A recent report revealed the unsuccessful projects undertaken by Saudi Crown Prince Mohamed bin Salman (MBS). He tried to position himself as a youthful reformer rather than as a heedless prince who imprisoned human rights activists and killed a journalist, but he was unable to successfully navigate both Saudi opinion and the international arena.
The projects of MBS, which led the purported 2030 vision to diversify the Saudi economy, were deemed by Bloomberg as “insanely expensive and useless.”
Other economic newspapers and magazines exposed the Saudi government’s recourse, on MBS’s orders, to borrowing billions to finance the embattled projects Mohammed bin Salman is determined to see through to completion, even in spite of their high cost, impracticality, and significance to the common man.
The failure of MBS in his investments is noteworthy. Take Lucid, for instance, one of several up-and-coming electric car companies that was badly impacted by the slowdown in demand growth and the price war ignited by Tesla. This is regarded as the riskiest of MBS’s investments because it requires Saudi money to survive without yielding a sizable return.
For instance, despite its setbacks, Lucid managed to secure funding totaling one billion dollars from the Saudi government and 5.4 billion dollars from the Saudi Public Investment Fund. This came after the electric car manufacturer, Lucid, had signed an agreement to receive one billion dollars from a Saudi Public Investment Fund-affiliated company.
Lucid also disclosed that a $1 billion purchase of convertible shares will be made by Ayar III Investment Company, a division of the sovereign wealth fund. Lucid, which is dealing with lower-than-expected demand, stated that it plans to increase capital spending as well as other objectives with the money.
According to expert assessments, the Saudi government’s and the Investment Fund’s deals are doomed because they do not take into account the company’s competitive landscape or future prospects, rendering investment in the company pointless.
Newspapers and specialized institutions reported on other economic signals that the government’s pursuit of Vision 2030’s partial goals has become unachievable in the near future. This has caused foreign investors to exercise caution and forced the Bin Salman government to reevaluate its finances and scale back support for large-scale projects in order to close the unexpected budget deficit.
