Khashoggi death triggered Business world deserting Saudi investment event. But will Saudi’s isolation be continued?
The death of Jamal Khashoggi- the protest against which has become synonymous with the protest against the Desert Kingdom of Saudi Arabia- has snowballed into a full-blown trouble with obvious ramification on the international level. It has drawn condemnation from the West and a severe dent to its reputation as a budding reformative country. Now, the international scepticism over Khashoggi’s death and Riyadh’s culpability has had the business world isolating the upcoming investment summit. In a what can be called as a Public Relation disaster, the biggies of the business and finance sphere have pulled out of the Future Investment Initiative conference which was self-proclaimed by Saudi Arab as the “Davos in the Desert”.
On October 2, Khashoggi entered the Istanbul Consulate while his fiancée waited for him outside. The CCTV footage of which is now is being flashed on every TV channel and social media. However, he never came out. Initially, what was believed to be a kidnapping incident, soon turned into a murder mystery as the Turkish officials said he was killed inside. The Turkish officials even claimed that they had audio and visual evidence of the 15 men (believed to be Saudi men) speaking in Arabic and trying to intimidate, torture Jamal Khashoggi. The Saudi government though after initial weak denials have admitted that he was killed after “discussions” turned physical.
But, who was Jamal Khashoggi and why were Saudi officials after him?
Who was Jamal Khashoggi?
The 59 years-old Jamal Khashoggi hails from one of the influential and affluent families of Middle East. His most family members have made their name in either business or literary world. His families had also been one of the closest to the Saudi royals. Jamal, however, was one of the sternest critics of Saudi Arabia’s current leadership. He had served at the top Saudi news channels and Newspapers. His journalistic stint also includes the interview of Osama bin Laden who went on to become al-Qaeda chief in the 1980s. Due to his criticism of the government and rampant religious extremism, he was oftentimes fired from his job.
In between his journalism career, Khashoggi also served as an adviser to the Saudi ambassador to London, Prince Turki Al-Faisal, a former long-serving intelligence chief. Then, in 2005, when the prince was appointed the Saudi envoy to the U.S., Khashoggi joined him as a media aide. After the Saudi crown prince Mohammad Bin Salman began running the show, Khashoggi constantly criticised him for the shrinking space for freedom of speech under his regime. He ended up self-imposing exile on himself after he told his friends and family that he feared for his life in Saudi Arabia. Since last year, he was employed with The Washington Post as a columnist and commentator on the geopolitics of middle-east. Many of his columns were critical of the Saudi leadership which would be translated into Arabic as well. In one of his last columns, he urged Prince Mohammad to end the war he started on Yemen more than three and a half years ago: “The longer this cruel war lasts in Yemen, the more permanent the damage will be. The people of Yemen will be busy fighting poverty, cholera and water scarcity and rebuilding their country. The crown prince must bring an end to the violence and restore the dignity of the birthplace of Islam.”
The Saudi Explanation:
The Saudi authorities initially distanced themselves from the death of Khashoggi. Prince Mohammad talking to Bloomberg in Riyadh a day after Khashoggi’s mysterious disappearance said that the Saudi government is very keen to know what happened to him.” His brother, Prince Khalid bin Salman, who’s the kingdom’s ambassador to Washington, called Khashoggi a “friend” and praised him for dedicating “a great portion of his life to serve his country.”
It wasn’t until Friday that Riyadh admitted Mr Khashoggi was dead. The authorities said he was killed in a “fist fight” in its Istanbul consulate. Saudi aid a fight broke out between Mr Khashoggi, who had fallen out of favour with the Saudi government, and people who met him in the consulate – ending with his death. It claims that investigations are going on and so far 18 Saudi nationals have been arrested.
However, some anonymous Saudi officials have revealed it to the Reuters news agency that he was indeed killed inside the consulate and the body was disposed of as a part of the cover-up.
After the reports emerged that Jamal Khashoggi was allegedly murdered in the Istanbul consulate, Saudi Arabia faced a strong verbal ire from the countries around the world especially the West. Even the Saudi Arabia allies have criticised and sought more explanation from Saudi.
