Download full text
(1.262Mb)
Citation Suggestion
Please use the following Persistent Identifier (PID) to cite this document:
https://nbn-resolving.org/urn:nbn:de:0168-ssoar-63533-3
Exports for your reference manager
A sovereign wealth fund for the Prince: economic reforms and power consolidation in Saudi Arabia
Ein Staatsfonds für den Prinzen: Wirtschaftsreformen und Herrschaftssicherung in Saudi-Arabien
[research report]
Corporate Editor
Stiftung Wissenschaft und Politik -SWP- Deutsches Institut für Internationale Politik und Sicherheit
Abstract With the “Vision 2030” development plan, Saudi Arabia wants to diversify its economy and end its dependence on oil in the long term. The Public Investment Fund (PIF) is of particular importance here. By 2030, it is to become the world’s largest sovereign wealth fund (SWF) and manage financial asset... view more
With the “Vision 2030” development plan, Saudi Arabia wants to diversify its economy and end its dependence on oil in the long term. The Public Investment Fund (PIF) is of particular importance here. By 2030, it is to become the world’s largest sovereign wealth fund (SWF) and manage financial assets worth $2 trillion. The PIF is not designed as a savings fund, but as a stabilisation and development fund: The fund capital is intended to cushion the state budget against price fluctuations on the commodities market, finance development projects, and attract investments and know-how from abroad to the kingdom. The analysis shows, however, that the expansion of the PIF is primarily motivated by power politics. The SWF gives Crown Prince Muhammad Bin Salman direct access to the state’s substantial financial resources. He can use these resources according to his preferences and thus purchase the loyalty of politically important factions within the elite. In addition, Bin Salman could use the PIF to “buy” international support for his political goals. Through the SWF, the economic transformation in Saudi Arabia is closely linked to the consolidation of the crown prince’s rule. Decision-makers in Germany and Europe should be aware of these functions of the PIF. Economic cooperation with the kingdom involving the PIF or companies controlled by it has a political dimension that must not be ignored. In addition, a stronger involvement of the PIF in Europe could require a political impact assessment that would have to examine whether the SWF primarily acts as a profit-seeking investor or whether it is pursuing a foreign policy agenda. (author's abstract)... view less
Keywords
Saudi Arabia; economic policy; economic reform; economic development (on national level); diversification; funding; investment; power politics; guarantee of domination; international economic relations; politics; purpose
Classification
International Relations, International Politics, Foreign Affairs, Development Policy
Economic Policy
Free Keywords
Beschaffung von Finanzierungsmitteln; Staatliche Investitionsfonds; Mohammed bin Salman
Document language
English
Publication Year
2019
City
Berlin
Page/Pages
32 p.
Series
SWP Research Paper, 8/2019
DOI
https://doi.org/10.18449/2019RP08
ISSN
1863-1053
Status
Published Version; reviewed
Licence
Deposit Licence - No Redistribution, No Modifications