Saudi Arabia is offering President Trump investment in America’s decaying infrastructure and industry worth tens of billions of dollars as a sweetener for arms deals and better relations between the two countries.
Mohammed bin Salman, the deputy crown prince and in effect the prime minister, made the offer during a visit to Washington this year, sources said. Mr Trump is hoping that the money will be invested in the “rust belt” states whose support helped to propel him to the White House.
Estimates of the sums involved range from $40 billion to $200 billion — in addition to current and future arms deals valued at $300 billion, which will be announced during Mr Trump’s visit to Saudi Arabia, which starts today.
Saudi Arabia is determined to prevent any attempt to “rebalance” US Middle East policy away from its traditional allies and towards Iran, which it saw as President Obama’s goal. A financial partnership is thought to be one way of doing this. The government in Riyadh is also attempting a widespread economic restructuring programme and is looking to invest its oil money more aggressively abroad.
“It’s a classic business case,” said one Saudi official. He said the aim was to find new investments in the US that could offer higher returns than the sovereign wealth fund’s previously conservative strategies.
Yesterday Mr Trump shook off a week of dire headlines in Washington as he set off for Riyadh, where he is assured of a warm welcome. The Gulf states have made little secret of their desire for a fresh start with the new president and are ignoring the repeated controversies he has stirred up at home.
The streets of Riyadh are lined with billboards showing him and King Salman, with the slogan “Together we prevail”. They suggest that the purpose of the trip is clear: to co-ordinate action against terrorism and, from Saudi Arabia’s point of view, against Iran.
Mr Trump will meet the king and senior princes today. Tomorrow he will attend a gathering of leaders from across the Muslim world under the guise of an “Arab-Islamic-American summit” and deliver a speech. According to a leaked draft, Mr Trump will call for unity, casting the challenge as a “battle between good and evil”, and urging Arab leaders to “drive out the terrorists from your places of worship”.
The Saudis hope the summit will cement their authority as natural leaders of the Sunni Muslim world. Iran, predominantly Shia Muslim, is not invited.
It is also an opportunity to show off changes that Prince Mohammed is making to soften the country’s austere image. The weekend’s events will include a live concert by the American country music star Toby Keith and a Saudi balladeer, Rabeh Sager.
The arms deal builds on an already strong military relationship. President Obama approved sales worth $100 billion to Saudi Arabia during his two terms. Mr Trump’s outline figure of $300 billion, over the next ten years, is a significant increase in scale.
There is also a change in type. Mr Trump’s immediate tranche of $110 billion is thought to include weapons put on hold by the Obama administration — such as Raytheon laser-guided bombs — for fear they would be used in Yemen, which many in the West feel has incurred too many civilian casualties.
The investment deal to sweeten the pill of closer relations with a country that is widely reviled in the US was suggested in a visit to the White House in March by Prince Mohammed.
He also said that American companies would be given priority as Saudi Arabia opens up its economy under his ambitious “Saudi Vision 2030” programme, which is supposed to liberalise the economy and make it less dependent on oil.
As part of that programme he has ordered the sale of a 5 per cent stake in the national oil company, Saudi Aramco. The proceeds of up to $100 billion will be put into the sovereign wealth fund, along with cash from other privatisation deals. The fund, said to be worth $190 billion, would aim to reach $2 trillion, according to Vision 2030.
“Saudi Arabia is going to try to diversify its investments,” said Mohammed al-Yahya, an analyst with the Atlantic Council think tank. “The US is a natural market.” The sovereign wealth fund bought a $3.5 billion stake last year in the online car-hire service Uber.
Closer ties between the US and Saudi Arabia are not welcomed by human rights groups, which have urged Mr Trump to abandon support for the war in Yemen and to put pressure on Riyadh over issues of domestic abuse and discrimination against women.
●Yemen’s Houthi rebels said last night that they had fired a ballistic missile towards Riyadh. Saudi forces fighting the Iran-backed rebels later confirmed that they had shot down a missile in the desert in the southern province of Ar Rayn about 120 miles west of the city.
Country star flies the flag
Toby Keith, a country music star, spearheads America’s cultural outreach to Saudi Arabia this weekend. The Oklahoma-born singer, 55, is best known for his patriotic paean Courtesy of the Red, White and Blue, which is a favourite in US military bases overseas. The song is about America’s military response after 9/11 — in which most of the attackers were Saudis. His setlist for the male-only event in alcohol-free Riyadh tonight will probably exclude hits such as Whiskey Girl, Beer For My Horses, Drunk Americans and I Love the Bar. One ballad, The Taliban Song, which praises US forces fighting the Sunni terrorist group in Afghanistan, may be deemed too politically sensitive to play.