Balance of Power: A Saudi Prince Wants to Reinvent His Kingdom

Saudi Arabia Plans $500 Billion Mega City

It’s been a headline-grabbing week in Riyadh, even by Saudi Arabia’s recent standards.

Crown Prince Mohammed bin Salman unveiled plans to build a city from scratch on the Red Sea coast, offering a lifestyle he said would be unmatched in the kingdom -- and even the world. It’s an outsized project in keeping with the prince’s known ambitions, from creating a sovereign wealth fund to dwarf all rivals and selling a stake in the world’s biggest oil company.

Yet the prince didn’t stop there. He vowed to crush extremism and take the conservative kingdom back to “moderate” Islam. He also included a line for oil traders, backing the extension of OPEC production cuts beyond March 2018.

The announcements stunned global bankers at an investment conference in the Saudi capital, and unsettled those still grappling with the pace of economic change in Saudi Arabia. Supporters predictably heaped praise on a bold attempt to transform the kingdom; others were quick to note how some previous mega-projects have failed.

The prince is trying to perform an unprecedented balancing act, remaking the economy as well as Saudi Arabia’s social and political fabric. Residents of his new city would enjoy freedoms unheard of in a kingdom founded on austere Islam. But it’s not yet clear he can deliver on his promises.

Saudi Crown Prince Mohammed bin Salman, center, attends the Future Investment Initiative conference in Riyadh, on Oct. 24. Photographer: FAYEZ NURELDINE/AFP

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Global Headlines

Show of sea power | The U.S. Navy has sent three aircraft carrier strike groups to the Western Pacific for the first time in a decade, as President Donald Trump prepares to visit Asia next week. Although the Navy described the USS Theodore Roosevelt's deployment as an overlap before another carrier group leaves the region, the move is part of a bigger buildup amid North Korea tensions.

Cohn won’t be Fed pick | The list of finalists to serve as Federal Reserve chair is narrowing. Trump has privately told people at least twice in the past week that he won’t appoint National Economic Council Director Gary Cohn. “Gary’s role is too crucial to getting tax reform done,” a senior administration official said. Trump, meanwhile, called current Chair Janet Yellen “terrific” and told Fox Business he’s considering giving her a second term.

Test for tax push | A House budget vote planned for today represents an early test for Republicans’ ambitious goal of delivering tax-overhaul legislation by year’s end. Speaker Paul Ryan is pressing ahead, despite calls for a delay from members of his party who fear their constituents would be hurt by plans to nix a tax break that benefits residents of high-tax states like New York and New Jersey. The vote could be a close one.

Kenya's reluctant vote | President Uhuru Kenyatta’s certain victory in today’s rerun of an annulled presidential vote in August will be tainted. The electoral commission chief said he can’t guarantee a credible ballot, the main opposition candidate quit the race and Western envoys pushed for a delay. Pope Francis and UN Secretary-General Antonio Guterres have called for restraint -- election violence in 2008 killed more than 1,100 people.

Berlin squeezes Ankara | Germany is tightening the screws on financing to Turkey from European development institutions as tensions escalate between the two countries. As Bloomberg reports exclusively, it has real consequences -- Germany is Turkey’s largest economic partner, accounting for more than $36 billion in bilateral trade last year. Turkey seems to be taking notice, announcing the release from jail of a German human rights activist this week.

And finally... Trump was en route to Dallas -- which holds a macabre spot in the annals of American presidential history -- when he teased the release today of the final batch of secret documents related to the 1963 assassination of President John F. Kennedy. “The long anticipated release of the #JFKFiles will take place tomorrow. So interesting!” Trump tweeted. While not the most ardent student of history to have occupied the White House, Trump has shown a penchant for conspiracy theories, even suggesting that 2016 Republican rival Ted Cruz’s father was involved in Kennedy’s death.

Assassination of President Kennedy. Mrs. Kennedy leans over dying President as a Secret Service man climbs on back of car.
Photographer: Bettmann/Bettmann

 

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