“... Are we on the cusp of yet another rise in geo-political risk in the Middle East?
It looks that way, and the implications for global markets could be massive.
There are some major issues going down in Saudi Arabia right now. About a week ago, Crown Prince Mohammad bin Salman ordered the arrest of some of the most powerful ministers and princes in the country.
Mohammad bin Salman, or ‘MBS’ as he is known, is the son of the 83-year-old Saudi King Salman. He is the architect behind the Vision 2030 project, a hugely ambitious plan to develop the Saudi economy and move it away from its dependency on oil.
Part of that plan is to sell 5% of the state owned oil company, Saudi Aramco, for around US $100 billion.
Just a few weeks ago, the Ritz Carlton in Riyadh hosted some of the world’s top bankers and finance types, as MBS sold his vision for a modern Saudi Arabia.
Soon after they left, the Ritz Carlton ‘hosted’ hundreds of Saudi elite, arrested on corruption charges by MBS, who many expect to soon be the King.
Saudi Arabia has an extremely complex ruling system. I don’t pretend to understand it. But it’s potentially in a very fragile state right now.
The arrests that MBS recently ordered go all the way to the top of the business elite and the royal family itself. Alwaleed bin Talal is perhaps the biggest scalp. He is the grandson of Ibn Saud, the modern founder of Saudi Arabia, and perhaps the richest man in the Kingdom.
There’s no doubt there will be backlash.
MBS is trying to send a message that if the Saudi state wants to modernise and move away from oil dependency, it must move away from endemic corruption, and away from the perception that corruption exists on a grand scale.
The country is a relatively young one. MBS is therefore betting on social support for his reforms and crackdown on the elites who benefit most from the Saudi social structure. ...”
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