Saudis pump $200bn into rust belt

[DonViejo]

Source: The Times of London



Trump arrives in Riyadh at start of first major foreign trip

Richard Spencer, Riyadh
May 20 2017, 12:00pm,
The Times

Saudi Arabia is offering President Trump investment in America’s decaying infrastructure and industry worth tens of billions of dollars as a sweetener for arms deals and better relations between the two countries.

Mohammed bin Salman, the deputy crown prince and in effect the prime minister, made the offer during a visit to Washington this year, sources said. Mr Trump is hoping that the money will be invested in the “rust belt” states whose support helped to propel him to the White House.

Estimates of the sums involved range from $40 billion to $200 billion — in addition to current and future arms deals valued at $300 billion, which will be announced during Mr Trump’s visit to Saudi Arabia, which began today.

The president touched down in Riyadh this morning, exiting Air Force One onto the red carpet with his wife Melania to be met by King Salman.

Read more: https://www.thetimes.co.uk/edition/world/saudis-pump-200bn-into-rust-belt-in-new-american-alliance-ms2zjltbl

[bucolic_frolic]

1. Privatization scheme? $400 Billion in exchange for what?

We are being financially enslaved by this Airhead

[sandensea]

37. It sounds more like a headline created by the Saudis to make King Con look good

And yes: whatever investment does come out of this (if any) is likely to be of the predatory type you described above, and come with yooge strings attached.

[theaocp]

2. Fuck this.

Get the fucking tax money from our own 1%. What absolute horseshit.

[Hortensis]

44. Generally speaking, yes. International investment is

common, but I'm wondering how right wing media would spin this? Bury? They could hardly brag about this "great victory" to a xenophobic base, after all. But Rump might well.

[BeyondGeography]

3. The Saudi Arabia Rust Belt Investment Fund

Has a ring to it.

[jmowreader]

34. SARBIF!

[beachbum bob]

4. so what is trump going to sell to the arabs?

saudis just don't give their billions away...

[DonViejo]

7. In the first paragraph of the article...

Saudi Arabia is offering President Trump investment in America’s decaying infrastructure and industry worth tens of billions of dollars as a sweetener for arms deals and better relations between the two countries.

[beachbum bob]

11. arabs don't give away their money....

[Hassin Bin Sober]

31. "Investment" in "infrastructure" doesn't sound promising.

I'm in Chicago. We deal with the Abu Dubai Sovereign Wealth Fund (and other hedge funds) investment in our infrastructure every day.

[Hortensis]

45. And? I found profits flowing to it from Chicago parking meters,

which doesn't sound good. Infrastructure investment has a good sound, though...? Has there been benefit accruing to Chicago, or just exploitation with money flowing out?

[BumRushDaShow]

13. Ha! Check this out

(article from a little over a year ago)

<...>

“IPOing Aramco and transferring its shares to PIF (the Public Investment Fund) will technically make investments the source of Saudi government revenue, not oil,” the prince said in a five-hour interview this week at the royal compound in Riyadh. “What is left now is to diversify investments. So within 20 years, we will be an economy or state that doesn’t depend mainly on oil.”

Largest U.S. refinery now belongs to Saudi Arabia

In addition to being the kingdom's Defense Minister and second in line to the throne, the prince oversees the Council for Economic and Development Affairs, which controls the Public Investment Fund. The fund currently hold stakes in Saudi Basic Industries Corp., the world’s second-biggest chemicals manufacturer, and National Commercial Bank, the kingdom’s largest lender.The fund is expected to grow to more than $2 trillion and will increase its foreign investments from about 5% now to 50% by 2020.

Back in July, the kingdom's fund spent $10 billion to invest in the Russian Direct Investment Fund and $1.1 billion to acquire a 38% stake in South Korea’s Posco Engineering & Construction Co.

This move and a planned “National Transformation Plan” aimed at increasing non-oil revenue to be announced within a month, come amid a global rash in oil prices. “We are working on increasing the efficiency of spending,” Prince Mohammed said. “So I don’t believe that we have a real problem when it comes to low oil prices.”


http://www.freep.com/story/money/2016/04/01/report-saudi-arabia-plans-aramco-ipo/82508522/

Some recent info here: http://www.clickondetroit.com/money/dealmaker-trump-will-be-busy-in-saudi-arabia

Edit to note - If Saudi follows through with getting out of the oil business (which is what is suggested here), then Russia and the U.S. can step in to fill that gap --Because.China.

[logosoco]

5. I guess this is going to be spun to the Trumpsters

as a great "win". I wonder when they will figure out this most likely means toll roads and the money won't be going to the state DOT.

[thesquanderer]

6. I hate to say it but...

...if the Saudis are willing to pay higher prices for American arms, there is something to be said for that extra money going to the U.S. public good, rather than into the pockets of the likes of Lockheed's executives and their shareholders.

