Saudi Arabia has sought to allay fears among investors after an anti-corruption purge that swept up a host of business and political titans, with concerns mounting that the arrests could trigger political instability.
Authorities have frozen the bank accounts of the accused and warned that assets related to the corruption cases would be seized as state property, as the government appears set to widen the crackdown.
The purge triggered uncertainty among businesses that could lead to capital flight or derail reforms, experts say, at a time when the kingdom is seeking to attract badly needed investments.
The central bank stepped in this week to soothe those concerns, insisting that the targets were errant individuals and not entire corporations — not even those with ties to the arrested businessmen. “Corporate businesses remain unaffected. It is business as usual for both banks and corporates,” the central bank said. The Saudi Arabian General Investment Authority (SAGIA), whose former chief Amr Dabbagh was reportedly among those arrested, sought to drum up support for the anti-corruption drive, saying it would create “a fair and level playing field for all investors”.
Saudi Arabia has posted more than $200 billion in budget deficits over the past three fiscal years. It is headed for a fourth year of shortfalls. To fund those deficits, the kingdom has withdrawn around $250 billion from its reserves since the end of 2014 and has borrowed around $100 billion from domestic and international markets.
