Saudi Arabia is trying to drown out the noise surrounding journalist Jamal Khashoggi's death by hailing multibillion-dollar business deals for its energy and infrastructure sectors at an investment forum in Riyadh this week.
Major deals worth over $55 billion in the energy, transportation and petrochemical sectors were announced on Tuesday, the first day of the Future Investment Initiative (FII), a forum that's designed to attract business to the country — not an easy task when high-profile business leaders are boycotting the event this year.
Many of the deals announced involve Saudi Arabia's state oil company Saudi Aramco. On Tuesday, the company said it had signed 15 memorandums of understanding (or MOUs, an agreement to engage in a commercial partnership, in principle) and commercial collaborations worth $34 billion. The deals involved international partners and entities including Total, Hyundai Heavy Industries, Baker Hughes, Halliburton, and Chinese firm Norinco.
"The MOUs reflect both Saudi Aramco's and the Kingdom's international partnership strategies and the determination to diversify the economy, enhance the domestic investment environment and boost employment opportunities," Saudi Aramco said in a statement Tuesday.
Despite the agreements, all eyes are on Saudi Arabia, and its investment conference, for a very different reason — the death of Saudi journalist Jamal Khashoggi in unexplained circumstances.
The fallout from the death of the Saudi critic continues to impact diplomatic relations and business sentiment towards the Middle Eastern oil-rich powerhouse. Saudi Arabia's stock index, the Tadawul, has seen a turbulent few weeks following the death of Khashoggi, who was killed inside the Saudi consulate in Istanbul on October 2.
Saudi Arabia first denied any knowledge of his death but last weekend claimed that Khashoggi had died in a fight within the consulate. Turkish investigators allege a 15-man hit squad traveled to Istanbul to carry out the killing. On Tuesday, Turkish President Recep Tayyip Erdogan said the killing was premeditated.
U.S. President Donald Trump at first said Saudi Arabi's explanation of a fight in the consulate was credible but as a tide of incredulity toward that explanation has grown, he has changed his tune. On Tuesday, Trump said the Saudi authorities had staged the "worst cover-up ever" and that the killing had been a "fiasco."
Secretary of State Mike Pompeo said Tuesday that the U.S. is "taking appropriate actions" against Saudi Arabia, including the revoking of a handful of visas given to Saudi nationals.
A number of high-profile business and political leaders pulled out of attending the FII, including J.P. Morgan CEO Jamie Dimon, BlackRock CEO Larry Fink, Blackstone CEO Stephen Schwarzman and Mastercard CEO Ajay Banga, as well as media sponsors like The New York Times, CNBC, and CNN.
The FII was dealt another blow on Tuesday when the CEO of technology investment firm SoftBank also pulled out of a speech at the conference, according to The Wall Street Journal. Problematically, Saudi Arabia's Public Investment Fund is the largest investor in SoftBank's $100 billion "Vision Fund" having committed $45 billion the fund.
Siemens CEO Joe Kaeser decided to pull out of attending the conference too, delaying the signing of a power-plant contract that could be worth up to $20 billion, Bloomberg reported Tuesday citing unnamed sources familiar with the matter.
Last year's FII was a very different affair with a high level of prominent business leaders and heads of state. It was so well attended, in fact, that it was called the "Davos in the Desert." Davos is the alpine town where the World Economic Forum (WEF) is held every January. Needless to say, with the bad press Saudi Arabia is receiving at the moment, WEF objected this week to the FII being associated (albeit in nickname only) with its Davos "brand."
Not everyone has abandoned Saudi Arabia as a business destination with delegates from Russia and China in attendance, as well as Saudi Arabia's neighbors including the United Arab Emirates and Bahrain.
"For us, it's important to recognize that Saudi Arabia has made a great transformation over the last three, four years under the leadership of the King (Salman) and Crown Prince Mohammed bin Salman," Kirill Dmitriev, the chief executive of Russia's sovereign wealth fund, RDIF, told CNBC on Tuesday, adding that Khashoggi's death should be viewed as "separate" from the Saudi leadership.
Saudi Oil Minister Khalid Al-Falih told the conference Tuesday that the kingdom was experiencing "difficult days" as a result of the Khashoggi killing
"These are difficult days for us in the Kingdom of Saudi Arabia. We are going through a crisis, of sorts, resulting from the very regrettable and abhorrent incident that took place in Turkey," he told an audience at the FII.
"Nobody in the kingdom can justify or explain it (Kashoggi's death) and from the leadership down, we're very upset about what has happened," Al-Falih said. "But the kingdom is in the midst of a historic transformation of unprecedented proportions … (and) that will not be stopped."