[yardwork]

8. And this will happen how? I don't believe a word of it.

What is the mechanism for "investing in the rust belt?"

Let's see if that happens.

[Marcuse]

25. The Saudi investment will be administered by the Trump Foundation - of course.

[riversedge]

27. so, trumpy will then write a check to himself. dah.

[beachbum bob]

12. I suspect we will see a surge in oil prices as a part of all this as it benefits both

the Saudis and the Russians....a win-win for Putin for sure

[TexasBushwhacker]

33. Of course

Good luck to the Republicans trying to spin that as a positive while we have to pay more at the pump and the grocery store.

[JHB]

26. I suspect there will be very little of it for "the U.S. public good"...

...and see privatization schemes like the Chicago parking meter fiasco as much more likely.

Chicago’s ill-fated 75-year lease of the city’s 36,000 parking meters for $1 billion to a Morgan Stanley-led private consortium is Exhibit A for bad public contracting. After the ink was dry, the city’s inspector general concluded that the city sold the meters $1 billion dollars under their value. Parking rates skyrocketed, and the terms of the lease protecting Morgan Stanley’s investment created new annual costs for the city.

***

So that private investors can protect their money, P3 contracts typically specify “compensation events” or financial penalties that the city must pay the private investor if certain events occur that may adversely threaten profits. In the case of Chicago’s parking meters, the most significant compensation event occurs when the city has to remove a parking meter from the system for such things like road construction, street festivals or implementing new street level transit modes. The city lost a lawsuit filed by Morgan Stanley for $61 million in compensation penalties for street closures.

***

The Chicago deal isn’t the only contract that has clauses working against sustainability goals. A P3 that created HOV lanes on the Washington Beltway in Northern Virginia forces taxpayers to reimburse the investment consortium (comprised of Australia-based Transurban and Texas’ Fluor Corporation) when “too many” commuters carpool.

https://nextcity.org/daily/entry/infrastructure-projects-p3-contracts-chicago-parking

[Hassin Bin Sober]

32. Yep. We were just handed the gift of "surge pricing" in my Chicago neighborhood.

The doubling of the already 500% increase in parking rates goes to, you guessed it, the hedge fund parking meter company to help pay back the charge backs the city owes for meter closures.

It's like we were turned over to the juice loan collectors in a mob bust out.

Water main break? Fuck you, pay me.

Natural disaster? Fuck you, pay me.

Street fair? Fuck you, pay me.

Btw, Mayor Daley landed him on of those no show consulting gigs with the law firm that handled the deal.

[madinmaryland]

29. Uhh. It will be the corporations and their CEO 's

That will reap the benefits. They'll just outsource the work to third world countries.

[haele]

39. They're buying the rights to build Lockheed products in Saudi.

Word in the DoD contractor community is already that all manufacturing for the Saudi purchase will be overseas. We knew that a few years ago when Pres. Obama's administration nixed the deal on humanitarian reasons.

I'll be surprised if 5% of that money will end up taxable revenue in the U.S. Most of whatever might touch U.S. soil will be in the form of some administrative costs and executive pay.

Haele

[Achilleaze]

9. Hell, the Saudis, Inc. already own a huge chunk of Fox "news"

republicans willing to do anything to make moneybucks.

[WellDarn]

10. A public service/campaign ad

Just popped into my head

"The Twin Towers burning . . . people jumping . . . video of Trump shaking hand with the Saudi rulers . . . fade to black . . . All caps 'BLOOD MONEY'" in white . . . end.

[Bernardo de La Paz]

14. US is now a third world country in some ways; at least some parts. . . . nt

[Adrahil]

15. Selling off bit of America to the Saudis?

Well, I guess they know oil will no longer be a weapon soon enough, they need to find something else.

[Phoenix61]

16. Investors always want a return on their money.

Not to dredge up ancient history but 15 of the 9/11 pilots were from Saudi Arabia. Is arming them to the teeth really the best plan?

[EX500rider]

21. "Is arming them to the teeth really the best plan?"

Not really up to us, they can buy weapons from Russia, China, France, Germany...etc....

[madinmaryland]

30. Good point. Have the Saudis ever apologized for their

Country playing a pivotal role in the 9/11 attack.

Crickets.

[packman]

17. Wonder how this will sit with the Rust belt folk?

Taking a job from an Ahrab? I can see a lot of conflicted folk twisting themselves into knots about this.

[Bradical79]

41. I'm not sure they'll even get jobs out of this. -nt

[DK504]

18. Wonder how the Rubes will like all those Moos-lambs will feel

about a takeover of their states. I'm sure they will think they are going to blow up all the houses.

