The growing number of Western companies distancing themselves from Saudi Arabia over the alleged killing of dissident Jamal Khashoggi is undermining the kingdom's push to diversify its economy beyond oil and provide more opportunities for its young and often restive population.
By Friday afternoon, nearly a dozen tech, media and entertainment companies had backed out of a Saudi investment conference to be held this month, as dismay over Saudi agents' alleged murder of Khashoggi spread to companies that Crown Prince Mohammed bin Salman has tried to woo.
One of the firms that was among the recipients of the $27 million the kingdom spent on U.S. lobbying last year, announced it would stop its representation. "We are terminating our relationship," said Richard Mintz, managing director of The Harbor Group.
The companies and executives backing away from the kingdom, including Uber Technologies Inc., Viacom Inc. and at least two prominent tech investors, are the very ones the crown prince has sought to cultivate over the past year as the kingdom attempts to modernize its economy and ensure jobs for its young population. More than 60 percent of Saudis are under age 30.
There may well be limits to the corporate world's willingness to censure the Saudis. Big banks and consulting firms that earn large sums issuing bonds for the kingdom or offering strategic advice have largely stayed mum on their plans to sponsor or attend the Riyadh conference, nicknamed Davos in the Desert. Some lobbying firms that work for the kingdom also withheld comment.
And so far the White House has steered clear of harsh criticism, with Treasury Secretary Steve Mnuchin on Friday saying he's still planning to attend the summit -- a statement that drew condemnation from two Senate Democrats.
President Donald Trump called Khashoggi's suspected killing a "terrible thing" but stopped short of assigning blame and noted that the dissident wasn't a U.S. citizen. He told reporters later Friday: "A lot of people are going over to the investment conference. We'll see what happens. Maybe some won't be going. We'll make that determination very soon."
A big aim of the crown prince is creating more of a private sector, to move people off the public-sector payroll, according to Karen Young, a Saudi expert at the American Enterprise Institute. "The demographics of the country are really under a lot of pressure. There is this tremendous youth bulge," and the tradition of offering "cushy government jobs is just not affordable," she said. "The decline in oil prices in late 2014 gave the government cover to say to the population, 'we have to do this now,'"
The Turkish government has told U.S. officials it has audio and video recordings proving Khashoggi was killed inside the Saudi Consulate in Istanbul this month. Saudi officials have denied any involvement in the disappearance of Khashoggi, saying he left the consulate shortly after entering.
Mohammed bin Salman came to power in June 2017, replacing his cousin as crown prince. Under his leadership the kingdom published its Vision 2030 strategy, laying out plans for attracting more foreign investment, boosting the role of women in the workforce and building a private sector in industries other than energy. The strategy also included plans for increasing the country's sovereign-wealth-fund investments overseas, which the kingdom pursued through the $3.5 billion purchase of a stake in Uber.
In the fall of 2017 the crown prince organized Saudi Arabia's first Future Investment Initiative conference, inviting scores of foreign business executives to Riyadh to showcase the kingdom's new economic agenda. And this spring bin Salman conducted a much publicized tour of the U.S., stopping in Boston, San Francisco and Los Angeles to cultivate ties to the tech and entertainment industries.
Before the protests against Khashoggi's disappearance began gathering momentum, the second Future Investment Initiative conference was scheduled to draw dozens of top Western business officials as speakers, according to the event's website. It listed more than a dozen Western companies as "partners" of the event.
That began to shift on Thursday night. Uber chief executive Dara Khosrowshahi, said in a statement Thursday that he was withdrawing and was "very troubled" by the reports about Khashoggi. "We are following the situation closely, and unless a substantially different set of facts emerges, I won't be attending the FII conference in Riyadh," Khosrowshahi said.
Tech investor Steve Case said he was suspending plans to attend the conference and a meeting for a Saudi tourism project. Bob Bakish, chief executive of Viacom Inc., owner of MTV and movie studio Paramount Pictures, also said through a spokesman Thursday he would no longer be attending the conference. Earlier Thursday, Viacom said it was "aware of the reports regarding Jamal Khashoggi" and "monitoring the situation closely."
Saudi Arabia's Public Investment Fund, which is organizing the event, didn't respond to a request for comment.
The companies' announcements follow some by U.S. media organizations and executives, including the New York Times and Los Angeles Times owner Patrick Soon-Shiong, that they would not participate in the event. Friday morning CNN and and Bloomberg also pulled out.
Branson was one of the first non-journalism executives to break with the Saudis. "I had high hopes for the current government in the Kingdom of Saudi Arabia and its leader Crown Prince Mohammed bin Salman and it is why I was delighted to accept two directorships in the tourism projects around the Red Sea," Branson said in a blog post Thursday.
"What has reportedly happened in Turkey around the disappearance of journalist Jamal Khashoggi, if proved true, would clearly change the ability of any of us in the West to do business with the Saudi Government. We have asked for more information from the authorities in Saudi and to clarify their position in relation to Mr. Khashoggi."
Well-known figures in the U.S. tech world also backed away from a Saudi project called NEOM aimed at building a tech and tourism hub in the northwestern corner of the country. Sam Altman, president of startup investment firm Y Combinator, said he was suspending involvement with NEOM's advisory board "until the facts regarding Jamal Khashoggi's disappearance are known."
But the finance and consulting industries have largely stayed quiet about the Khashoggi case. A spokesman for JPMorgan Chase & Co. said Thursday the bank had no comment on whether the alleged murder would affect chief executive Jamie Dimon's plans to speak at the Saudi conference.
Investment firm Kohlberg Kravis Roberts & Co. also declined to comment Thursday. Its chairman, Gen. David Petraeus, and co-president, Joseph Bae, are scheduled to speak at the event.
More than 30 other U.S. and European companies and executives listed as sponsors or speakers for the conference, including MasterCard, McKinsey & Company and Deloitte, did not respond to requests for comment. The Swedish-Swiss manufacturing giant ABB said it was "carefully monitoring developments."
The Brookings Institution said Friday it would "terminate" its "sole research grant" from Saudi Arabia, which was earmarked for an analysis of the Saudi think tank sector. "We felt we would be unable to conduct further research with this funding" given the Khashoggi case, Brookings said.
Several lobbying firms advocating for the Saudis, such as Hill and Knowlton and the BGR Group, could not be reached for comment. Representatives of the Glover Park Group, Hogan Lovells law firm and other Washington firms declined comment.
Privately, several Saudi lobbyists said they were waiting for more information to emerge before making a decision about continued participation in lobbying and public relations activities in Washington. One lobbyist said his firm was contemplating announcing that it would donate fees received from the Kingdom to charity.
Experienced lobbyists and watchdog groups said the Kingdom has been one of the leading foreign spenders in the capital. Ben Freeman, director of the Foreign Influence Transparency Initiative at the Center for International Policy, a nonprofit advocacy group, called the nearly three dozen Washington lobbying and law firms funded by the Kingdom a "Saudi machine" that has been able to tamp down complaints about Saudi policies, including its role in Yemen's civil war.
Meantime, participation in a series of Saudi-hosted events in Washington, including next week's national day celebrations, seemed to be suffering.
"People are in agony over this," said one lobbyist, predicting that many prominent Washingtonians would not attend.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)