Several years from now, an American executive who flew to Saudi Arabia could get off the airlines established by sovereign wealth funds and ordered Uber, a company where the same funds have 4% shares. Taken across the capital, the executive might examine the boutique hotel in a used palace, which is also owned by public investment funds.
Attending the PIF Annual Conference, they can take a sip of coffee planted through a business led by the funds, then sign an agreement with a defense company owned by PIF. That night, the executive might watch dinner and movies in a complex developed by his entertainment arm, flying home without touching a single business that is not related to PIF.
As the crown prince Mohammed bin Salman competed to diversify the economy that depends on Saudi Arabian oil, PIF $ 620 billion – which he seats – is the center of attention, replacing the pedigreed business class to become one of the most powerful institutions in the economy that changes rapidly.Receding is a conservative Islamic empire from a long time, which lives from its oil income while investing carefully in a safe US treasury and disbursing profitable state contracts. This is Saudi Inc. And its own -style founder tore up the rules.
Within five years, PIF became the main international investor, taking US blue chips like Uber and investing in electric cars. It was also made into sports, buying a Newcastle United English soccer team and investing $ 200 million in an international golf business.
It was given by MBS, as the author of De facto was known, more influence on the international stage, with Western officials who sought the largest oil exporting in the world to help experience inflation and pour petrodollars into the stuttered world economy. US President Joe Biden will visit Riyadh in mid -July, forced to rethink his promise to turn SBM into “Paria” for the 2018 Washington Post Columnist Murder Jamal Khashoggi.
But at home that PIF made the biggest impact, changing the economy with the brand of state capitalism. PIF aims to invest at least $ 40 billion per year in Saudi Arabia and have created 54 new companies, branching into sectors from real estate to luxury cruise ships.Critics say it is part of the extensive accumulation of power that Prince Mohammed, 36, controls oil policies, security, domestic and foreign affairs, critics who are imprisoned and silenced independent sounds. The Saudi executive also raised concerns, initially said they felt crowded by the entity that was so rich and connected a little that could compete.
“SBM is not too concerned with the structure of the Saudi Arabia or Saudi business and wants to build new Saudi Arabia,” said Steffen Hertog, a professor at the London School of Economics. “He was completely renewed (it was PIF) and turned it into the main vehicle for diversification strategies, passing most well -established and more clearly, well -established government.”
Founded in 1971 as part of the Ministry of Finance, PIF was initially charged with providing loans to develop the economy and have a significant percentage of the Saudi stock market but is slightly known abroad.Then, in March 2015, the funds were “born again,” the website stated, and was placed under MBS.In the midst of thousands of princes who filled his rapiten world, MBS saw himself as a nuisance. It was only 29 years old when his father became king, he looked at technology entrepreneurs such as Steve Jobs and Mark Zuckerberg as role models, he said to Bloomberg in 2016. “If I work according to their method, what will I make?”
When the prince began to expand his authority with enthusiasm, PIF became the main tool, giving him the opportunity to run a newer Saudi Arabia more like a technology startup than a slow moving bureaucracy.Several years from now, an American executive who flew to Saudi Arabia could get off the airlines established by sovereign wealth funds and ordered Uber, a company where the same funds have 4% shares. Taken across the capital, the executive might examine the boutique hotel in a used palace, which is also owned by public investment funds.Attending the PIF Annual Conference, they can take a sip of coffee planted through a business led by the funds, then sign an agreement with a defense company owned by PIF. That night, the executive might watch dinner and movies in a complex developed by his entertainment arm, flying home without touching a single business that is not related to PIF.
As the crown prince Mohammed bin Salman competed to diversify the economy that depends on Saudi Arabian oil, PIF $ 620 billion – which he seats – is the center of attention, replacing the pedigreed business class to become one of the most powerful institutions in the economy that changes rapidly.Receding is a conservative Islamic empire from a long time, which lives from its oil income while investing carefully in a safe US treasury and disbursing profitable state contracts. This is Saudi Inc. And its own -style founder tore up the rules.Within five years, PIF became the main international investor, taking US blue chips like Uber and investing in electric cars. It was also made into sports, buying a Newcastle United English soccer team and investing $ 200 million in an international golf business.
It was given by MBS, as the author of De facto was known, more influence on the international stage, with Western officials who sought the largest oil exporting in the world to help experience inflation and pour petrodollars into the stuttered world economy. US President Joe Biden will visit Riyadh in mid -July, forced to rethink his promise to turn SBM into “Paria” for the 2018 Washington Post Columnist Murder Jamal Khashoggi.But at home that PIF made the biggest impact, changing the economy with the brand of state capitalism. PIF aims to invest at least $ 40 billion per year in Saudi Arabia and have created 54 new companies, branching into sectors from real estate to luxury cruise ships.
Critics say it is part of the extensive accumulation of power that Prince Mohammed, 36, controls oil policies, security, domestic and foreign affairs, critics who are imprisoned and silenced independent sounds. The Saudi executive also raised concerns, initially said they felt crowded by the entity that was so rich and connected a little that could compete.
“SBM is not too concerned with the structure of the Saudi Arabia or Saudi business and wants to build new Saudi Arabia,” said Steffen Hertog, a professor at the London School of Economics. “He was completely renewed (it was PIF) and turned it into the main vehicle for diversification strategies, passing most well -established and more clearly, well -established government.”Founded in 1971 as part of the Ministry of Finance, PIF was initially charged with providing loans to develop the economy and have a significant percentage of the Saudi stock market but is slightly known abroad.
Then, in March 2015, the funds were “born again,” the website stated, and was placed under MBS.In the midst of thousands of princes who filled his rapiten world, MBS saw himself as a nuisance. It was only 29 years old when his father became king, he looked at technology entrepreneurs such as Steve Jobs and Mark Zuckerberg as role models, he said to Bloomberg in 2016. “If I work according to their method, what will I make?”When the prince began to expand his authority with enthusiasm, PIF became the main tool, giving him the opportunity to run a newer Saudi Arabia more like a technology startup than a slow moving bureaucracy.
Sitting near the Riyadh Villa Modernist pool, the executive compared the last few years by “driving a tsunami,” by saying he had to manage his own business more aggressive but had adapted and survived.In Davos in 2018, Minister of Finance Mohammed Al-Canstikan responded to Alshaya by saying the funds created an ecosystem for the private sector to join.
“What the government does is see the sector, industry, specific investment that is too large for the private sector to take risks, or new,” he said.Many referred to the purchase of PIF from controlling shares in the US Lucid Motors electric car as an example of how he incubated the non-miny industry that would not go down from the ground. Saudi Arabia struggled for years to persuade car manufacturers to open facilities in the country, but Lucid signed an agreement in February to do that, potentially creating a way for others.
PIF said in the statement that was held that they act as “foundation investors” to enable and “crowds’ of the private sector. The funds say they invest in 13 sectors identified have the potential to provide regional and global competitive advantages, resulting and accelerate the transfer of knowledge into the kingdom.
The country plays an important role in building an economy throughout the world, including power plants such as China and South Korea. But both of them started their industrialization as low -income people, with a larger population and cheaper local labor, economists said. Saudi Arabia is already a middle to upper income country, and there is no precedent to make an economy that depends on oil while maintaining a standard of living.”This is good as a force for incubation, as a power for transformation,” said Karen Young, a senior at the Middle East Institute in Washington “The question is: When did you retreat?”
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