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tv   NEWSHOUR  Al Jazeera  October 27, 2018 5:00am-6:01am +03

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as the predominant employer with fifty one percent of the population under the age of twenty five job creation is an urgent concern the oil production itself is controlled by state owned saudi aramco reportedly the most profitable company in the world but nobody really knows because despite plans to sell off some of it on public markets the books remain a secret in two thousand and seventeen saudi arabia produced twelve million barrels of oil per day so let's say the kingdom withholds a few million barrels prices would go up but that would hurt the global economy which wants to move away from fossil fuels its biggest customers would look elsewhere for a long term supply and it would all end up being an own goal you certainly don't want to destroy your only income before you plan to diversify your economy and this should be in the wake of the job the crisis the country had issued a veiled threat that it could use oil to retaliate against any sanctions but then
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the saudi oil minister stepped in to soothe investors if there are. any disruptions which you know from from supplies of especially with their own sanctions grooming then we will continue with the mindset we have now which is meet any demand that materializes and ensure ensure that customers are satisfied well joining me now from washington d.c. is chris garcia chris is a former deputy director of the u.s. department of commerce and c.e.o. of vicar financial good to have you with us so as we all know saudi arabia is the biggest exporter of oil in the world but in general economic terms how important is the saudi economy to the world. sure you know it well it's actually quite important certainly particularly in the short run this is why when we look at some of the potential retaliation tactics that the saudis have threatened we have to take them
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seriously the saudis have significant assets they hold probably the third most natural resources with about thirty five trillion dollars worth of natural resources within their territory and if the saudis do make good on this retaliation threat potentially raising prices by cutting output of oil production raising all prices up to four hundred dollars per barrel from eighty dollars per barrel which is about more than double just about the all time high of two thousand and eight all time high of one hundred fifty dollars per barrel that would have significant reverberations throughout the global economy but chris this is the era of fracking it's the arrow voltar that of energy sources is saudi oil still as important today as it was during the nine hundred seventy three old crisis for example. well certainly it is important we can't underestimate how important it is and one
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of the largest or like spores in the world. you know can have significant influence over the price of oil they've used this in the past as a threat both frankly as a as a carrot as well as well as a stick when we have implored them to try to reduce. the price of oil they've they've increased output u.s. shale exports and the shale industry has taken off we have seen a boom here in the u.s. and we're now on pace to beat saudi arabia and surpass saudi arabia by city bank's estimates next year as an overall leader in both crude and overall oil product exports but however in the short run that's what we have to be most worried about it's the short run repercussions of the saudis cutting output that would send shock waves throughout the global economy but i would say that that that's leverage it would diminish in the long run unless they diversify as the world continues to
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diversify itself from its energy resources many analysts say all prices can be a double edged sword can riyadh afford to use oil as a weapon. well yes and no i think that the much like president trumps tariffs actually there is a short term you know short term pain and but there's also you know long term gain and you know countries will diversify themselves as necessary for example if we were to let's say somehow thwarts here or disrupt this u.s. saudi relationship that we've had for such a long time and let's say this arms deal of one hundred ten billion dollars were to fall through it's very likely that saudi arabia would would try to look for different sources different suppliers for for arms and that would be of course russia or china and so i think there's much too much to lose from any type of
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disruption with the u.s. saudi relationship not of course not only of course some of the regional stability that we enjoy by having an ally like saudi arabia to help for against terrorist financing and and support and state support i should say for terrorist organizations but also it's the economic repercussions as well not just of the oil threat threats to cut output an increase in oil prices and that would in turn have the effect on transport of goods that are used of course use oil products as as a means of of energy but it's also just the overall economic impact that we've seen come out of the trunk of ministrations visit as its first international visit saudi arabia all right thanks so much phil analysis of that. still to come on counting the cast deals or no deals a gathering took place this week to showcase saudi economic reforms we'll take
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a look at how successful it was after a number of high profile names boycotted the event. but first from riyadh to san francisco hall money from saudi arabia is being channeled into u.s. space tech startups this way of financing is known as venture capital from saudi's point of view these kinds of investments can hedge against a potential decline in the demand for oil in the future that's because the startups are tipped as having long term growth potential saudi sovereign wealth fund is called the public investment fund it traditionally had a strategy of low risk investments but everything changed in two thousand and sixteen that's when the kingdom sovereign wealth fund invested three point five billion dollars in it was the single largest investment ever made in a privately held company at the time controversially though a ban on women driving was still in place since then the kingdom became the largest investor in the ninety three billion dollars soft bank vision fund which is the