While German Chancellor Angela Merkel criticised Riyadh’s explanation as “inadequate”, the UK foreign office described it as “a terrible act” and demanded people responsible for this to be held accountable. French Foreign Minister Jean-Yves Le Drian responded saying many questions “remain unanswered”. The UN secretary-general, António Guterres, called for the truth to be made clear.
The United States’ stand, however, has been guarded. While the US President Donald Trump said he is not satisfied until they find the answer, he avoided clarity on sanctions against Saudi. He said that sanctions were a possibility quickly adding that halting an arms deal would “hurt us more than it would hurt them”. It is to be noted that Jared Kushner, Trump’s son-in-law has close business ties with Saudi Arabia.
India has yet not taken cognizance of the issue and has so far given no response or comment.
Business world isolates the Riyadh event:
The controversy surrounding Khashoggi’s death and alleged state culpability has taken a heavy toll on Saudi Arabia’s big Public Relation exercise that is to be held at country’s capital later this month. Many business groups have already withdrawn from the Riyadh conference. Some of the business big-wigs that have pulled out of the event are The World Bank, The Financial Times, CNN, Bloomberg, The New York Times, Ariana Huffington- the LA Times owner, Dr Patrick Soon-Shiong, CNBC anchor Andrew Ross Sorkin.
Sir Richard Branson, Viacom and even Uber (which has the Saudi Kingdom as the investor) announced their withdrawal. Christine Lagarde, the International Monetary Fund head, is listed as a speaker at the conference, however, her presence at the event is not confirmed. On the other hand, the US treasury secretary, Steve Mnuchin, said he still planned to attend.
The conference was looked forward to from the point of view of the Vision 2030 document presented by the Saudi crown prince MBS. The vision document laid out plans to make the Saudi economy less dependent on oil exports and focused on substantial growth. Many projects in the vision document heavily relied on overseas investment. The conference would have been an excellent PR for the country that is being projected as reforming under MBS. With the event now being deserted by the Business community, it is indeed an international embarrassment for the country.
Will Saudi’s isolation continue?
Saudi has often been criticised for its Islamic conservatism and lack of reverence to Human Rights. There have been demands for more accountability from the Saudi kingdom. However, as the Middle-Eastern country had deep pockets that satisfied the West’s thirst for capital, no serious action was taken against the country. The shine of capital inflow from the Saudi Kingdom blinded the West and governments around the world to its Human Rights violations. Khashoggi’s death changed that. But will Saudi’s isolation be continued? Hardly anyone differs that it may not.
As Mihir Sharma points out in this Bloomberg column, many countries do not want to run the risk of being seen on the side of the bad guy (Saudi) at the moment. He asks an important question,”- that are we going to somehow isolate Saudi Arabia from the global economy?” Adding the most obvious answer further, “That’s not going to work as long as the country remains is the world’s largest oil exporter.” Defence and strategic expert, Seshadri Chari says, “It is a catch-22 situation for the West. It cannot isolate Saudi Arabia as it represents the Sunni world as against Shia power representative Iran. Since WW2 the US and Europe have not been able to balance both.” He further adds, “Ironically, both these countries are the biggest energy suppliers to most of the countries around the world.”
Sharma further points out, “The Saudis are already the biggest investors in Silicon Valley start-ups; AI industry insiders say they will likely end up owning crucial intellectual property going forward.” Not only the big businesses but the Saudi’s are also funnelling money to various governments around the world for various infrastructure projects. The Saudis are pouring $20 billion the into U.S. infrastructure. Even India’s big renewable energy push — 175 gigawatts of capacity by 2022, of which 100 gigawatts is meant to be solar — depends crucially on at least $100 billion of Saudi investment in the sector.
He further argues, “Across the world, long-term capital is thin on the ground and absolutely everyone wants it. The Saudis represent the motherlode.” Thus, it is hard for the world to isolate or even abandon the Saudi Kingdom who is sitting on the power source of funds and oil. As Mr Chari says, “The supposed isolation is temporary and once the dust settles down, it will be back to business.”
