Saudi crown prince Muhammad bin Salman has attained his objective of raising $100 billion (€80 billion) in his anti-corruption campaign by detaining princes, ministers and businessmen and extracting ill-gotten gains.
Last November, 381 high-profile figures were confined to the luxury Ritz-Carlton Hotel in Riyadh, where they were accused of money laundering, bribery or extortion and interrogated on the sources of their wealth.
About 90 were released after questioning, 55 moved to secure locations for further investigation and the remainder freed after handing over cash, shares in firms, stocks and property to the treasury.
Among the last detainees to capitulate were billionaire prince Alwaleed bin Talal and television mogul Waleed al-Ibrahim. The government had, reportedly, demanded $6 billion from Bin Talal, whose worth is estimated at $17 billion, including investments in Amazon, Apple and Twitter.
Before his arrest, Ibrahim had been pressurised by the crown prince to cede control of his Dubai-based Middle East Broadcasting company.
While the anti-corruption campaign reached its target, the sum is unlikely to make much of a difference to Saudi Arabia's finances. Nicolas Pelham, writing in the New York Times on January 24th, pointed out that the crown prince's exactions "would cover only his budget deficit [for] 2015 or equal the sum he hoped to raise from selling 5 per cent of the Saudi oil company, Aramco".
Shakedown
The shakedown is certain to make the crown prince hundreds of enemies, but it is popular with many Saudis who have decried corruption and criticised high-spending princes.
The regime intends to clinch public support by announcing $13 billion in bonus payments for civil servants, 70 per cent of the Saudi workforce, and a monthly allowance of $266 for 2018. Students, soldiers, and first home buyers are also set to secure benefits.
These payments are intended to compensate Saudis for a 5 per cent sales tax and an 80 per cent rise in petrol prices. Securing a slice of the cake snatched from the wealthy could give middle-class and poor Saudis a sense of satisfaction. While combating corruption by squeezing wealthy Saudis is unprecedented, courting the populace with payouts is traditional.
The crackdown initially frightened potential investors in the crown prince’s plan to diversify and restructure the kingdom’s oil-dependent economy, while uncertainty over when and where to list Aramco’s share offer continues to unsettle likely buyers.
Aramco seems a better bet than non-oil ventures, however: oil provides 92 per cent of government revenue, 97 per cent of export earnings, and more than half of GDP.
Tradition
The crown prince is also sticking to tradition by focusing on mega-projects: a sports and entertainment city, a vast tourist resort, and a robot city – none of which benefit the populace at large.
While money is to be provided by the public investment fund, which he heads, there is no doubt these projects are intended to glorify him, boost his personal fortune and complete a transformation from family reign by consensus into one-man rule.
The crown prince has exhibited his progressive side by permitting women to drive and attend football matches, but has refused to alienate conservatives by ending male guardianship, which forces women to obtain permission from male relatives to receive medical treatment, attend university, marry, divorce and travel abroad.
While wealthy detainees in the Ritz-Carlton Hotel captured global headlines, Human Rights Watch has called on the international community to take notice of dozens of people, including prominent clerics and political activists, who were arrested last September.
They are now serving long prison sentences for criticising the authorities and calling for political and civil rights reforms, and an end to discrimination against women and religious minorities.