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President Biden this week tried to notify Saudi Arabia that he was partnering with Russia on a major production cut by oil cartel OPEC Plus.
“What they did to Russia will have consequences,” he told CNN.
But those harsh words appear to have deterred Jamie Dimon and other American corporate leaders from a Saudi-sponsored business conference in Riyadh this month (popularly known as Davos in the Desert). not.
JPMorgan Chase CEO Dimon is listed as a featured speaker on the conference website and will continue to attend. So did Blackstone’s Steve Schwartzman, hedge fund Bridgewater Associates’ Ray Dalio and Boeing’s international executive Michael Arthur.
The presence of high-profile business executives highlights the limits of US efforts to punish Saudi Arabia for exceeding US policy goals. This is yet another example of how multinationals can get caught up in the backlash of international politics and come under severe scrutiny.
Multinational corporations like Apple have been accused of generating billions of dollars in sales in China while remaining silent on human rights abuses in the country. Criticizing major financial institutions For sending its chief executive to Hong Kong next month for a conference attended by Hong Kong chief executive John Lee.
And when many companies ceased operations in Russia after Russia’s invasion of Ukraine, some were criticized for not shutting down quickly enough, others said their products basically what you need For civilians.
Business executives do not always receive guidance from government officials and are forced to meet their business goals under the sometimes-changing interpretation of U.S. policy.Former President Donald J. Trump , sought to forge closer ties with Riyadh. During the campaign, Mr Biden promised to make Saudi Arabia an international “pariah”, but as part of an effort to make Saudi Arabia more upbeat, he visited Saudi Arabia to meet de facto leader Mohammed bin Bin. I slammed my fist into Prince Salman. oil.
The role of business in geopolitics is becoming more complex as more companies make social advocacy part of their core mission. Environmental, social and corporate governance goals, or ESG-focused movements, are becoming increasingly popular, implicitly positioning companies and their managers as moral his leaders.
Saudi Arabia in particular has forced companies to strike a delicate balance, especially in recent years. The kingdom, the world’s largest oil producer, is cash-rich, and its sovereign wealth fund, the Public Investment Fund, oversees more than $600 billion of his money, which he invests overseas in the likes of his Uber and SoftBank in Japan. Investing.
The Sovereign Fund helped create LIV Golf, intended to venture onto the PGA Tour, and led the group that acquired English football club Newcastle United.
Prince Mohammed has also brought in international companies to help deliver on Vision 2030, his sweeping effort to open up Saudi society and reduce its dependence on oil. (Campaigns include building the futuristic desert city of Neom, which Prince Mohammed has pledged with his $500 billion.)
But the government’s role in the gruesome killing and amputation of dissident Jamal Khashoggi in 2018 has led numerous companies and executives, including Dimon and Schwartzman, to blame for Saudi investment that year. urged to withdraw from the meeting.
This time around, Mr. Biden’s efforts to seal Saudi Arabia as an ally of Russia so far seem to have failed to leave the kingdom out in the open.
That may be partly because businesses believe Washington’s current anger at Riyadh is very different from anger at Khashoggi, said Rad Alkadiri, managing director of political risk consultancy Eurasia Group. unknown.
Al-Qadiri said Khashoggi’s death was “a heinous act by the Saudis that businesses could not ignore.” “This is a political altercation.”
Several companies whose executives are listed as featured speakers this month also have deep business ties within Saudi Arabia. JP Morgan was one of the underwriters of the record-breaking initial public offering of Saudi Aramco, the kingdom’s state-owned oil giant. Blackstone sees Saudi Arabia as a major backer of multi-billion dollar infrastructure funds.
Boeing also has a 77-year relationship with Saudi Arabia, selling both commercial jetliners and military weapons such as fighter jets and Harpoon missiles to the Kingdom.
That said, companies whose executives are listed as featured speakers are in no hurry to advertise their attendance at the conference. JP Morgan spokesman Joseph Evangelisti said Dimon will be there to meet with clients and investors. Pimco spokesman Michael Reid said investment manager John Stazynski, vice chairman of the investment firm, will attend, but said he was not scheduled as a speaker or panelist.
Boeing has framed the presence of Arthur, president of its international division, as a way to contribute to the geopolitical dialogue. “The conference will bring together business, policy and innovation leaders from around the world to discuss international investment and the future of the global economy,” said company spokesman Paul Lewis.
Other companies whose leaders are listed as featured speakers at the conference were more cautious. Blackstone, Bridgewater, Goldman Sachs and auction house Sotheby’s declined to comment or did not comment on executives’ attendance.
Others, including electric vehicle company Canoo and venture capital firm 500 Global, did not respond to requests for comment.
Biden has publicly pledged the impact of Saudi oil cuts and Democrat supporters in Congress have called for retaliatory measures such as a halt to arms sales, but he has so far identified potential penalties. It has refused to do so and has not announced any further measures.
Saudi officials defended the OPEC+ decision as a purely economic step, arguing that the Kingdom remains a staunch ally of the United States.
But Eurasia Group’s Al-Qadiri said multinationals would need to be wary of increasingly skeptical attitudes toward Saudi Arabia in Washington.
“What this episode shows is that you don’t have to scratch the surface too much in Washington to discover deep anti-Saudi feelings,” he said. “As Saudi Arabia’s interests deviate further from U.S. interests, businesses will feel the pinch more and more.”
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