NEW REPORT: MBS "abusing position via PIF to fund projects that harm his citizens"
Saudi Arabia's de facto ruler Mohammed bin Salman has effectively taken sole control of his nation's $925 BILLION sovereign wealth fund to gratify himself, HRW say
Mohammed bin Salman (MBS), the de facto ruler of Saudi Arabia, is using his nation’s sovereign wealth fund, the Public Investment Fund (PIF), to fund projects that harm his own citizens, involve serious human rights violations, and are principally driven by vanity, according to a 97-page investigative report published today by Human Rights Watch.
“The Man Who Bought The World: Rights Abuses Linked to Saudi Arabia’s Public Investment Fund and Its Chairman, Mohammed bin Salman”, is available in full here (and in PDF form below) and will bring renewed attention to Saudi Arabia and MBS in the countdown to 11 December, the date when it is expected that Saudi Arabia will formerly be confirmed as the hosts of the 2034 men’s World Cup.
Saudi Arabia is the only bidding nation after a process so opaque there has been no attempt by FIFA or FIFA’s president, Gianni Infantino, to explain how we reached that point.
The assumption is that FIFA, and Infantino (pictured below with MBS), love money and want money, and the Saudis have it and want to be major players in world football. Infantino has a track record since taking power in 2016 of becoming close to war-mongers (such as Vladimir Putin) and autocratic, human rights-abusing states such as Qatar (hosts of the 2022 World Cup) and Saudi Arabia (to be confirmed as 2034 hosts).
FIFA’s desire to get more money from Saudi Arabia was detailed in this recent piece. Saudi Arabia’s ongoing lack of concern at the deaths of thousands of migrant workers, including on 2034 projects, was detailed in this piece last week.
I have covered human rights abuses in Saudi Arabia for years, not least since their massive investments in football (including Newcastle United, then the Saudi Pro League), golf (via LIV golf and then effectively buying the sport), tennis, motorsport, esports, wrestling and much more.
This was dissected in great detail at the Play The Game conference in Norway earlier this year; and separately I wrote about the wider work of PTG here via my week in Trondheim.
The PIF has grown from being an $84bn sovereign wealth fund in 2014 to being valued at more than $925bn earlier this year, and MBS plans to expand the PIF into the largest sovereign wealth fund in the world by 2030, aiming to control more than $2 trillion by then.
Human Rights Watch say in today’s report: “Under internationally recognised human rights norms, the government should progressively realise economic, social, and cultural rights to the maximum of available resources, including those resources controlled by the PIF.
“Under Mohammed bin Salman, the PIF operates with little transparency and accountability, raising concerns over whether these funds are ultimately invested and managed in a way that satisfy these international norms.”
PIF, the report claims, has “benefited directly from serious human rights abuses linked to its chairman [MBS].” These abuses allegedly include:
An MBS ”anti-corruption” crackdown in 2017 involving arbitrary detentions, abuse of detainees, and the extortion of property from Saudi Arabia’s elite; this led to 20 companies becoming the property of the PIF. “There is a risk that these companies were seized from their owners without due process,” HRW says.
The PIF allegedly facilitating serious human rights violations linked to companies that the PIF owns and controls, violations such as the 2018 murder of Saudi journalist Jamal Khashoggi, a critic of MBS’s 2017 crackdown. Saudi documents submitted to a Canadian court hearing and reviewed by HRW indicate one of the companies transferred to the PIF in 2017 was Sky Prime Aviation, a charter jet company that owned two planes later used in 2018 by Saudi agents to travel to Istanbul, where they murdered Khashoggi, dismembered him and burned his body parts in a barbecue pit.
Rights violations have also been alleged at the sites of some of the PIF’s most high-profile “mega-projects”, including in the NEOM region, as outlined on this site last week; and also at the Jeddah Central Project (JCP), an urban development scheme in Saudi’s second largest city. Both NEOM and the JCP are being developed by subsidiaries wholly owned by the PIF. NEOM has also seen forcible evictions of a local tribe that has inhabited the region for centuries as well as the killing of one protestor and 50-year prison sentences for other protestors. There have also been forcible evictions in the JCP.
