A sovereign wealth fund for the Prince: economic reforms and power consolidation in Saudi Arabia

Forschungsbericht | Research report

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)

Object Details

• Alternative title: Ein Staatsfonds für den Prinzen: Wirtschaftsreformen und Herrschaftssicherung in Saudi-Arabien
• ISSN: 1863-1053
• Extent: Seite(n): 32
• Language: Englisch
• Notes: Status: Veröffentlichungsversion; begutachtet

References and Relationships

• Bibliographic citation: SWP Research Paper (8/2019)

Classification and Topics

• Subject: Internationale Beziehungen ; Wirtschaft ; internationale Beziehungen, Entwicklungspolitik ; Wirtschaftspolitik ; Saudi-Arabien ; Wirtschaftspolitik ; Wirtschaftsreform ; Wirtschaftsentwicklung ; Diversifikation ; Finanzierung ; Investition ; Machtpolitik ; Herrschaftssicherung ; internationale Wirtschaftsbeziehungen ; Politik ; Zielsetzung

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Roll, Stephan
• Event: Veröffentlichung
• (who): Stiftung Wissenschaft und Politik -SWP- Deutsches Institut für Internationale Politik und Sicherheit
• (where): Deutschland, Berlin
• (when): 2019

Further information

• DOI: https://doi.org/10.18449/2019RP08
• URN: urn:nbn:de:0168-ssoar-63533-3
• Rights: GESIS - Leibniz-Institut für Sozialwissenschaften. Bibliothek Köln
• Last update: 21.06.2024, 4:27 PM CEST