Saudi Arabia’s young deputy crown prince had a message for America’s new president at their first meeting in March: The kingdom wanted to invest billions of dollars in U.S. companies, creating thousands of jobs.
It was just what Donald Trump, the U.S.’s first billionaire president, wanted to hear after winning the White House, in part on his background as a businessman and his pledge to make some deals, according to people familiar with the meeting who are not authorized to speak publicly about it.
While Trump repeatedly clashed with the democratically elected leaders of U.S. allies in Europe on his first overseas trip as president, he got along famously with his counterparts in the Middle East, especially in Saudi Arabia, where they treated him like royalty.
Here’s one big reason why: Mohammad bin Salman, the influential 31-year-old prince who is helping to run the nation alongside his father, King Salman. Among the deputy crown prince’s plans is the sell-off of a piece of state-owned oil giant Aramco, with the proceeds to be invested in companies at home and abroad, including the United States.
“It helps if you have a leader in the White House and the administration receptive to the situation in Saudi Arabia and willing to continue strengthening the ties,” said well-known Saudi economist Ihsan Buhulaiga. “That, of course, is a great help. But also this country thinks highly of the United States and the president of the United States.”
The U.S. and Saudi Arabia struck a series of deals totaling more than $350 billion over 10 years during the president’s recent two-day visit to Riyadh, which Trump hopes is the first step toward an even bigger investment when Aramco stock is offered to the public.
The two countries signed agreements – including some prospective ones – involving a variety of industries, such as technology, medical equipment, chemicals and real estate, with $110 billion on defense alone. Some of the companies involved are Boeing, Lockheed Martin, Blackstone Raytheon, General Dynamics, Exxon Mobil, General Electric and Dow, according to a White House document.
But there’s no guarantee any of the agreements will create jobs in the U.S. or, in some cases, that they will happen at all.
In Riyadh, many Saudis worry that the kingdom will give too much money to the United States after Trump repeatedly said before he was president that Saudi Arabia failed to pay its fair share for U.S. defense assistance. The issue dominated social media during the president’s visit, with images like one where Trump slips his hand into King Salman’s pocket to take money as he hugs him.
“In a state where we are suffering from our economy, people are worried about what we are going to pay,” said Aziza al Yousef, 60, a human rights activist, during an interview at her home in Riyadh. “What is he going to make us pay for? Are we getting anything from these deals or not? Is he really doing anything for us or just come here for us to pay a penalty?”
But John Sfakianakis, director of economics at the Gulf Research Center in Riyadh and former adviser to the Saudi Arabian government, said there were “huge opportunities” for U.S. companies and Saudi Arabia.
“For decades, Saudi private investors have invested in U.S. businesses and real estate,” Sfakianakis said. “Saudi has helped through these investments and buying of U.S. products keep thousands of jobs in America.”
President Donald Trump’s nine-day maiden foreign trip began in Riyadh and included stops in Israel, the Vatican, Brussels and Sicily.
Prince Mohammad, who serves as chairman of the Council for Economic and Development Affairs and as defense minister, introduced a plan that calls for selling a stake of less than 5 percent of the state-owned oil company, potentially creating the world’s biggest publicly traded firm.
The son of King Salman and his third wife, known in Saudi Arabia simply as MBS, quickly became an aide to his father. His influence had already ballooned as his father rose in the government and made young MBS his private adviser.
At his visit to the White House in March, Prince Mohammad told Trump and his son-in-law and top adviser, Jared Kushner, about his idea, part of Saudi Vision 2030, which is well known and frequently mentioned in the capital city. Signs touting Saudi Vision 2030 are all over Riyadh, including the airport.
“The two countries highlighted that expanded economic cooperation could create as many as 1 million direct American jobs within the next four years, millions of indirect American jobs, as well as jobs in Saudi Arabia,” according to a White House readout of the March visit. So far, there’s no evidence that Saudi Arabia could meet such a lofty goal of 1 million jobs.
The move is designed to lessen Saudi Arabia’s dependence on oil. The government has had to take a series of cost-cutting measures in recent months as the cost of oil has dropped.
Prince Mohammad’s plan was inspired in part by Abu Dhabi’s national wealth fund, Mubadala Development Co., experts say.
The proceeds, estimated to be as much as $2 trillion, would be injected into the Public Investment Fund, a three-decade-old fund that has until recently mostly invested in domestic opportunities. But some are worried about the consequences of a series of lawsuits filed by more than 800 families of 9/11 victims.
“The PIF has provided very little information about its strategy or investments to date, which has created some concern among local businesses and technocratic elites,” said Steffen Hertog, a Middle East expert who teaches at the London School of Economics and Political Science.
Saudi Arabia has invested more than $114 billion in U.S. Treasury bills.
Jean-Francois Seznec, a political scientist specializing in business and finance in the Middle East who teaches at the Johns Hopkins University and Georgetown University, said Saudis were apprehensive about working with the U.S. amid the lawsuits, which could cost the kingdom a significant amount of money. The Saudi government is lobbying Trump and Congress to repeal the contentious 2016 law that allows relatives of 9/11 victims to sue the kingdom for their deaths. “There is a lot of weariness,” he said.
Prince Mohammad wants the Public Investment Fund to be split between domestic and international investments. Last year, it invested $3.5 billion in the online taxi company Uber.
During Trump’s visit, Blackstone, the world’s biggest private equity manager, and the Public Investment Fund announced plans to invest $40 billion in infrastructure projects, mainly in the United States.
Saudi leaders said the kingdom had much to offer when it came to economic development but the issue was often overshadowed by the headline-grabbing discussion on how to combat terrorism.
“Our region, unfortunately, people focus on the problems, the terrorist issue, the wars in Yemen, Iraq and Syria, but there are issues that have been underreported – that’s the innovation and the willingness of our people to invest in their own future –that doesn’t really get that much attention,” said a Saudi official with knowledge of the situation who is not authorized to speak publicly.