* Big Riyadh conference to showcase reforms, seek investment
* Crown Prince Mohammed bin Salman to address meeting
* His reforms are cutting budget deficit, removing red tape
* But austerity policies have pushed economy into recession
* Privatisation, investment schemes face obstacles
RIYADH, Oct 24 (Reuters) - With low oil prices and austerity pushing Saudi Arabia into recession, the government may struggle to persuade international business leaders this week to pour billions of dollars of badly needed investment into the kingdom.
Crown Prince Mohammed bin Salman, the 32-year-old architect of reforms designed to end Saudi Arabia's reliance on oil exports, will make a rare public address to hundreds of bankers, businessmen and government officials from around the world at a three-day conference starting on Tuesday.
Arranged by Saudi Arabia's main sovereign wealth fund, the $180 billion Public Investment Fund (PIF), the event is labelled the Future Investment Initiative - an effort to present the world's top oil exporter as a leading global investment destination.
Four thousand people have registered to attend the event at an opulent Riyadh conference centre, and the scheduled speakers control assets worth $22 trillion, the PIF estimates.
In some ways, Prince Mohammed has a strong story to tell. He has taken politically brave steps, such as public sector pay cuts and the introduction of new taxes, to begin cutting a massive state budget deficit that totalled $98 billion in 2015.
Officials hope a privatisation programme, including the sale of 5 percent of oil giant Saudi Aramco, will raise $300 billion. Riyadh is cutting red tape and removing barriers to investment; on Sunday, it said it would let strategic foreign investors own more than 10 percent of listed Saudi companies.
The PIF, which once operated as a sleepy holding company for state-owned enterprises, is being pressed into service to jump-start tens of billions of dollars of projects in non-oil sectors such as real estate development, recycling and technology.
One of Prince Mohammed's biggest reforms is last month's decision to remove a ban on women driving. This could reshape Saudi society. Just removing the need for women to hire foreign chauffeurs could save Saudis billions of dollars.
RESISTANCE TO REFORMS
"A few years ago, when oil was high, we were a rich country but nothing was happening, nobody was interested," a senior executive at a major Saudi investment firm told a meeting in Dubai last week.
"Now we're not as rich but foreign investors are more interested because of the opportunities that have been created.
Other aspects of the reforms are troubling, however. Austerity helped push the economy into recession in the second quarter of 2017, official data showed; consumer prices are falling and unemployment among Saudis has reached 12.8 percent.
Few state assets have actually been sold, partly because of uncertainty over legal protections for investors, and it is not clear that private Saudi companies have the money or the courage to invest in projects alongside the PIF as the government hopes.
The Saudi executive conceded there was resistance to the reforms in some parts of the government bureaucracy, and that investors seeking to lay off staff at state firms which they bought could find that politically difficult.
Attracting more foreign investment would ease pressure on Saudi Arabia. But foreigners are cautious towards the kingdom's non-oil sector, partly because of the economic slump; foreigners own only about 4.5 percent of the local stock market, compared to double-digit shares in many other emerging markets.
Foreign investors attending a conference on Saudi Arabia organised by JP Morgan in New York this month were very interested in individual firms that might benefit from economic reforms, the U.S. investment bank said. But they were "not too optimistic" on the outlook for the Saudi economy as a whole.
(Reporting by Andrew Torchia; Editing by Richard Balmforth)