Saudi Arabia makes a big splash in Spain with the purchase of 9.9% of Telefónica | Economy | EUROtoday

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Saudi Crown Prince Mohamed bin Salman in 2019.BRENDAN SMIALOWSKI (AFP/Getty Images)

The Saudi Telecom Company (generally known as STC Group) guess on Telefónica is only one extra piece of the new puzzle that the petromonarchy is constructing, with Europe, the West and the relaxation of the world between eyebrows. Its goal is none apart from to diversify its financial construction, nonetheless tremendously depending on crude oil. Until now, its presence in Spanish corporations was restricted: the spotlight had been the purchase, in 2007, of a massive plastics manufacturing plant in Cartagena, undertaken by means of the state-owned Sabic. Telefónica is one thing else: one of the largest corporations in the nation, regardless of its low hours on the inventory market in current occasions.

The Saudi authorities —a dictatorship marked by repression and its lack of respect for human rights— seven years in the past launched an bold plan, Vision 2030, which contemplated its touchdown in an countless quantity of areas, not solely enterprise, at all times at the stroke of a checkbook : from soccer – the Spanish Super Cup has been held there since 2020 and several other figures from the Spanish league have packed their luggage for Riyadh in current months – to tradition; from science to leisure The nice sponsor of all these tasks is the crown prince, Mohamed bin Salmán, a thirty-something lover of know-how and decided that his nation —closed, very closed; uneven, very uneven—take a big leap from a global showcase.

With 36 million inhabitants and a billion euros of GDP (a determine much like that of the Netherlands and a third lower than Spain), the Kingdom of the Desert, dominated with an iron hand by the household that provides it its title —the Saud— , is by far the largest economic system in the Gulf. Despite the current drive to diversify, oil is —and can proceed to be for a very long time— its essential supply of revenue: it’s the largest crude oil exporter on the planet. The state oil firm, Aramco – one of the largest corporations on the planet – went public shortly earlier than the pandemic, however greater than 90% of its shares stay in the arms of the State.

“They have been immersed in a process of changing the image that they project to the rest of the world for seven years,” Sanam Vakil, director of the program for the Middle East and North Africa of the assume tank London Chatham House. “Its objective is twofold: to diversify its economy to anticipate a future in which oil will be residual and to achieve an internal change of mentality, with a certain social liberalization and an increase in the participation of women in the labor market”.

The Saudi precedent

The Saudi technique has a precedent, albeit on a a lot smaller scale, in Qatar, which is very depending on oil and gasoline revenues. Qatar’s dedication to massive listed Spanish corporations dates again: its sovereign wealth fund entered the capital of Iberdrola in 2011 and immediately it has a stake of near 9%. Also 19% of Colonial actual property. Its flag provider, Qatar Airways, has simply over 25% of the Spanish-British airline group IAG (to which Iberia and British Airways belong, amongst others). Outside of the Ibex, Sheikh Hamad Bin Jassim Bin Jaber al Thani as soon as had 11% of El Corte Inglés, though now he barely controls 5.5%. Since this Tuesday, Qatar’s dedication to Spain has been joined by its neighbor Saudi Arabia.

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