October 12, 2018

Breakingviews: The Importance of Being Ernest

by Breakingviews.

Saudi Arabia’s new advisory council could unravel quicker than Donald Trump’s. The U.S. president’s strategic and manufacturing panels, stocked with chief executives from companies like Blackstone, 3M, General Electric and Merck, lasted six months before being wound up in August 2017. Saudi Crown Prince Mohammed bin Salman’s 18-member group of foreign experts, brought in to advise on new super-city NEOM, may have an even shorter shelf life.Advising presidents and princes – or both in the case of ex-Uber boss Travis Kalanick – has two benefits. It flatters the ego of the bigwig who’s asked by serving as a kind of celebrity endorsement. But it also has a veneer of altruism. Business leaders can argue they are influencing White House policy, or the modernisation and democratisation of Saudi society. If the 26,500 square-km, renewable-energy and tech-tastic NEOM project really happens, it would be a symbol of how far the kingdom has come.One utterance or action, though, can send everything rapidly the other way. In Trump’s case, the turning point was a poor response to racial violence in Charlottesville, Virginia, in which the president suggested both sides were to blame. Merck CEO Kenneth Frazier and Intel boss Brian Krzanich resigned from the manufacturing council, and Trump eventually shuttered it himself.

Saudi is a less clear situation. Riyadh has been asked by U.S. and European governments to investigate the disappearance of journalist Jamal Khashoggi, who Turkey says was killed inside the Saudi consulate in Istanbul. Former U.S. Energy Secretary Ernest Moniz has suspended his role on the advisory panel until more is known about Khashoggi’s fate. Alphabet’s Dan Doctoroff, chief of the tech giant’s urban-planning division, is not a member, the Financial Times reported, despite being named as one by the Saudi government.

That still leaves 16 other luminaries, including Kalanick, architect Norman Foster and Rob Speyer of real-estate group Tishman Speyer. If it looks like their presence won’t have much chance to encourage meaningful change, they stand to accrue little more than reputational risk. Bin Salman’s commitment to transparency was already uncertain, after he detained hundreds of fellow royals and businessmen in the Ritz-Carlton hotel last year. If even patriotism couldn’t keep Trump’s band of CEOs together, a seat at Saudi’s table ought to be even easier to put aside.

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