Why Congress’ strategy to keep everyone guessing in Rajasthan will work?
Congress has very strong chances of lifting the trophy in Rajasthan. However, the dilemma is who will lift it? Gehlot or Pilot?
“I will contest the Assembly elections following the Aadesh (order) of Congress president Rahul Gandhi and on the Nivedan (request) of Ashok Gehlot,” uttered Rajasthan Pradesh Congress Committee chief Sachin Pilot. He was talking at a Press Conference in Rajasthan. The Press briefing that was called to welcome Bharatiya Janata Party MP Harish Meena into the Congress fold soon turned into an event of a confrontation.
Moments before Pilot’s humble but near sarcastic acceptance of him contesting the election, it was AICC general secretary and former Rajasthan Chief Minister Ashok Gehlot who announced that both he and Sachin Pilot would be contesting the upcoming assembly election. It is not new for the Rajasthan Congress heavyweights to be asked about the infighting within the state unit. The leaders have been denying it for quite a sometime.
On Wednesday, when Gehlot was asked about it, he said, “Reports about infighting in the Congress have been in circulation for some time now. This is a BJP conspiracy.” He announced, “The Congress in Rajasthan is united and both Sachin and I will contest the election unitedly.” The authoritarian tone of the statement even surprised the State Congress Chief Sachin Pilot. However, the visibly startled Pilot soon regained control of the situation and said that he will contest election upon the orders of Rahul Gandhi and request of Ashok Gehlot.
Pilot and Gehlot both contesting the assembly election clearly mean that curtains will not be drawn on the debate of CM candidate soon. The infighting within the Rajasthan Congress between the Gehlot and Pilot faction is the major headache of the Congress which is hoping for a resurgence in the state election.
Pilot vs Gehlot:
It was in September this year when during a press conference, Ashok Gehlot had said, “When the face has been in front of you for 10 years, where is the need of talking about a new face?” He was referring to his own 10 years of experience as Rajasthan CM. While Gehlot has been somewhat vocal about his aspiration to be the Rajasthan CM for the third time, Pilot has been tight-lipped about his ambitions. When he was asked the same question, he avoided the question by saying that he is not in the CM race and is “only working to ensure the party’s thumping victory”. However, the supporters of Sachin Pilot feel that he is the rightful contender of the CM throne.
However, both the leaders supposedly buried their differences and tried to contain the clash between their supporters. This was evident throughout the ‘Sankalp’ rallies organized by the party. A rally in Karauli- a tribal region of Rajasthan put to rest all the talks of differences within Congress state unit. Making their way through the sea of people spread over 20 km from the rally venue, both Gehlot and Pilot arrived on a bike. Sachin Pilot was riding the bike while Gehlot sat on the back seat. When they reached the venue, the party cadre even hailed then as “Jai-Veeru” of the state Congress. Not too long ago, both of them also were seen sharing the same bus seat during a campaign.
Though the efforts have been made by the duo to show that Congress Unit is united, the underlying reality as everyone senses is that both Pilot and Gehlot are CM aspirants. Gehlot has a wealth of vast and diverse experience in active politics in his kitty. Since he was appointed as the AICC state in-charge during the Gujarat Assembly election, his stature in the party has only risen. He is now seen amongst the closes aides of Congress President Rahul Gandhi.
On the other hand, Sachin Pilot who is almost three decades younger than Gehlot has mobilization of grassroots workers to his credit. The two times MP, lost in 2014. But the party still handed over the reins of state Congress committee to him. Since the last five years, Pilot has been touring Rajasthan connecting with voters and workers alike. The young Turk comes as the fresh face among the veterans. He is quite popular among the youngsters of the state. Besides, he is a close friend of Rahul Gandhi.
Congress’ formula- Keep them guessing:
The anti-incumbency against BJP and Vasundhara Raje government is turning a boon for the Congress. The party has very strong chances of lifting the trophy in Rajasthan. However, the dilemma is who will lift it? Gehlot or Pilot? Both are strong contenders of the CM post. It is a difficult choice for Rahul Gandhi to make.
