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Egyptian billionaire Naguib Sawiris will not invest in Saudi Arabia as he says he does not believe there’s rule of law in the country, and has some concerns about human rights there.
Asked by CNBC’s Hadley Gamble if he would invest in the kingdom, Sawiris said: “No, I would not.”
“Personally, I can invest anywhere in the world, why would I go somewhere where I am not convinced there is a rule of law and order. And that there is real democracy, and that people are free,” Sawiris said Tuesday at the MENA Summit 2019 in Abu Dhabi organized by the Milken Institute.
Saudi Arabia has been under intense scrutiny in recent months, especially after the high-profile killing of U.S.-based journalist Jamal Khashoggi, who disappeared last October after visiting the Saudi consulate in Istanbul. The Saudi journalist, who also wrote for the Washington Post, was a prominent critic of Crown Prince Mohammed bin Salman.
Turkish officials said he was killed by Saudi agents, but Riyadh denies those allegations. After more than two weeks of denying that he was kidnapped and murdered, Saudi authorities finally admitted he was killed inside the consulate.
Khashoggi’s death prompted the U.S. Treasury to impose economic sanctions on 17 Saudi officials, including the crown prince’s former top aide Saud al-Qahtani, who was fired as a result of the investigations.
“I think it goes together — political stability and economic stability, they go together. And also, you need to be somewhere you are comfortable,” Sawiris said, adding that Riyadh needs to “come straight on human rights.”
The kingdom of 33 million has seen steady drops in foreign direct investment flows over the last decade, something it needs for its ambitious Vision 2030 initiative to diversify the country’s economy and grow private sector jobs. Obstacles remain in the form of skills shortages, lower oil prices and rising unemployment in the kingdom.
There’s also been growing international concern over the unpredictability and repressive tactics of the kingdom’s powerful young crown prince.
In 2017, Crown Prince Mohammed ordered an anti-corruption drive, detaining hundreds of Saudi royals and businessmen in the Ritz Carlton hotel and confiscating large portions of their finances.
Emerging markets investor Mark Mobius also urged investors not to put their money in Saudi Arabia.
“The Khashoggi murder is a very bad situation, and as far as I’m concerned I don’t think we should be investing in Saudi Arabia for that reason unless there is some real big change,” Mobius told CNBC last week.
He also pointed to how the plummeting oil prices are “disastrous” for the country, a top oil exporter.
However, some investors, including Michael Milken, the founder of Milken Institute, remain bullish about Saudi Arabia.
Asked if the negative headlines in the kingdom would stop him from investing there, Milken said: “Not at all.”
The billionaire philanthropist pointed to “profound changes” in the kingdom in recent years, such as women being allowed to drive and the opportunity for young Saudi men and women to interact at concerts and social events today.
With Saudi Arabia’s booming youth population and its access to a massive regional market, numerous international investors — including BlackRock CEO Larry Fink and the Blackstone Group’s Stephen Schwarzman — remain committed to the kingdom and say they see significant long-term potential.
— CNBC’s Natasha Turak contributed to this report.