Against the backdrop of a dismembered journalist in addition to atrocities and war crimes in Yemen, Crown Prince Mohammed bin Salman (MBS) had planned to welcome “visionary and influential” leaders in “business, government, and civil society” to Riyadh this week for his second Future Investment Initiative (FII), a three-day conference on global economic development scheduled for October 23-25 2018 in Riyadh, Saudi Arabia.
Through private meetings, networking, curated roundtables and “deep engagement with global media” a group of elite invitees (non-transferable invitations require a passport and photo to register) proposed to outline a blueprint for the future of work in environmentally compromised yet technologically sophisticated (surveilled) smart cities operated under the purview of public-private partnerships.
Well-connected firms such as the Boston Consulting Group, Deloitte, McKinsey, Bain, Strategy&, and Ernst and Young had reserved seats at MBS’s table and are listed as summit partners on the FII website. Each of these firms is actively involved in social impact investing: here, here, here, here, here, and here.
I created a relationship map of the partners associated with this event. Access an interactive version of the map here.
Below is a detail of Bridgespan’s associations. Bridgespan, a Boston-based non-profit, emerged out of Bain and Company’s pro bono work during the mid 1990s. Bridgespan and Bain maintain a “deep strategic partnership,” collaborating on projects across public service sectors, including education. Many of Bridgespan’s clients are prominent players in the privatization movement. Consider the role of consulting firms like Bain in offering guidance on social impact investment opportunities to interests like the Crown Prince and you can see how Saudi Arabian capital could easily be directed to flow into US education markets via charters and “evidence-based” ed-tech “solutions.” In 2015, Bain enlisted former MA governor Deval Patrick to head the firm’s social impact investment fund. Patrick played an instrumental role developing pay for success contracts in the Commonwealth, notably the ROCA initiative. Access an interactive version of the map here.
Saudi ties to the grisly murder of dissident journalist Jamal Khashoggi in Turkey earlier this month introduced unanticipated wrinkles into the prince’s planned agenda, leading a large and growing number of high-profile participants, including Jamie Dimon of JP Morgan Chase, Stephen Schwarzman of Blackstone, and Diane Greene of Google, to withdraw from the event. Attendance at “Davos in the Desert” will be a fraction of last year’s 3800+ as officials, asset managers, lobbyists, and executives and government representatives scramble to find a way forward that enables them to retain access to the kingdom’s coffers and influence without drawing inordinate public ire.
The official sponsor of the Future Investment Initiative is the Saudi Public Investment Fund (PIF). Established in 1971, governance of PIF was reconstituted and transferred to the Council of Economic and Development Affairs, chaired by MBS, in March 2015. A substantial infusion of capital into the fund is anticipated in the near term from the public sale of up to five percent of Aramco, the Saudi national petroleum and natural gas company. Through implementation of Vision 2030, the Crown Prince aims to diversify the economy of the Saudi Kingdom beyond the energy sector.
Key to this plan is transforming PIF into one of the largest sovereign wealth funds in the world. The vision statement for the document Public Investment Fund Program 2018-2020, which supports Vision 2030, states PIF is to be a “global investment powerhouse and the world’s most impactful investor, enabling the creation of new sectors and opportunities that will shape the future global economy, while driving the economic transformation of Saudi Arabia. So the question is what new sectors of investment will they open and what type of impact do they seek? The Saudi government has retained numerous lobbying firms in the United States to advance their global investment goals for PIF, though the situation with Khashoggi’s murder led many to cancel their agreements in recent weeks.
The full conference program for FII is available online and describes plenaries on business and governments developing a “collective vision,” the ethical implications of a digital economy, and anticipated exponential growth of the fin-tech sector. Also on tap are discussions of the evolution of global capital markets including challenges for sovereign wealth and pension funds, mega investments in “frontier technologies” like SoftBank’s Vision Fund, and “which economic model for privatization will prevail?” Privatization is, evidently, presumed inevitable in such circles.
Screenshots of select sessions below:
I created a relationship map of advisors for FII 2018. Taken together it shows the degree to which ubiquitous computing, digital payment systems, Blockchain, Big Data, real estate development, hedge fund management, and public private partnerships may shape our lives in the decades to come if we don’t organize to counteract prevailing trends. Access an interactive version of the map here.