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biggest fund ever raised in silicon valley led by my so your shoes son japan based soft bank has changed the landscape of venture capital according to some reports rival venture capital firms warry soft bank could be pushing up valuations and pushing them out of the market but says her show g.'s killing questions about morals and ethics are being raised saudi money could be viewed as a liability by startups and their customers rob reynolds has more on the relationship between rich members of the royal family and silicon valley in california. in the aftermath of the killing of jamal khashoggi at the hands of saudi government agents tech companies and their executives are distancing themselves from saudi investment but how each one of them makes that decision on their own i think is probably driven very much by their own moral conscience but also their understanding that other people are looking at them in their formal
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leadership positions for cues about what to do right now several tech leaders have already bailed out of crown prince mohammed bin summons investment conference including google cloud c.e.o. diane green a.o.l. founder steve case and guber c.e.o. darren shockey who said he was very troubled by reports of cars show g.'s death cause for a shot he's public comments were seen as significant because the saudi wealth fund holds a three and a half billion dollars stake in the right ailing app saudi arabia has also invested heavily in tesla motors door dash the work space company we work and others much of the saudi money is funneled through the japanese bank soft bank the world's largest investment fund. so far saudi arabia has put forty five billion dollars into soft banks so-called vision fund and the crown prince says he'd like to double that
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amount as tech companies recoil from the saudis on ethical grounds it will be difficult if not financially impossible to unravel their saudi tie is a complex tangle of contract stock preferences and legal obligations tiny companies hands in such matters in some ways this case is providing an opportunity for companies to really provide some ethical and moral leadership maybe at a time when they're not seeing or experiencing what they'd like to see from leadership in other sectors silicon valley corporations face a dilemma choosing between an ethical response to a shocking crime and the abundant funding that makes the tech industry flourish well joining me now from singapore is i mean they i mean it is a jap pan stock market strategist with singapore based symmetric advisors good to
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have you with us so how much damage has the whole affair done to the attractiveness of saudi money in the tech world right now where it's difficult to set the moment but i mean the likelihood is that you know it's going to have some notable impact. on companies that will accept. the vision fund money. and it also depends on you know either or their. seed as if you like and then whether they were going to continue to stay in the vision fund say you know is it open debate but obviously it's not very good news for in terms of the prospects going forward how important is saudi money how important is vision fund to the tech world was forty five percent of the of the vision funds forty five billion that put in an one hundred billion fund not all the money as been has been invested or i'm not sure if they've managed to raise the full amount as of yet but. as far as
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saudis. contribution to the first vision fund was supposed to be forty five percent or forty five billion and they were looking to launch another hundred billion fund . and saudis were going to put another forty five billion another forty five percent down so yes a very very big contributor it's not so easy to find alternatives if they pull out but i don't think saudis will pull out. i think it is in their benefit to to to stay in it and i think the fact that so on sun sun i decided to go to riyadh but not attend the conference i'm pretty sure that's already had the blessings of the saudi government they understand that you know if someone does show up in the conference you know i might send the wrong signals for the vision fund then the saudis on the vision front to succeed will softbank be able low to to launch another fund for investments in the tech world as was planned. that depends
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on you know whether the saudis will participate in the future because another said that they want to participate and add another forty five billion dollars to the second fund. the question is you know if the question is you know would they be able to kind of raise that kind of money without the saudis obvious you'd be a lot more challenging. it's a lot of money. and you know that the size of these funds which of unheard of previously. is what was supposed to give soft bank the vision fund a big kind of advantage strategic advantage because you know they're in a position to basically you know bind size and support these companies not putting pressure on them like perhaps some of the other v.c.s. would. because you know they have some very deep resources has this whole fair
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made it any harder for soft bank to launch that second fund because of fears of maybe sanctions which you mentioned because for some companies. it being associated with a fund that gets a lot of money from saudi arabia is not the most positive thing in the world and so on and so forth yes said the answer to your question is yes obviously you know they're going to have a difficult more difficult time. convincing people to take their money. so the answer to that is most probably yes will be more difficult would it be impossible i don't know. but it would be more difficult the other question that you know you have to ask is in a way that the if the saudis did stay in the vision fund one and two let's say will the other. seat is likely to be kind of. shy away from the fun so you know there are there are the cedars in the vision fun like apple. and some of the big names so potentially you know we might see some of
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those other seeders kind of pull out so you know it's a fluid situation as i said it's not positive but you know from here it's just mainly spec is speculation to. to assume that you know this is going to impact the vision fund immediately but yeah i mean if this continues if the negativity surrounding saudi money continues then yeah it's going to be more difficult thank you very much for your thoughts on that no problem thank you the future investment initiative conference took place in riyadh this week it's purpose to show off the kingdom's investment plans but scores of business and government figures pulled out of the conference amid global outrage over hostile g.'s death some finances still went to riyadh though chief executives who did sharping clude patrick prion a of the french oil company total bernard smith as more.