The HRW report says: “Saudi Arabia’s most marginalised people – migrant workers, rural communities, poor and working-class residents – have borne the brunt of abuses stemming from the Crown Prince’s most abusive PIF-backed projects.
“Capital from the PIF has been used for projects that have forcibly evicted residents, razed neighbourhoods, subjected workers to serious abuses, and silenced communities…
"A key quality of governance indicator is whether a government is committed to transparency, accountability, the rule of law, and human rights. When a ruler or a governing elite is undemocratic or otherwise unaccountable to its citizens, poor management, poor economic decision-making, corruption, and human rights abuses thrive.
“Instead of improving the overall situation, the existence of a centrally controlled stream of revenue, such as oil revenue, can exacerbate an undemocratic ruler or governing elite's abuses and misrule by providing the financial wherewithal to entrench and enrich itself without any corresponding accountability.
“These problems are clearly present in Saudi Arabia and raise significant risk that Crown Prince Mohammed is using the PIF to entrench his de facto rule by providing him with direct access and control to nearly a trillion dollars of Saudi Arabia’s wealth.”
The PIF was founded in 1971 but reshaped when MBS effectively became the most powerful man in Saudi Arabia from 2015 onwards. HRW say they obtained and reviewed Saudi government statements, court documents, laws, and internal decrees, “and found that Mohammed bin Salman ’s overhaul of the PIF’s governance framework concentrated an immense degree of control and oversight of the PIF into his own hands.”
Major PIF investments have involved unilateral decision-making by MBS, despite protests from the board of directors and professional advisors, HRW claims.
“For example, in early 2020, Mohammed bin Salman wanted the PIF to buy specific stocks as the markets plummeted during the onset of the global pandemic. The crown prince went against the decision of the PIF board of directors and bypassed the PIF’s internal governance and operations framework.
“In an interview for a documentary on MBC, a Saudi government-backed broadcaster, PIF Governor Yasir al-Rumayyan [the leading figure in LIV golf and also Newcastle United’s chairman] said that the PIF board of directors voted against the move because it was seen as too risky.”
As an aside, Yasir al-Rumayyan (left below) was photographed with president-elected Donald Trump (middle) in recent days at UFC 309 (with Elon Musk, right, at Madison Square Garden). Trump is close to the PIF, and in fact works in partnership with the PIF for LIV events.
This all highlights the influence already of the PIF, that its governor is socially close to and is in a close business relationship with the next president of the USA, who in turn now has the world’s richest man, Musk, working for his imminent government.
Do Trump or Musk care about human rights in Saudi Arabia? Or, like FIFA and Infantino, are they real-world pragmatists who just want business and money to help the world go around?
According to al- Rumayyan, Mohammed bin Salman took the matter of PIF board directors not agreeing with MBS, to his father, the King, who “issued a royal decree allowing us to avoid existing PIF governance rules and follow the opinion of the Chairman (MBS).”
Al-Rumayyan added: “The PIF Board could not be persuaded of a specific opinion, so we worked outside the outlines of governance.”
The main thrust of HRW’s report is that through the PIF, Saudi Arabia’s public resources are effectively controlled by one person, MBS, who does not wield this enormous power “in the interest of broader public”, and actually causes harm to some of the Saudi public via evictions to make way for his projects.
“Most of the [PIF] growth since 2015 has been due to the transfer of other Saudi government assets into the PIF, most notably the transfer of shares of the state-owned fossil fuel company Aramco, along with proceeds from the 2019 Aramco initial public offering, rather than returns from the PIF’s investment portfolio,” the report says.
“Mohammed bin Salman’s spending on PIF-funded projects raises questions about the realisation of economic, social, and cultural rights in the country, particularly since poverty rates in Saudi Arabia are by some measures high. The Saudi government does not disclose basic data on poverty, does not nationally define poverty, and has not published a poverty line.”
HRW makes a series of recommendations in their report not only to the Saudi government (not least more transparency, better human rights protections and freedom of information) but to the PIF, to would-be partners of the PIF and to allies of Saudi Arabia.
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