Tag Archives: Khashoggi murder by Saudi Arabia

Will Saudi Arabia Own the United States?

In the coronavirus pandemic’s financial fallout, Saudi Arabia’s $300 billion sovereign-wealth fund has emerged as one of the world’s biggest bargain hunters, taking minority stakes worth billions of dollars in American corporations.  Saudi Arabia’s Public Investment Fund  (PIF)  in the first quarter of 2020 bought shares valued at about half a billion dollars each in Facebook, Walt Disney,  Marriott International,  and Cisco Systems.  The fund bought financial stocks, investing $522 million in Citigroup, and $488 million in Bank of America while also spending $714 million on a stake in Boeing…Crown Prince Mohammed bin Salman, the kingdom’s day-to-day ruler, tasked the sovereign-wealth fund in 2015 with diversifying the country’s economy away from oil by investing in companies and industries untethered to hydrocarbons.

PIF’s recent buying spree highlights a bold strategy of piling into global stocks even as the novel coronavirus and a crash in oil prices mean that Saudi Arabia’s financial position is now the most precarious in a decade. The Saudi government in May 2020 tripled its value-added tax rate and cut subsidies to state employees as it contends with lower oil revenue and an economy weakening under coronavirus lockdown.

Many of the stocks that PIF has targeted are trading at historic lows, bruised by the fallout from the coronavirus and rock-bottom oil prices that have battered stocks of energy companies in 2020. Teh PIF bought in 2020 undisclosed stakes in a bevy of energy companies, including Equinor (Norway), Royal Dutch Shell, Total (France) and Eni (France). The PIF invested $484 million in Shell, $222 million in Total and previously unreported stakes of $828 million in BP $481 million in Suncor Energy and $408 million in Canadian Natural Resources.

It also purchased shares valued at roughly $80 million each in: Warren Buffett’s Berkshire Hathaway; chipmakers Broadcom and Qualcom ; IBM; drugmaker Pfizer;  Starbucks; railroad company Union Pacific; outsourcer Automatic Data Processing; and Booking.com….On top of the stakes in public companies, PIF is also awaiting regulatory approval for a roughly £300 million ($363 million) buyout of U.K. Premier League soccer team Newcastle United.

Excerpts from Rory Jones and Summer Said, Saudi Sovereign-Wealth Fund Buys Stakes in Facebook, Boeing, Cisco Systems, WSJ, May 18, 2020

After Khashoggi: the Saudi Missiles

Satellite images suggest that Saudi Arabia has constructed its first known ballistic missile factory, according to weapons experts and image analysts, a development that raises questions about the kingdom’s increasing military and nuclear ambitions under its 33-year-old crown prince.  If operational, the suspected factory at a missile base in al-Watah, southwest of Riyadh, would allow Saudi Arabia to manufacture its own ballistic missiles, fueling fears of an arms race against its regional rival Iran.  Saudi Arabia currently does not possess nuclear weapons, so any missiles produced at the apparent factory are likely to be conventionally armed. But a missile-making facility would be a critical component of any eventual Saudi nuclear weapons program, hypothetically giving the kingdom capability to produce the preferred delivery systems for nuclear warheads.

Two additional missile experts who reviewed the satellite images for The Washington Post… agreed that the high-resolution photographs of the al-Watah site appear to depict a ­rocket-engine production and test facility, probably using solid fuel…The complex…highlights the nation’s intention to make its own advanced missiles after years of seeking to purchase them abroad, at times successfully….

Saudi Arabia has been pursuing a nuclear power-plant deal with the United States that would potentially include allowing it to produce nuclear fuel. The kingdom’s insistence on domestic fuel production has raised worries among U.S. officials that the kingdom wants the atomic power project not only for civil use but also for covert weapon-making purposes. ..

How the Saudis obtained the technological expertise necessary to build the facility is unclear. One potential supplier: China…China has sold ballistic missiles to Saudi Arabia in the past and has helped supply ballistic missile production capabilities to other nations. In the 1990s, Pakistan secretly built a plant for medium-range missiles using blueprints and equipment supplied by China. The factory in Pakistan has long drawn the attention of top Saudi officials. ..

The main way the United States seeks to prevent the spread of drone and missile technology is through the Missile Technology Control Regime, or the MTCR, an informal multicountry pact designed to prevent the transfer of certain missile technologies. China is not a member but has agreed to abide by some of its stipulations.   While the United States sells an array of weaponry to Saudi Arabia, Washington has not sold ballistic missiles to Riyadh, in part because such missiles traditionally have been seen as destabilizing for the region. Saudi Arabia has turned to China in the past when met with refusals from the United States for certain weapons requests.

For example, the United States declined repeated Saudi requests to purchase what are known as category-one American drones, including Predators and Reapers, partly because of MTCR’s regulations. Instead, the kingdom turned to China, first purchasing drones and later striking a deal in which China will build a drone factory that will produce a Chinese copycat of the Predator in Saudi Arabia.

Excerpts Paul Sonne, Can Saudi Arabia produce ballistic missiles? Satellite imagery raises suspicions, Washington Post, Jan. 22, 2019