LONDON — The Biden administration’s message to U.S. businesses was clear. Consider the reputation of the country where it does business.
The remarks, made by the White House press secretary at a briefing last week, just as some of America’s top executives joined thousands of other investors, businessmen and politicians as key Saudi officials. I was preparing to attend a business meeting.
A three-day meeting called Davos in the Desert — the Investments for the Future Initiative — is scheduled for Tuesday. But weeks after a back-and-forth exchange of accusations between the U.S. and Saudi governments over his Oct. 5 production cuts by the joint Saudi-Russian oil cartel OPEC Plus, U.S. officials especially will be absent.
The cuts, which financially benefit Russia, have infuriated US officials whose voters are struggling with rising energy costs due to Russia’s invasion of Ukraine. President Biden warned of “consequences” for the kingdom.
But those results have yet to be revealed in detail, and tensions appear to be deterring American business leaders (some of whom have great interest in Saudi Arabia) from attending the conference. not.
CEOs of JPMorgan Chase, Goldman Sachs, Wells Fargo and influential investors such as Blackstone Group chief Steven A. Schwartzman and Bridgewater founder Ray Dalio will also participate. Former Trump administration officials Jared Kushner and Steven Mnuchin have received hefty commitments from leading Saudi sovereign wealth funds to fund their investment firms.
So do government officials in Singapore, Russia and Nigeria.
But the Treasury Department, Commerce Department and State Department all said no senior government officials are planning to attend. The White House declined to say if they were sending anyone.
Rep. Law Khanna, a California Democrat and the bill’s originator, said, “This decision to cut production is such a slap in the face of the United States and is in line with President Putin that it is bipartisan again. I think it will provoke the anger of the people,” he said. Referring to Russian President Vladimir V. Putin, he said in a recent interview that he would temporarily ban US arms sales to Saudi Arabia.
Saudi officials denied that the cuts represented cooperation with either side in the Ukraine conflict, saying they were protecting not only the group’s economic interests, but their own. They pointed to ties to Ukraine, including his recent $400 million aid package.
Another point of tension between the Biden administration and the Saudi leadership was the 2018 murder of Saudi-born dissident and journalist Jamal Khashoggi.
Ultimately, though, the Biden administration has so far failed to reach out to companies like JP Morgan and Blackstone, which have long-standing business ties in Saudi Arabia, as well as wealthy Saudi financiers by attending this week’s forum. has done little to discourage small businesses looking to attract investment from
The conference is not only a commerce parade, but many investors expect Saudis to show up in person and shake hands as the country seeks to transform itself into a global hub for business and tourism. recognizes how important
The American president has maintained good relations with Saudi Arabia for decades despite widespread accusations of human rights abuses. The country’s vast oil reserves have also kept the US and other Western companies involved.
The interest in this year’s conference only underscores how Saudi Arabia’s $620 billion sovereign wealth fund and increasingly open markets have become a powerful source of global influence. Businessmen and investors are delighted to interact with Saudi Arabia’s de facto leader, Crown Prince Mohammed bin Salman, in light of the enormous opportunities he can offer. Many of them say they are ignoring his escalating crackdown on domestic dissent or focusing on his efforts to open up the country’s economy and ease social restrictions.
These business ties will likely remain intact, barring drastic changes in US policy, such as severing diplomatic ties and imposing sanctions on Saudi Arabia.
Last week, White House Press Secretary Carine Jean-Pierre urged the United States to take into account “potential reputational concerns arising from public policy choices made by host countries” when deciding where to invest. companies were alerted.
Still, Saudi conference organizer Richard Attias told reporters in the Saudi capital Riyadh last week that he had received so many requests from Americans to attend that his team had begun turning down citing shortages. did. of space.
At the same time, in the weeks since Mr Biden issued his warning, Mr Biden’s plans to address the threatened consequences for Saudi Arabia have remained vague.
The election of his ambassador to Saudi Arabia, Michael Ratney, was postponed by Oregon Democratic Senator Ron Wyden.
Since OPEC+’s decision, Khanna and other lawmakers have announced a one-year blanket ban on arms and munitions sales, and the Justice Department has sued the cartels for alleged anti-competitive practices.
Negotiations that began during the Trump administration over allowing the kingdom to build a nuclear power plant using U.S. technology face opposition from some members of Congress who must approve such an agreement. It is almost certain that you will.
Some lawmakers are also calling for the withdrawal of US troops from Saudi Arabia, which currently has fewer than 3,000 troops.
However, all these measures have a downside.
Saudi Arabia is the single largest importer of US arms Stockholm Institute for International Peaceand that business loss could hit American manufacturers like Raytheon Technologies and Lockheed Martin, and could even spur layoffs during times of economic fragility.
Even if OPEC loses its current protected status under U.S. law, it is unclear how the court’s rulings on foreign oil production will be enforced. It is in Saudi Arabia to protect American interests abroad, including providing a bulwark against aggression and protecting allies like Israel if necessary.
Under the Trump administration, the United States has forged a closer alliance with Saudi Arabia, hosting President Donald J. Trump’s first official visit in 2017. The two countries have struck billions of dollars in deals, including the purchase of advanced American weapons by Saudi Arabia.
Kushner, Trump’s son-in-law and former senior Gulf policy adviser, has come to trust the Saudi crown prince as an ally in the region’s peace efforts, sometimes shielding him from criticism. helped.
But Mr. Biden has a more belligerent tone.
He released a US intelligence report showing that Prince Mohammed approved the murder of Mr. Khashoggi, and in the 2019 election campaign, Mr. Biden called the kingdom a “pariah” state.
Shortly after taking office, Mr. Biden also banned the sale of offensive weapons to the kingdom in order to cut off aid to the Saudi-led war against Iran-backed Houthi rebels in neighboring Yemen.
But Russia’s invasion of Ukraine has forced the US and its allies to impose tough sanctions on Russia, restrict energy supplies to the West, and change the political calculus.
With just weeks to go until the controversial Nov. 8 midterm elections, Mr. Biden is on the hook.
Christian Coates-Ulrissen, a Middle East Fellow at the Baker Institute for Public Policy at Rice University, said Prince Mohammed “has made it very clear that he will act in whatever he thinks is in Saudi Arabia’s best interests.” ‘ said.
Mr. Biden is in a difficult position given that U.S. officials’ visit to him in July is intended to increase cooperation with Saudi Arabia on its energy policy. The president met with Crown Prince Mohammed, exchanged heartfelt fists, and attempted to mend relations in hopes of winning an agreement to increase oil production.
Saudi Arabia slightly increased production in July and August, helping to lower gas pump prices. But with the prospect of a global recession that could dampen international oil demand and push prices down, the kingdom reconsidered and sought to secure as much profit as possible, prompting a significant increase announced on 5 October. paved the way for reduction.
Vivian Nellaim Riyadh, Saudi Arabia, Allan Lapeport, Anna Swanson When Michael Crowley Contributed to the report in Washington.