Riyadh (GPA) – The government of Saudi Arabia seems to be offering a chance for royal family members arrested during the recent “anti-corruption sweep” to buy their way out of the Riyadh Ritz in a ‘freedom for assets’ swap.
Reports have begun to emerge that the Saudi government has begun to approach some of the royal family members arrested in the corruption crackdown earlier this month. According to sources inside the kingdom, the billionaire relatives of King Mohamed Bin Salman (MBS) have been offered a way out of their detention in exchange for up to 70% of their business fortunes.
According to sources who spoke to some western outlets, the deal would likely split the detained royals cash and personal property from their business assets and redistribute portions of each into government coffers. The list of figures this deal is being offered to includes some of the wealthiest men in Saudi Arabia such as Prince Alwaleed bin Talal.
The Saudi government has yet to comment on the specifics of this strange plea bargaining process but it has been noted that the policy of the government has shifted from freezing accounts to “expropriation of unencumbered assets.”
Despite the Saudis wish to keep this new arrangement quiet it seems there is already some evidence of this policy in effect when it comes to men like Prince Alwaleed, who has massive investments in everything from banking to media to real estate. It has already been reported that some hotels owned by Alwaleed’s Kingdom Holding company in Lebanon are already up for sale.
There have also been reports of similar cases of officials bank accounts being emptied of billions of dollars as well as shares in multinational businesses being handed over to the government. One former high official who was arrested earlier this month was allegedly forced to sign over $1 billion in stock to the state.
While this may seem like an aggressive move, western financial markets see this as good news following the hasty arrests and unclear plans for the detainees’ assets. While the markets initially saw some uncertainty following the corruption crackdown the seizure of these assets, coupled with the new Saudi economic policies that will sell everything that isn’t nailed down, means a lot of this capital is likely to end up in the hands of anyone who can afford it.
Due to the current situation in Saudi Arabia, MBS isn’t just worried about high-level opposition to his new policies that could steal power back from him. The Saudis also have a large population of middle-class citizens they need to buy off with tax breaks and subsidies.
While it’s likely these Saudis will find themselves opposed to MBS’s major Saudi Vision 2030 reform scheme, the kingdom is more concerned about keeping them docile in the short term. This has proven to be an increasingly daunting task for Riyadh after sharp declines in oil prices which have caused the kingdom’s national debt to rise from around $378.6 billion in 2015 to $843.9b in 2016.
For now, it seems as if the Crown Prince is pulling off his attempts at balancing the power struggles both at the official level and below. However, MBS is likely to face further pushback as he enacts further “reforms” and moves Saudi Arabia further towards a privatization-friendly neoliberal economy.