However, the party chose to douse the fire for now. Congress is best known for not announcing its CM candidate ahead of the election. Even in MP, the party has refrained from projecting a CM face between Kamal Nath and Jyotiraditya Scindia. Announcing a CM face between Gehlot and Sachin Pilot would mean turning the supporters of these factions against each other.
If the party announces Gehlot as its CM candidate, chances are young voters-supporters of Pilot would turn against Congress. Had it announced Pilot as the CM face, the veterans-supporters of Gehlot and senior party leaders would rebel. And no wise political leader would want a rebel in the poll-bound state party unit.
The Congress is keeping voters and party workers guessing. Surprisingly, as opposed to the argument that announcing a CM face will help driving a clear campaign, this formula seems to work for Congress. The idea is simple. Both the factions want to see their leader as the Chief Minister. Now that both Gehlot and Pilot are contesting, the supporters would put their best foot forward to ensure their leaders have an edge. Which, eventually will help the Congress party on a broader scale.
With clearing the air around the Pilot and Gehlot contesting the elections, the Congress has doused the fire for now. But the real challenge will be faced by Rahul Gandhi in case the party wins the elections. While the temporary solution avoids a full-blown confrontation between the Gehlot-Pilot factions, he needs to work towards a middle way out.
How the deadly 2013 Maoist attack wiped out entire Congress leadership in Chhattisgarh
The deadly Darbha Valley attack by Maoists wiped out almost entire Congress leadership in the state of Chhattisgarh.
The campaigning for the Chhattisgarh Assembly elections first phase wound up today. The two primary political parties in the race fired stinging shots at each other on the last day of campaigning. While, Congress President Rahul Gandhi graced the battleground Chhattisgarh on the last day; from BJP, star campaigner UP Chief Minister Yogi Adityanath and party president Amit Shah held the fort.
On Friday, Prime Minister Narendra Modi addressed his first rally in the state in Jagdalpur. Lashing out at the Congress, he said that the opposition Congress is trying to protect the ‘Urban Maoists’. “Urban Maoists live in air-conditioned surroundings, move in luxury cars and send their children to study abroad, but ruin the lives of children here. Naxalites kill our Jawans and Congress calls them revolutionaries,” said Prime Minister Narendra Modi. The obvious reference was UP Congress chief Raj Babbar’s remark that Naxalites are revolutionaries who have lost the path.
For the BJP, which is battling anti-incumbency of 15 years in the state, this apparent gaffe by Congress leader came as a handy tool. Having known Prime Minister’s ability to set the narratives it wasn’t surprising that he decided to corner Congress on Babbar’s comment. In the past too, during Gujarat Elections, Mani Shankar Ayyar’s “Neech” comment was used by PM Modi against Congress.
Toeing his line, UP CM Yogi Adityanath and Party President Amit Shah continued hitting the raw nerve and attacking Congress over the issue. While talking to reporters Amit Shah said that Congress which calls Naxalites as revolutionaries cannot think of state’s development; Yogi Adityanath at a separate rally accused that Congress in the state fuelled Naxalism for its selfish motives.
As the tables seem to turn against Congress over the recent row, one must also recall the deadly Darbha Valley attack by Naxalites which wiped out almost entire Congress leadership in the state. Incidentally, the attack had happened a few kilometres away from Jagdalpur.
Jis party ko naxalwaad mein kranti dikhai padti ho, naxalwaad kranti ka maadhyam dikhai padhta ho, woh party Chhattisgarh ka bhala nahi kar sakti: BJP President Amit Shah in Chhattisgarh's Raipur pic.twitter.com/UJ10d21LED
— ANI (@ANI) November 10, 2018
It was on May 25, 2013, a few days before the 2013 Chhattisgarh Assembly elections that the stalwarts of state Congress were killed in the Maoist attack. The attack caused the death of more than two dozen people of which twelve were Congress leaders and workers. The attack which was termed amongst the deadliest attack killed former state Minister Mahendra Karma, Chhattisgarh Congress chief Nand Kumar Patel and Vidya Charan Shukla a senior Congress leader who succumbed to his injuries two weeks later.