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by the time crown prince mohammed bin salman turned up at the future vestment initiative summit in riyadh a day after it started saudi arabia had already signed deals worth fifty billion dollars another six billion was added by the time the event closed. the murder of jamal khashoggi at the saudi consulate in istanbul cast a dark shadow over the conference but it's not stopped business being done of its people are here now working there still is west representation there are bankers there are people you know investors looking to see business they're just not always up to the highest level as they were last year and it's clear from talking to many of them that some of them are frustrated that their c.e.o.'s and their top executives are pulled out also missing from the summit was senior politicians from mainly western countries who withdrew his outrage over his murder group but there were plenty of others who did attend perhaps not as easily able to resist the
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financial clout of the world's biggest oil producer there were government delegations from china russia and african and middle eastern countries vision the conference has been salman's brainchild created to draw investment and diversification into an oil dependent economy that needs to find new ways to provide millions of jobs and it's those opportunities that attendees couldn't ignore you can't take away decades of collaboration. effect of collaboration. over one incident of course or sconce of quinces fractions and then and then hopefully you can get past those actions the conference was told that multibillion dollar plans include theme parks and red sea tourist resorts saudi arabia says it also wants to offer privatization opportunities in education health care and desalination for mohammed bin solomon it was almost business as
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usual. well joining me now from london is name as lamb name is chief market analyst with think mark it's good to have you with us so name how much of a dent has the whole affair put on the saudi investment conference overall i would say that the expectations of what they were before this. this affair they're very different now or saudi officials say they sealed deals worth fifty billion dollars but do we know how much business was lost because of the g. affair for example you know siemens said it alone froze a twenty billion dollars deal. you know there is no question the deals were done. and investors were there entrepreneurs were that there is no doubt about that but i think what we are really referring or hair is the level of it on to panesar the sea level executives that was supposed to go there and then the business down on the back of that that would have created some serious headlines because right now they
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only had a line that we see is that yes one billion worth of a stock selloff. by foreign investors and the other headlines that everyone is focused on is that he asked the local investors they also were selling the stock market in terms of a ryall i think devaluation was nearly about three billion but then some insiders some banking in local introduced were the only one who were buying that i'm glad you mentioned that when you've got a situation in which foreigners foreigners in particular are selling over one billion dollars worth of shares on the saudi stock market i mean how much of a blow is that to a stock market. it has a very detrimental impact on the saudi stock exchange or on the style of saudi financial markets there is no doubt about that let me put things in perspective c.d.s. stands for credit default swaps and we have seen these c.d.s.
