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Saudi Arabia signs deals worth US$50b at investment event despite boycott

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European lawmakers are likely to push for “targeted sanctions” against the killers and also for an EU-wide ban on the export of arms to Saudi Arabia following the death of Saudi journalist Jamal Khashoggi.

Riyadh

SAUDI Arabia signed deals worth US$50 billion on Tuesday, showing it can still attract investment at a conference boycotted by Western politicians and global business chiefs after the killing of journalist Jamal Khashoggi even as European Union (EU) lawmakers are due to push for targeted sanctions.

Saudi Arabia signed a total of 25 deals in the oil, gas, industries and infrastructure sectors with firms such as Trafigura, Total, Hyundai, Norinco, Schlumberger, Halliburton and Baker Hughes.

Saudi Aramco said it signed 15 memoranda of understanding worth US$34 billion.

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Total chief executive Patrick Pouyanné, a panelist on Tuesday, said the French oil and gas producer would announce a retail network in the kingdom with Saudi Aramco.

The managing director of the kingdom's sovereign wealth fund, the main backer of the event, said the country was becoming more transparent and that the Saudi Public Investment Fund (PIF) continued to develop new industries under economic reforms launched by Crown Prince Mohammed bin Salman.

Yasir al-Rumayyan said the fund has invested in 50 or 60 firms via SoftBank Group's Vision Fund and would bring most of those businesses to the kingdom. PIF has committed to invest US$45 billion in Vision Fund.

Many Western banks and other companies, fearful of losing business such as fees from arranging deals for Saudi Arabia's US$250 billion wealth fund, sent lower-level executives even as their top people stayed away.

Top executives of Asian firms have been hesitant to pull out, so the participation of Chinese and Japanese institutions may help Riyadh claim the three-day conference as a success.

For these reasons, the Western boycott may have little long-term impact on Saudi economic prospects.

Foreigners sold a net 4.01 billion riyals (S$1.5 billion) of Saudi equities last week, by far the biggest pull-out of overseas money since the stock market opened to direct foreign investment in mid-2015.

About 320 foreign institutions have registered as qualified foreign investors in the Saudi stock market and 200 more are expected to register, the exchange's chairwoman told the event.

The event is being held at the Ritz-Carlton in Riyadh, where scores of princes, businessmen and officials were detained in a crackdown on corruption soon after last year's conference ended, unnerving investors and raising concern about transparency.

Prince Mohammed arrived at the investment conference late in the day after attending a meeting at which King Salman received members of Mr Khashoggi's family, including his son Salah.

Many in the audience of over 2,000 clapped or cheered as the prince, the kingdom's de facto ruler and architect of its reform drive, entered the main hall, smiling as he sat down.

Earlier, Energy Minister Khalid al-Falih assured the investment conference that the world's top crude exporter was passing through a "crisis of a sort" but would power ahead with economic reforms.

The chief executive of Saudi Aramco said the government remained committed to a partial flotation of the oil giant but that the timing would depend on market conditions and other factors.

European lawmakers will vote on Thursday on a parliamentary resolution on Mr Khashoggi's killing. According to a draft of the non-binding resolution seen by The Washington Post, some European lawmakers are likely to push for "targeted sanctions" against the killers and also for an EU-wide ban on the export of arms and security equipment to Saudi Arabia.

In a telephone interview with the Post on Saturday, US President Donald Trump reiterated his refusal to consider sanctions on Saudi Arabia and noted what he insists is a US$110 billion arms deal with the Saudi government.

Germany became the first Western government to suspend future arms sales to Saudi Arabia after Chancellor Angela Merkel told reporters that "arms exports can't take place in the current circumstances".

Mrs Merkel's move followed a joint statement from the German, French and British foreign ministries highlighting an "urgent need for clarification" on what happened to Mr Khashoggi, a Washington Post contributing columnist, once he entered the Saudi consulate in Istanbul on Oct 2.

Western European countries are no strangers to their own Saudi arms deals: Britain and France are the kingdom's two largest respective exporters after the US, albeit at significantly smaller levels. In any case, the apparent willingness in Paris, Berlin and London to risk these economic benefits - in word if not in deed - is a rare occurrence, political analysts said.

As for why Mr Khashoggi's killing has resonated to such a strong degree in Europe, Francois Heisbourg - a former French presidential adviser on national security and a Paris-based security expert - said that one possible explanation was the memory of the Hariri case from November 2017, when Lebanon's Saudi-born Prime Minister Saad Hariri was detained in Riyadh, where he announced on Saudi state television his intent to resign.

Mr Hariri, a French citizen, was permitted to leave the country only after the intervention of French President Emmanuel Macron. Once outside Saudi Arabia, Mr Hariri withdrew his earlier statement on a pending resignation. REUTERS, WP