[Marxism] Saudi sovereign fund to invest $10bn in Russia

Louis Proyect lnp3 at panix.com
Tue Jul 7 05:57:27 MDT 2015


FT, July 7, 2015
Saudi sovereign fund to invest $10bn in Russia
by Kathrin Hille in Moscow

Saudi Arabia’s sovereign wealth fund has agreed to invest $10bn in 
Russia, in a powerful sign of the rapprochement between Moscow and Riyadh.

The Public Investment Fund signed a deal with the Russian Direct 
Investment Fund for the largest foreign direct investment yet in Russia, 
RDIF said late on Monday. “The first seven projects have received 
preliminary approval, and we expect to close 10 deals before the end of 
the year,” said Kirill Dmitriev, RDIF chief executive.

The deal, which was initiated with a memorandum of understanding during 
the St Petersburg Economic Forum last month, comes as Riyadh and Moscow 
are working to rebuild relations long plagued by the Russian 
government’s support for the regime of Bashar al-Assad in Syria.

RDIF declined to comment on whether the investment was part of this 
political agenda, but Mr Dmitriev said Mohammed bin Salman al-Saud, 
deputy crown prince and defence minister, had played an “immense” role 
of support in sealing the deal. The prince visited St Petersburg with a 
large delegation during the economic forum and participated in president 
Vladimir Putin’s meeting with global investment fund heads.
Mr Dmitriev said RDIF had been working for more than a year on bringing 
PIF to Russia, and the political climate might have helped close the 
deal. “Sometimes the wind can help bring the ship to its destination,” 
he said.

Since King Salman ascended the Saudi throne in January, his government 
and that of Mr Putin have tried to bridge their differences on possible 
ways out of Syria’s four-year civil war. While Riyadh backs “moderate” 
Islamists in Syria, Moscow remains resolutely opposed to any engagement 
of Islamist forces as a means of stopping the rapid expansion of the 
Islamic State of Iraq and the Levant (Isis).

But Mr Putin and King Salman have discussed the issue on the phone, 
followed by a visit of Mr Putin’s envoy for the Middle East, deputy 
foreign minister Mikhail Bogdanov, to Riyadh, and the Saudi defence 
minister’s visit to Russia. A visit of King Salman to Moscow is being 
discussed.

RDIF said PIF’s funds would be invested in projects for infrastructure, 
retail, logistics and agriculture over a period of up to five years, and 
the Saudi investment vehicle would invest together with other foreign 
sovereign wealth funds mostly from Asia, including the Russia-China 
Investment Fund, a $2bn vehicle backed by the China Investment 
Corporation and RDIF.

RDIF also agreed to invest jointly with the Saudi Arabian General 
Investment Authority in projects in Saudi Arabia and other Middle 
Eastern countries.

PIF’s commitment adds to pledges from Asian and Middle Eastern sovereign 
wealth funds to Russia. Until 2013, RDIF had established partnerships 
with western sovereign funds. Since then, the Russian fund’s new 
partnerships have been dominated by Asia and the Middle East as Russia’s 
political stand-off with the west has made US and European funds 
cautious over teaming up with a state-backed entity.

Mr Dmitriev urged European investors to interpret the Saudi deal as a 
signal to come back. “Europe needs to continue to work with Russia,” he 
said.



More information about the Marxism mailing list