The attack was carried by the Maoists in response to the offensive launched by the UPA government to tackle the Maoist insurgency in the state. Enraged by the mobilisation of security forces in the region, Maoists continuously targeted police personnel and political leaders.
Darbha Valley attack:
On May 25, 2013 Leaders of the Congress party were carrying out a Parivartan Yatra in the state, with a convoy of 25 vehicles carrying around 200 Congress leaders and workers. They were returning from a meeting organised in Sukma. Congress was hoping to end the decade-long rule of BJP’s Raman Singh in the state with the crackdown of Naxalism as their main poll-plank. Senior Congress leader Mahendra Karma had even emerged as the prominent proponent of Anti-Naxal operation in the state. The Adivasi strongman from Bastar even launched Salwa Judum- a militia composed of tribal youths to counter the Naxal insurgency. His efforts were also supported by the Chhattisgarh government. Though his anti-Naxal efforts put him in the race of Chief Ministership, it also put him in the hit-list of Maoist.
When the convoy of Congress leaders reached the deeply forested area of Dharba valley on Jagdalpur-Sukma Highway, it was blocked by trees felled by Maoists. The Maoists triggered an IED near the fourth vehicle in the convoy. As soon as vehicles slowed down, around 250 Maoists hiding in the adjoining hilltops of the Jeerum hills opened fire from both the sides. The personal security officers of the Congress leaders took positions and tried to defend them but the firing continued for over 90 minutes.
The Maoists waited for the PSOs to run out of ammunition before asking the Congress leaders to surrender. The Maoists, however, started firing indiscriminately when the Congress leaders emerged from their vehicles. The eyewitness said that when the Maoists struck, the mobile phones of all the leaders were also taken, as the attackers asked the names of the leaders, shooting some of them while leaving others alone.
In this attack, entire Congress leadership along with eight security personnel and CRPF soldiers were killed. Mahendra Karma who was on the hit list of Maoist was shot dead by 100 bullets and stabbed brutally 78 times. Congress leaders Nand Kumar and Dinesh Patel were also abducted. They were found dead a day later with several fatal injuries. Congress worker Yogendra Sharma was also killed.
Chhattisgarh Congress’ leadership crisis:
The first phase of the Chhattisgarh assembly election is to be held on November 12 in Bastar and other Naxal-affected areas of Chhattisgarh. Despite a strong anti-incumbency of fifteen years, Chief Minister Raman Singh is expected to gain an edge and retain his position.
Congress, on the other hand, which lost out on the alliance with Mayawati’s BSP is still in a lurch of leadership that can take on Raman Singh. Since the attack wiped out some of the strongest leaders of the Congress, a party couldn’t develop even a single leader who can challenge Raman Singh’s legacy. Though in the last assembly elections, the difference between the vote share of Congress and BJP was just 0.7%, many polls have predicted it to be widening this time.
With the current leadership entangled in conflicts and controversies, the party may find it difficult to come to power despite favourable conditions.
Why Urjit Patel may not resign despite rift with Modi and Co.
If Urjit Patel would have resigned, the confidence of foreign investors in the Indian Economy would take a serious hit.
The shake-up in India’s apex financial institution RBI and the Modi government came to a defining turn on Wednesday as the reports expressing the possibility of RBI governor Urjit Patel stepping down started doing rounds. CNBC TV18 first reported that the RBI governor may consider resigning from the post as the split between the central bank and ruling Modi government became more apparent in the recent days.
The government and the RBI came to loggerheads after the deputy governor Viral Acharya hinted in a speech on Friday that the government is trying to hinder the independent working of the institution. Stressing on the importance of autonomy of the RBI, Acharya warned that undermining a central bank’s independence could be “potentially catastrophic”. His warning came amidst the reports that government is pressurising RBI to relax its policies and trying to reduce its powers.
