the royal family. Three of Saudi Arabia’s main security services are run by princes. Although all agreed that the kingdom had to respond when the Houthis seized the Yemeni capital and forced the government into exile, Prince bin Salman took the lead, launching the war in March 2015 without full coordination across the security services.
Brian Katulis, who works at the Center for American Progress, met with bin Salman and said the prince’s “agenda was clear.” Bin Salman wants the world to know “that Saudi Arabia is a force to be reckoned with.”DONATE
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