King Salman turns to a steady pair of hands in Ibrahim al-Assaf to draw in foreign investment amid Khashoggi crisis.

When he emerged on the political scene in 2015, 33-year-old Mohammed bin Salman, known by his initials MBS, was given a rock star’s welcome by US politicians and Silicon Valley executives.

Saudi Arabia‘s young crown prince had a vision for the kingdom: He planned to diversify the economy, improve public services, such as healthcare and education, and drastically reduce dependence on oil.

But nearly two years on, the world’s youngest defence minister and de-facto ruler of one of its last absolute monarchies, has failed to keep pace with most of his proposed reforms.

On Thursday, his ageing father, King Salman bin Abdulaziz, 83, reasserted his power as the kingdom struggles with its worst diplomatic crisis since the September 11, 2001 attacks.

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Foreign Minister Adel al-Jubeir, who has repeatedly defended the monarchy following the brutal murder of Washington Post columnist Jamal Khashoggi, was demoted to the position of minister of state for foreign affairs.

In return, 69-year-old Ibrahim al-Assaf, who was arrested last year during MBS’ so-called “anti-corruption” drive, was brought in as his replacement.

The other notable cabinet changes saw Prince Miteb bin Abdullah fired as the chief of the National Guard, while Khalid bin Qirar al-Harbi was named general security chief and Musaed al-Aiban was appointed national security adviser.

Western businesses have looked askance at what's been going on in Saudi Arabia. It's not just the murder of Jamal Khashoggi, but it's also the many other blunders that MBS has conducted - the first and most obvious being the terrible war in Yemen Bill Law, Middle East analyst

Marwan Bishara, Al Jazeera’s senior political analyst, said Assaf’s appointment was a “signal” from Riyadh to the international community that it was “open for business – literally”.

“The Saudis are trying to send a message that they want to change, they want to regain confidence and credibility in the international community, especially among the international business community.

“And since Assaf was something of a star at the Davos summits and the World Economic summits in previous years, Riyadh reckons he’s the man for the new challenge – which is to bring back business and much-needed investment.”

‘MBS needs foreign investment’

The outcry over Khashoggi’s brutal murder in October saw dozens of prominent CEOs and international media pull out of MBS’ “Davos in the desert” summit, the crown prince’s attempt to suck foreign investment into the Saudi economy.

The murder, as well as the Saudi government’s shifting narratives, fractured Riyadh’s relations with its Western allies, and according to Forbes, foreign investment in the local stock market – Tadawul – has been falling steadily.

International shareholders controlled 5.1 percent of all listed shares on September 27, Forbes said, but the list of shares fell to 4.7 percent by early November.

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The fall was not a surprise. The UN reported earlier this year that foreign direct investment had fallen by 23 percent in 2017 to $1.4bn, its lowest level in 14 years.

“Western businesses have looked askance at what’s been going on in Saudi Arabia,” said Bill Law, a Middle East analyst.

“It’s not just the murder of Jamal Khashoggi, but it’s also the many other blunders that MBS has conducted – the first and most obvious being the terrible war in Yemen.”

MBS has faced widespread criticism in recent months for the horrific humanitarian disaster unfolding in Yemen where more than 20 million people need some form of humanitarian assistance.

The kingdom has been heading a US-backed military coalition fighting against Houthi rebels since March 2015, and has launched more than 18,000 air raids on the impoverished country.

Schools and hospitals have not been spared from the bombardment, and according to Save the Children, an estimated 85,000 children under the age of five have starved to death as a result of the war.

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Saudi Arabia and the United Arab Emirates (UAE) have also maintained a blockade on food and much-needed medicine in the Houthi-controlled regions of Yemen, resulting in a cholera outbreak.

“If we recall what happened in November 2017, he [MBS] also rounded up 200 senior members of the ruling family and business people, these were all individuals with very good connections with western business, the very people he needs to get western investment coming in,” Law said.

Many of them, including Prince Turki bin Abdullah, Prince Abdul Aziz bin Fahd and prominent businessman such as Mohammed al-Amoudi, are still missing and thought to be held in secret locations without access to legal advice.

“With the price of oil sitting at around $50 a barrel, the Saudis urgently need to get it over $70 a barrel. Until then, he [MBS] needs foreign investment to kick-start the Saudi economy so it can live up to Vision 2030.”

Vision 2030, the flagship programme of MBS, contains a list of ambitious aims including plans to start manufacturing 50 percent of all of its military equipment and for non-oil state revenues to increase five-fold.

Law added that Assaf’s appointment was intended as a statement to western businesses. “It’s like a ‘hey, look we might have made a mistake here, but we need your investment, the past is the past, let’s move forward’,” he said.

US Congress holds MBS’ fate

Besides Vision 2030, MBS has also announced several ambitious projects including Neom, a futuristic mega-city of self-driving cars and passenger drones.

Several foreign advisory board members, including British billionaire Richard Branson, have distanced themselves from the project following Khashoggi’s death.

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Rami Khouri, a non-resident senior fellow at the Harvard Kennedy School, said Assaf’s appointment was King Salman’s attempt at both consolidating his son’s authority and “steadying the Saudi ship”.

“Jubeir didn’t do too well when talking about the Khashoggi murder, but then again, nobody in Saudi Arabia did. They were all saying things which turned out to be untrue.

“So, it’s not as if Jubeir didn’t carry the load, he did. He was a loyal servant and has been for the last 30 years or so.

“But this is more of an attempt to show the world that changes are being made, despite there not being any real change in policy.

“The latest changes in the cabinet have brought in a lot of younger princes who are close to MBS, so that’s strengthened his grip on power to some extent, but it’s also brought in some experienced managers -Ibrahim Assaf and others.

“This will help steady the ship in terms of the management of the affairs of state.”

Several US senators, from both sides of the political divide, have expressed their anger over Khashoggi’s murder.

Riyadh has been a key ally of the US for decades and has grown closer with Washington under the Trump administration.

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Trump has pointed to a “$450bn” arms deal with Saudi Arabia and the kingdom’s position as a bulwark to Iranian expansion in the region as reasons to continue close relations.

“The US Congress is probably, right now, the single most important player [in determining MBS’ fate],” Khouri said.

“Ahead of the new Congress in January, they have taken several decisions which are critical of MBS and the Saudi leadership, [including decisions on] the Khashoggi murder, the war in Yemen and other issues – and it seems they’re not going to let go.

“MBS is damaged goods but he is not out of the picture. He is still a very strong player. His father just reaffirmed support for him and he’s brought in people who close to him, so they’re going to try and ride this one out.

“So his [MBS’] future is going to depend on a lot on what foreign capitals do in the next two months or so.”