In a speech to top industrialists, he even cited Argentina’s 2010 economic crisis as an example. Acharya recalled Argentine government’s meddling in its central bank’s affairs led to a surge in bond yields which in turn hurt the South American economy. Reportedly, the government officials were hurt that Viral Acharya chose to talk about the rift between the government and the central bank in public. Many also believe that the RBI governor Urjit Patel too, shares the same views as that of Acharya.
The spat became more public on Tuesday when Finance Minister Arun Jaitley blamed the institution for “lending spree” during UPA era. While speaking at an event in New Delhi, Jaitley said, “The central bank looked the other way when banks gave loans indiscriminately from 2008 to 2014.”
According to a CNBC TV18 report, a source said that there is an “irreversible breakdown between RBI governor and the government”. However, by afternoon the doubts surrounding Patel’s resignation were put to rest. RBI governor called for a board meeting on November 19 clearly indicating that there is no resignation on cards as of now. The Finance Ministry too issued an official statement for the first time to clear the air. “The autonomy of the central bank, within the framework of the RBI Act, is an essential and accepted governance requirement. Governments in India have nurtured and respected this,” the statement read.
Though the full-blown confrontation between the government and RBI has deferred, for now, it doesn’t mean that the differences between the two have been buried. Moreover, it certainly doesn’t indicate that all is well with RBI and government. However, there are many reasons why despite the strong disagreement with Modi government, Urjit Patel has chosen to stay or as it seems.
#GovtVsRBI | Rift between RBI & govt widens after Oct 30's FSDC meeting.
— CNBC-TV18 (@CNBCTV18Live) October 31, 2018
The economic crisis India is witnessing is becoming more and more apparent though, the government has been reluctant in accepting that there is a crisis in the first place. In such a scenario, a war of words playing out between the Finance Minister and Deputy Governor of the Central bank indeed sends a wrong signal. If Patel resigns now, the confidence of foreign investors in the Indian Economy will take a serious hit. Though it may not lead to drastic impact such as investors pulling out of India, however, it does give a bad impression and raises the question on the credibility of the institution.
On the other hand, for Urjit Patel quitting now is like leaving the ship to sink. As HW Business and Finance Editor Akhilesh Bhargava points out, “A commander will not leave the battle even if he is going to retire the next day. The situation for Urjit Patel is somewhat similar. If he quits amid the government-RBI standoff, it will adversely impact the stock market, the rupee will weaken and interest rates will soar.” For any banking professional economic crisis credited to him/ her is bound to bring minus marks on the report card. Urjit Patel certainly would not want that especially in the last leg of his tenure as 24th RBI governor.
While Patel avoided the disaster by not resigning, the government has a lot of answering to do. Why did Finance Minister belittle RBI- the apex financial institute of the country at an event that was attended majorly by the foreign audience? Though it was Viral Acharya who had publicly given a hint about RBI’s rift with the government, Finance minister could have found out a better way to handling the dispute. His statement only further fuelled the fire instead of dousing it.
Secondly, it also raises questions on the policy decisions taken by the Finance Minister and the Prime Minister. Earlier, former RBI governor Raghuram Rajan was said to have differences with the Modi government over a policy matter. Same was the case with Arvind Pangaria, first NITI Aayog VC and Arvind Subramanium, Chief Economic Advisor. Both of them stepped down before their tenure came to completion. Though the government said both of them left due to personal reasons, the pattern certainly cannot be ignored. The economic experts deserting the Modi government begs an important question of whether or not the Modi govt’s policies are flawed?
While it casts a shadow on the functioning of Finance Minister, the RBI crisis affects PM Modi the most. The CBI vs CBI and later the CBI vs government fight was not enough already, the Modi government is hit with another institutional crisis. PM Modi’s image as a leader in control has seriously been dented due to this. The two crisis have rather placed Modi as a leader with no control while the apex institutions are either dealing with infighting or are in a stand-off with his own government.
As of now, Urjit Patel’s decision of not quitting the post has avoided the catastrophe. Will the government be able to find a way to successfully deal with the RBI crisis or will it prove to be a calm before the storm? All eyes are now on the November 19 RBI board meeting.
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