MBS Says Saudi Arabia Will Invest $1T in US

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00:00Tell me about this meeting, because it was kind of fascinating. It really wasn't

00:03about conversations around oil or the energy markets.

00:07It was absolutely fascinating, especially if you had an opportunity to watch the press

00:12conference live. I think everything from the marble floors to the White House to whether or

00:18not Saudi Arabia is going to join the Abraham Accords was covered. What's interesting is the

00:24amount of money that Mohammed bin Salman is talking about potentially investing in the

00:30United States. And I think the big question on everyone's mind is where are they getting

00:34this money from, given that oil prices are pretty low? And I think the answer really is

00:39you have to look at the Saudi investment fund, the PIF, because that's really where they have

00:45a lot of their investment dollars and ready to deploy. And it really that that that fund

00:52is really independent of the price of a barrel of oil. So I think the question of whether

00:57Saudi can deliver this money, the answer is yes. But whether they actually will deliver

01:04on this is another question. And I do think that a lot of that money is probably earmarked

01:10for defense purchases. And that really depends on whether they do go through with this agreement

01:15to sell Saudi Arabia F-35s and other defense equipment that is somewhat controversial and

01:21hasn't necessarily been sold to Saudi Arabia previously.

01:25Carol mentioned that you're the author of Saudi Inc., the history of Saudi Arabia and Aramco.

01:30And I wonder now how successful the Saudi Arabian government has been, the kingdom of Saudi Arabia,

01:37of diversifying its economy away from oil. Has it been successful?

01:42That is a really great question. And I think the answer is if you're looking at and you're trying

01:48to say, have they achieved the goals that they set out to achieve when they announced their big plan

01:53to diversify from oil? The answer is no, they have not really achieved those goals. I think really a lot

01:59of those goals were not achievable goals. What they have done is they have introduced some very

02:05important changes that I think can certainly help make the Saudi economy more robust over time.

02:11We're talking about making it easier for foreigners to visit the country, both for tourism,

02:16but also to work, opening up the workspace for women and important societal changes like that,

02:23I think in the long run will help diversify their economy. But if you're asking whether their economy

02:28is still very much dependent on the energy industry, the answer is yes. Aramco, on the other hand,

02:35has over the past 50 years, I would say, significantly diversified itself from simply

02:42an upstream company that sold a lot of crude oil to a very diverse energy company that has

02:49multiple revenue streams. So they're not just dependent on what the price of a barrel of oil

02:53is. They make a lot of oil products. They're getting into natural gas. They make money off of trading oil

02:59in the financial sense. And so they're making a lot of money that is not dependent on whether the

03:06price of a barrel of oil is $60 or $80. So I guess what I, this relationship that we are seeing

03:15between the United States and Saudi Arabia, I feel like it's always been a bit of a frenemy kind of

03:20relationship between the two nations. Having said that, there's been times where it's been stronger,

03:25times when it has not. Is this the relationship going forward, in your view?

03:32What's so interesting about the relationship between the U.S. and Saudi Arabia is that Saudi

03:37Arabia has a very different view of the relationship than the United States does. In the Saudi mind,

03:43the U.S. is a best friend, that they've always been so close. And they've cultivated an entire

03:49kind of aura and idea about this friendship. They think the U.S. is a huge ally.

03:55If you look at it from the U.S. perspective, Saudi Arabia is, at least it can be a strategic

04:00partner. But Saudi Arabia would not be considered an ally to the United States the same way Great

04:05Britain or Canada might be considered an ally. And so I think that that leads to very different

04:11opinions about what exactly is going to go on. So whether or not Saudi Arabia has a defense

04:18agreement, yes, traditionally we have had defense agreements. But from the U.S. perspective,

04:23that's not always so guaranteed. If it's beneficial to the U.S., then it will happen.

04:29But, you know, it's not necessarily a guarantee. It's not necessarily this allyship that the Saudis

04:35often perceive the relationship to be. Well, it's interesting when you say Canada and the U.K.,

04:39in particular Canada, I feel like, you know, it looks almost a friendlier relationship between the

04:44U.S. and Saudi Arabia than it certainly does between U.S. and Canada right now. I guess my question

04:49really, you know, Ellen, is are we laying the ground for whoever is in the White House next,

04:54be it Democrat or Republican, that this is the relationship? Or could it change and get

04:59different depending, again, who is in the White House?

05:02I think that there's always kind of a baseline. And you could see that when Trump was kind of

05:07fishing for a compliment from MBS as, you know, oh, well, he's the best president. You know, they've had

05:12the best relationship with Trump. And MBS kind of answered that with, well, we've always had,

05:16you know, Democrat or Republican, we've always had good relations with presidents of the United

05:20States. And then he mentions Reagan as a particularly good one. So I think that MBS is

05:25certainly looking at this as he's got to lay the groundwork for his good relationships with

05:30presidents that are going to come after Trump, whereas Trump is seeing it as the here and now.

05:35The military balance of power in the Middle East, the potential F-35s that Saudi Arabia could get

05:41as a result of making a deal with the United States. President Trump said he would approve

05:45selling the F-35 fighter jet to Saudi Arabia. I'm just wondering how that changes the balance of

05:52power when it comes to the militaries in the region, especially with regard to Israel, which for years

05:57has been a U.S. ally. And also what U.S. interest the U.S. would have an interest in selling F-35s

06:04apart from getting the revenue to a U.S. company?

06:07Exactly. I do think from Trump's perspective, he thinks that the F-35s are the greatest

06:13airplane ever to be made. And so he loves that everybody wants them. And so it's more of an

06:18economic issue. I think from the Pentagon's perspective, they're looking at it as more of

06:23a strategic issue. Now, the UAE apparently got assurances they would be able to purchase these when

06:29they signed the Abraham Accords. And it was believed that this would also be a condition for

06:34Saudi Arabia. I think it's very, very clear now that Saudi Arabia is not going to join the Abraham

06:38Accords. They're not recognizing Israel unless they get so unless there's an absolute there's an

06:44assured passport to Palestinian state. I don't see that happening anytime in the near future. So I

06:50think we're kind of going to be at a standstill here. And if the Pentagon has severe concerns about

06:56it, I think it may not actually go through as much as Trump wants it to go through.

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