Turns out murdering journalists isn’t a great way to get foreign investment for your pet projects. Who’da thunk it?
What it means: Saudi Arabia has just confirmed that Jamal Khashoggi, who was critical of the Saudi government, was murdered. (He disappeared from the Saudi embassy in Turkey). That’s not a good look for Prince Mohammed bin Salman, who goes by the jazzy name MBS and is seen as the person who makes all the important decisions in Saudi Arabia. The Saudi government is insisting Khashoggi was murdered by some bad men gone rogue and has nothing to do with MBS, but not everyone believes that.
The problem for MBS is that he had this big ambitious plan to juice up his country’s economy through lots of foreign investment (where companies and rich people from outside Saudi Arabia put money into the country in the hope of making a profit) and using skills and technology from abroad. That’s now kinda been put on ice while everyone decides whether they want to work with a maybe-murderer or not.
Even before Khashoggi’s death, foreign investment in Saudi Arabia had fallen from $7.45 billion (in 2016) to $1.42 billion (in 2017) because MBS and his government kept doing things like locking businesspeople up for crimes as slight as reading “rumours” on the web. Things are likely to get worse: lots of big names in business and journalism have already said they’re no longer going to go to a fancy investment conference Saudi Arabia is hosting this week.
But Saudi Arabia isn’t going to go broke anytime soon (it owns about 16 percent of the oil in the world, which we all need to buy for our cars and planes and stuff). And it is still an important source of money and power, which might make people reluctant to punish it too much. America, for example, is selling $110 billion-worth of weapons to Saudi Arabia, and wants its help in stopping Iran from misbehaving.
Read our explainer on foreign direct investment.
We’ve moved beyond a world where your country was all that matters. Our economies have become bigger than we realise. Things we use are less and less likely to come from our own country and more likely to have been imported from a country across the globe – this has become so normal that we’ve forgotten what a huge implication this has for how our economies work…