Advisors: Future Investment Initiative 2018
Mohamed Alabbar, Emaar Properties: Luxury real estate development and management including cutting edge technology implementation (smart cities).
Ajay Banga, Mastercard: Mastercard has patented Blockchain identity verification, is now offering payment services on Philadelphia regional transit cards, and has explored using loyalty rewards payments to nudge people into medical protocol compliance (digital economy, Blockchain).
Victor Chu, First Eastern Investment Group: Venture capital fund focused on Asia and heavily invested in digital payment systems Alipay and WeChat pay (digital economy).
Joe Kaeser, Siemens: German company developing smart city technologies and data analytics tools for managing urban environments (smart cities).
Lubna Olayan, Olayan Group: investment capital, Cornell trustee, WEF and Council on Foreign Relations connected (fin-tech).
Masayoshi Son, SoftBank: launch of the Vision Fund with forty-five billion dollars through PIF investing in emerging technologies. Many Silicon Valley start-ups have obtained significant capital from SoftBank.
Tidjane Thiam, Credit Suisse: investment capital, ties to NYC and Chicago strategic public-private partnerships, innovator in Blockchain securities transfers (digital economy, Blockchain, public-private partnerships).
Peter Thiel, Paypal and Palantir: big data analytics, ties to US state security infrastructure, involved in Pay for Success deal evaluation via their “Philanthropy Engineering” initiative delivering pro bono services (impact investing, Big Data, surveillance).
Withdrew Partnership Status After Khashoggi’s Death
Stephen Schwarzman, Blackstone Group: investment capital, distressed real estate, donations to AI and STEM education, promoting private investment in public education, donor to NYC library, economic advisor to Trump (fin-tech, AI, education reform).
Mellody Hobson, Ariel Investments: investment capital based in Chicago, wife of George Lucas, ties to education reform via After School Matters and the Chicago Public Education Fund, recently added to board of the Rockefeller Foundation (impact investing, education reform).
Arianna Huffington, Thrive Global: founder of Huffington Post, now promoter of well-being enterprise linked to better uses of technology (impact journalism, tech).
Jamal Khashoggi’s death punctuates a legacy of devastation wrought by the powerful Saudi royal family over many years. While US-manufactured bombs slaughter Yemeni civilians with limited media outcry, the death of a journalist who once occupied the inner circles of power has now drawn serious attention to Mohammed bin Salman and the transitions underway in Saudi Arabia. The kingdom’s planned move away from an energy-based economy means considerable capital must find its way into new global markets, including the finance and tech sectors.
The west has created new vehicles to manage such capital flows, namely Pay for Success social impact investment markets. There have been proofs of concept but thus far the machine has not achieved full functionality. To operate as intended will require: 1) the wholesale privatization of public services through public-private partnerships; 2) non-profits be scaled up significantly to accept massive infusions of capital and manage vast quantities of data for deal evaluation; 3) technologies capable of digitizing and platforming the delivery of social services, including education, to prove the “impacts” that will permit those at the top of the pyramid to take their profit from the essence of our lives.
While Crown Prince Mohammed bin Salman may sell FII attendees on cutting-edge giga-projects like Neom, the reality of urban living in the coming century will be far grimmer unless the masses can organize to resist the impact agenda and chart a different course.
Purpose-built “smart” environments, designed for “impact,” will be set up to contain economically precarious workers compelled to navigate increasingly automated labor markets. In a future where concentrated wealth of the type embodied by Saudi assets, reigns supreme, poverty will evolve to be managed for profit through predatory public-private partnerships operating at the behest of social impact investors. Such a blueprint will, through new digital economic structures, allow concentrated global capital to flow unimpeded, thereby continuing to enrich those at the top of the economic pyramid. By deploying innovative tools like self-sovereign identity systems and Blockchain public benefit payments, impact poverty management will allow the oppressive biocapitalist agenda to flourish even as the purchasing power of the masses becomes almost negligible.
The murder of Jamal Khashoggi is our wake up call. US consultants will sit at Mohammed bin Salman’s table this week describing the impact-investing machine they have built, a machine designed to funnel capital through a wasteland of intentional poverty. Can we take this opportunity to put sugar in the gas tank? Khashoggi has given us the gift of time. How will we use it?