Riyadh seems to have found the way to curb the budget deficit caused by lower oil prices. As the Financial Times report, Saudi officials are offering the arrested royals a deal – pay up to 70 percent of your wealth and go free.
The Saudi government could appropriate hundreds of billions of dollars from the arrested to refill depleted state reserves, according to the media.
The arrested include Prince Al-Waleed bin Talal, businessman Waleed al-Ibrahim, the founder of the Middle East Broadcasting Center, which owns the Saudi satellite television channel Al Arabiya, and Bakr bin Laden, chairman of the Saudi Binladin construction firm.
The billionaires are being detained at the Ritz-Carlton Hotel in Riyadh.
“They are making settlements with most of those in the Ritz,” FT’s source said. “Cough up the cash, and you will go home.”
Last week, the Wall Street Journal reported that arrests of Saudi royals, ministers, and businessmen could lead to the confiscation of cash and other assets worth at least $800 billion.
Saudi Arabia has faced a significant budget deficit since the oil price collapsed. It stood at $79 billion last year. To cut the deficit, Riyadh has tried to implement fiscal measures, including spending cuts, raising taxes, bond sales and a future public offering of part of the kingdom’s oil monopoly Saudi Aramco.
Experts have said the latest Saudi corruption purge is about Crown Prince Mohammed bin Salman consolidating power before taking the throne. Others see it as an attempt to modernize Saudi Arabia. The crown prince has explained the arrests as part of his determination to root out corruption, a precondition of a more open economy.