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incredibly increasing so just for the viewers to make this explain it may make this concept a bit easier when the c.d.s. is rising it means the pick the risk on the country is rising enormously and we've seen those colors of shooting right to the upside in comparison to qatar we have seen that risk declining so what investors are thinking saudi stock market is a highly risky market to be in and what i wanted to point out is a very important element here why the saudi c.d.'s or the risk is increasing at the same time for the insurance of that market abu dhabi's stock exchange we have seen the similar trend as well so the insurance premium for the stock market as anchored quite enormously in the past few days will make pension fund managers though for example any less eager to put their money into how the stocks in the portfolios lake pension funds and big index funds they are very sensitive to these
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kind of news an example of that would be google saying no to pentagon that big contract just because the employees started to backlashing they don't want to be involved or pentagon is involved now we have the same in a sense around the globe where the investors are going to be happy that ok rather we want to have a saudi money in backing up some new businesses or buy the vive wanted to have a saudi money involved in certain part of the business is that remains to be a question because generally speaking i don't think a lot of investors are feeling comfortable with that idea and if that continues to be the case then of course the that's not going to bring any fruitful results for the saudi market or what about spillover how well integrated is the saudi stock market into the global system. not so much directly if we are talking about this purely from the stock market perspective right because
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it's only institutional or qualified investors can only participate in that market yes the e.t.f. market is still out there where other investors can perhaps participate but if we look at the fund flow in those e.t.s. or a non qualified investors or the the quite a investors of the same criteria can actually invest we are seeing negative fund flow we're still seeing people drawing money out of those e.t.s. rather than putting that money in so i think in a run we are if we are to speaking of the direct correlation of a style the stock market over the over the walled stock market or with other stock market no correlation isn't that great but if we are talking about the commodity aspect or the secret weapons of or oil or anything of that nature then yes the correlation is as strong as it can be all right now i must i'm going to talk to thank you and that's our show for this week about remember you can get in touch
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november on al jazeera radicalized you a new hard hitting series comes face to face with the hatred and violence of militant groups that attract young people around the world on november fifth the u.s. will impose additional sanctions on iran targeting the oil sites we'll look at the impact that may have when migrant lives are in danger and see who should come to their aid people in power investigates the united states is getting ready for the u.s. midterm elections on november sixth join us for live coverage and analysis and a listening post continues to examine global media coverage and look behind the headlines november on al jazeera. and you call it against us in the club innocent.
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carry this is the news hour live from doha coming up in the next sixty minutes wanted men istanbul's prosecutor demands the extradition of saudi suspects for the murder of journalists from all. after he winton i was continuously watching to see who emerged from the consulate we were both for each child was fiance reveals her fears and why she's been invitation from the us president. i really was a person that for me over others a transporter suspected of sending pipe bombs to the president's opponents. and a shock of sri lankan politics in a move no one was expecting the x. president is sworn in as prime minister. has revealed how worried she was about his ill fated visit to the static consulate
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in the stone bowl and her first interview with turkish t.v. since the journalist killing more than three weeks ago she says she was reassured by the show he did not believe authorities would dare interrogate or arrest him in a foreign country istanbul's prosecutor as now and abandon the extradition of eighteen suspects from saudi arabia for killing strafford as the latest developments. on this is a journey to. get you what happened with the second says the turkish t.v. graphic walt with the words together why was she worried. her first t.v. interview since her fiance was killed in the saudi consulate along with a second. car garage that he was very happy indeed on the basis that he was writing them because his close friends including other journalists on intellectuals are now in prison so there was a certain moral responsibility he had to take on he used to say the fact that i'm in america isn't just about me writing for the washington post i'm writing things
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my friends on table two in terms of details there was little in the interview we don't already know but i do. she did mention that although they were both nervous about these appointments on october the second she said that he had told her consulate staff and treated him well during a previous visit on september the twenty eight so by winning because shorties confidence had a trap being sent it's been more than three weeks since jamal khashoggi was last seen alive in turkish president to one is ratcheting up the pressure at a meeting with ruling party members he said he believed that at least someone among the eighteen men arrested in saudi arabia implicated in the killing of quiz shows he must know where the body is he mocked and sweat and the saudi leadership blaming them so he says for not cooperating with the investigation enough to be enemies the
