Saudi anti-corruption drive signals intent of ‘moving forward’ with reform

November 26, 2017
Wave of support. Saudi men stand in front of a poster of Saudi Crown Prince Mohammed bin Salman bin Abdulaziz in Riyadh, on November 15. (AFP)

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.