Luxurious Detention

What’s happening in Saudi Arabia?

Saudi Emblem. Public Domain. Source: Wikipedia

Over the weekend the Saudi government detained dozens of the country’s most powerful princes, military officers, businessmen, and government officials. Included in the sweep is prince al-Waleed bin Talal, one of the world’s wealthiest individuals, worth over $16 billion, by some reports. Also taken into custody were two sons of the late King Abdullah, who might have been considered possible rivals to Crown Prince Mohammed bin Salman. A committee has now been established with broad powers to investigate cases, issue arrest warrants, and seize assets. Reports indicate that the many of the detained officials are being held in the five-star Ritz-Carlton, Riyadh, which is no longer taking reservations.

Ritz-Carlton, Riyadh. Source: Ritz-Carlton

The Saudis claim that this is part of an anti-corruption campaign, consistent with bin Salman’s promise to increase transparency, wean their economy from its dependence on oil, and enact free market reforms – reforms needed to attract greater international investment. But it also consolidates bin Salman’s control of the county’s military, media, and economy.

In many ways, this is a classic power move among oligarchs, with one faction asserting control over the others. Mohammed bin Salman’s rise to power has been faster than most observers expected, and he has been critical his ultra-conservative oil-rich homeland. But if he wants to attract foreign investors, detaining domestic ones is an unorthodox way to start.

Douglas R. Tengdin, CFA

By |2017-11-06T08:00:06+00:00November 6th, 2017|Global Market Update|0 Comments

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Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. - Leave a comment if you have any questions—I read them all! - And Follow me on Twitter @GlobalMarketUpd

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