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bush got of course there's other information and evidence we're holding that will be used when the time comes but no need to rush because saudi officials have to say who killed. they made certain announcements which gave us considerable concern their explanations were quite comical but childish excuses do not befit a responsible state or responsible statesmanship. the saudi prosecution said on thursday that on the basis of information shared by the turks it is now investigating. the saudis say they don't know where these body is and insists the crown prince muhammad bin solomon had no role in his death. saudi arabia's chief prosecutor is jew in turkey on sunday but on friday evening after president had repeatedly called the saudi suspects to be tried in turkey the country's justice ministry submitted an extradition request to saudi arabia for the eighteen
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arrested men the senior turkish official told her this was requested because jamal khashoggi was murdered in turkey by saudi nationals who travel to turkey for this specific purpose in his speech earlier earlier ones message was clear he said if you can't make them talk then send them to turkey and we will put them on trial here. al-jazeera is stumble let's get more of that interview with his fiance on tarkus television. was critical of how the u.s. has handled the case. trump invited me to the united states during the first days of the process but his statements had very short time periods in between and they were contradictory i perceived it as a statement to win the sympathy of the public elevator joins us now from istanbul so allan what should we be looking for next. well i think over the next forty eight
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hours it's going to be quite interesting we've had from the turkish president who says there is more information to come out and he will use it when he thinks it's appropriate and obviously when it exacts most influence for the turks in this this case no we nor in forty eight hours or so the saudi prosecutor is going to be in turkey he's going to travel to istanbul is going to meet with turkish officials at the talks were concerned that he might not have sufficient evidence in his view to do much against the eighteen her cunt lee being held in saudi arabia that is why they have moved forward with the idea of an extradition treaty it's been put together by the justice ministry here in turkey it has been passed to the foreign ministry and it will go through diplomatic channels and be in hand it be handed to the saudis themselves there's also the ongoing investigation and present and one made it very clear as well one of the main answers he wants from the saudis is
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where is the body you've admitted that you killed him you said there was in their words a local collaborator a local cooperator is actually how the saudis framed it they want his name is say you've got eighteen so he's company being held who is the help to here we want to know where the body is and that again then puts focus back on the consul general as garton where of course there remains this well which saudi authorities want to examine they've taken some water samples but they actually want to go in and check that itself because they're concerned that they're looking for a body or perhaps even body parts in that well and while the saudis are saying they're fully cooperating with the turks the turks are saying no you know you're not doing all you can to help us with these inquiries that's a prime example of that we want into the garden we want into that well and we want your cooperation no surprise that the one is keen that. the extradition treaty is
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full of through the extradition process is full through that these people are returned to turkey where he says they'll go on trial in front of international observers and those responsible for the death of jamal khashoggi will be will face justice i alan fischer life press in istanbul alan thank you the same professor of international business affairs at george washington university who joins us via skype from assets in virginia thank you very much for your time so this talk about it about extraditing saudi suspects is that realistic to you absolutely not anyone who knows anything about saudi arabia would tell you that in saudi arabia this is has not happened without the approval and the direct involvement of prince n.b.s. as he's called all the king and resolve these who send these eighteen men or fifteen men or whatever number outside of saudi arabia they would be losing control
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of this whole affair because if they keep it in saudi arabia it will have some kind of concocted trial it would not be open it never is open and this will be the end of it and they will come up with something to try to satisfy the world where if they send them to tell you he moves total control and they will be up a creek so right now who does have the upper hand is it is it turkey or is it the u.s. that's still in the position to put some pressure on to get some answers who really is in control. i think in control it is actually turkey if you want to look at it that way but turkey also wants to be careful and want something out of this i think what maybe it was looking for you know them to arrive at some kind of a compromise is to get saudi arabia to maybe help with the blockade a back have to let that loose i think turkey will one brave years cooperation
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in syria and i think at the end of the road also maybe turkey wants some some financial assistance from saudi arabia but at the same time tookie has to be very careful with the united states because it will not want more sanctions from the united states so it is the three of them are doing it dance here but i think in this dance this that enron is in control well. this dance that you speak of this geo political dance well actually lead to the real truth about what happened to. i think eventually yes we must get the truth we will get the truth because there will be a leak and clearly if the saudis had nothing to high which is obviously laughable but if they had nothing to high they would they would give the turkish fourth or at
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least the body but i don't think they can do that because the body i believe has been dismembered this saudi. internal security services of a very brutal and i'm sure that they have carried this out and they will not turn over the body because i think that will be another shock but the important thing is whenever you are law and.


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