Saudi anti-corruption drive signals intent of ‘moving forward’ with reform
London- Saudi Arabia’s anti-corruption crackdown is likely to retrieve $100 billion in settlements for the state but as there is no way to root out all corruption, the move serves as a warning signal against illegal gains in the future, said Crown Prince Mohammed bin Salman bin Abdulaziz.
“You have to send a signal, and the signal going forward now is, ‘You will not escape.’ And we are already seeing the impact,” he said in an interview with The New York Times columnist Thomas Friedman.
“The calculation of our experts is that roughly 10% of all government spending was siphoned off by corruption each year [from the 1980s until today],” said the crown prince.
He said said past attempts to crack down on corruption in Saudi Arabia failed because they started from the bottom up but that changed when his father, King Salman bin Abdelaziz Al Saud, came to power.
“My father saw that there is no way we can stay in the G-20 and grow with this level of corruption. In early 2015, one of his first orders to his team was to collect all the information about corruption — at the top. This team worked for two years until they collected the most accurate information, and then they came up with about 200 names.”
These 200 people — which include members of the royal family, government officials and businessmen — are being held in five-star hotels, including Riyadh’s Ritz- Carlton, where they are negotiating their release in exchange for giving back some of the money that they allegedly obtained through corruption.
“The investigation committee is aiming for about 70% of the total ill-gotten money, rather than the entire money,” an unnamed senior Saudi adviser told the Wall Street Journal.
“Much of the detainees’ wealth is held in accounts overseas, which would make any involuntary seizure by the Saudi government through legal channels difficult,” the newspaper reported.
Those who cooperate in the investigation are expected to be released without charge.
“Senior officials conducting this crackdown say it’s not a formal investigation yet, they call it a ‘friendly process’,” said BBC’s Lyse Doucet after a visit to the Ritz-Carlton hotel.
The anti-corruption crackdown also has implications for foreign investors.
“Bankers say investors want reassurances that capital deployed in the kingdom will be safe. Private bankers say Arab money is now flowing into Switzerland at the fastest pace since 2011 when popular uprisings swept across the Middle East,” wrote Simeon Kerr in the Financial Times.
In the long run, however, transparency will offer a better investment climate, observers said.
“There is a wait-and-see attitude now among investors,” Nasser Saidi, a former Lebanese economy minister, told the Financial Times. “But there are always short-term costs when you start an anti-corruption drive. It is necessary and welcome. You want transparency and clean procurement systems,” he added.
Nationally, the anti-corruption drive has garnered much public support.
“At a time when years of low oil prices have raised the spectre of austerity in the kingdom, the government’s announcement that it had recovered billions of dollars in public funds from the accused, who had ferreted them away through graft and bribery, may come as a welcome sign that at least some of the rich and powerful will be forced to pay their fair share,” wrote Andrew Leber and Christopher Carothers in Foreign Affairs.
The message of Crown Prince Mohammed bin Salman bin Abdulaziz is likely to remain clear if the bid to root out corruption continues.
“If there is no backpedalling on the arrests of elites, the crackdown continues deeper into the state, and [Crown Prince Mohammed] backs clear rules against official malfeasance, then we have cause to believe the crown prince is serious about combatting corruption. Only then will we know whether these purges were just a vigorous spring cleaning or a reformer’s opening salvo,” said Andrew Leber and Christopher Carothers.
Indeed, the same can be said of the crown prince’s other reform bids.
“[Crown Prince Mohammed] is riding a wave of support from young Saudis sympathetic to his bid to tackle corruption and reform a system perceived as sclerotic and tradition-bound,” wrote Ruth Citrin in the website of the European Council on Foreign Relations (ECFR) think-tank.
“However he now has to deliver not only on the headline-grabbing promises — privatisation, development, openings for women, and moderation of the state’s approach to Islam — but on the array of domestic regulatory, legal, and institutional reforms as well as belt-tightening measures that underpin them,” she added.