Lookie, we're showing the world we refuse to take care of our own problems, despite the fact we could rebuild the world if we just taxed corporations and the 1%.

Wonder how much we could rebuild if it weren't for "The Wall."

[vkkv]

19. Disgusting -as usual.

[jpak]

20. Just say NO to foreign royalty

Spirit of '76

etc.

[Egnever]

22. Now that would be some crazy

if all the Muslim haters got bailed out by the Muslims.

[harun]

23. Isn't that the truth, "Deplorable's get bail out from 1%'r Muslims".

[elleng]

24. 'Mr Trump is hoping that the money will be invested in the rust belt states

whose support helped to propel him to the White House.'


I 'hope' too.

'As President Trump begins his first presidential trip abroad in Saudi Arabia, an investment company run by one of his top supporters, the billionaire Stephen A. Schwarzman, has secured an enormous investment from the Middle Eastern kingdom.

The company, Blackstone, which Mr. Schwarzman helped found, said on Saturday that Saudi Arabia’s sovereign wealth fund had committed $20 billion to a new investment fund aimed at infrastructure projects, primarily in the United States.

The commitment is about half of the capital Blackstone plans to raise for the fund. All told, including potential borrowed money, the new fund could invest more than $100 billion in infrastructure projects, the company said in its statement.

The fund was one of several business deals between an American company and Saudi Arabia announced after Mr. Trump’s arrival. At a ceremony in Riyadh on Saturday, General Electric said it had agreements for $15 billion worth of projects.

And the Trump administration helped line up $110 billion worth of arms deals, negotiations in which senior officials played prominent roles. For instance, Jared Kushner, Mr. Trump’s son-in-law, personally called the chief executive of Lockheed Martin to cut the price of a radar system.'>>>

https://www.nytimes.com/2017/05/20/business/dealbook/saudi-arabia-to-invest-20-billion-in-infrastructure-mostly-in-us.httml?

[no_hypocrisy]

28. The Saudis are buying Kansas?

Or will there be enough money to include Iowa?

[orangecrush]

35. Trump just aold his base

To the Saudi Royalty!!!






And I thought the orange turd had no sense of humor....

[JI7]

36. it's going to go towards right wing talk radio

[qwlauren35]

38. If this is done right...

it could go into roads, bridges, electric utilities. It could go into building public schools, putting up health clinics. There are major possibilities. These are the jobs that Trump promised. And if he delivers, it will be a major coup, because the US government doesn't have to pay for it.

This has the possibility of a win-win-win. A win for Trump in public approval from his base, a win for Saudi Arabia in a massive arms deal, and a win for the American people in the Rust Belt.

I see it happening, I see his base loving him for it, and I see the Democrats losing their ability to win a coup in 2018.

[haele]

42. Foreign investments in U.S. infrastructure has very rarely gone well.

Despite the claims of a high-paying jobs and better communities, after the initial honeymoon period in the push to establish the ownership, most foreign investment ownership results in a majority of unprotected lower wage jobs with few benefits, high use fees, problems with maintaining the infrastructure.
What's especially troubling is that there's very little legal recourse when there's a conflict with local regulations, health, or safety issues are the norm when foreign entities "invest" in local U.S. infrastructure - in fact, in most cases I've read about, it's worse than local privatization.

https://www.thetruckersreport.com/foreign-company-now-owns-six-major-us-tolls-roads/
http://blog.mysanantonio.com/terrihall/2013/10/first-foreign-owned-toll-road-in-texas-downgraded-to-junk-bond-status/
http://usa.streetsblog.org/2014/11/18/the-indiana-toll-road-and-the-dark-side-of-privately-financed-highways/

And this is not just a problem with foreign takeover of public infrastructure. This happens with privatization all the time.
The problem stems from Infrastructure as an "Investment", not Infrastructure as a taxpayer service project. There is no "long term" community pride or reputation here. It's all about the return.
The private investors - both the Saudis and the Global corporations are only putting up the money because they expect they're going to be getting back all that money to "build something" - and significantly more. And it doesn't matter what the locals or U.S. taxpayers actually need. It's not about improving the lives of American citizens.
It's about how much money the investors can make off all these desperate and irrational "heathens" who have no say in the foreign government or corporate organizations by taking their public resources and selling it back to them in a captive market. All the investors have to do is make the state governments happy enough to continue to let them operate with the least amount of regulation and restrictions.

The locals will still have no other option but to use what these privateers offer them, unless they can afford to live off the grid and don't travel by public roads.

https://hbr.org/1995/09/is-foreign-infrastructure-investment-still-risky

But of course, you can't point that out to the shallow get rich quick types and people who will vote against their own best interests because of emails or a provincial GGG mindset who can get distracted by the last shiny to be dangled in front of them.

Haele

[WinkyDink]

47. Once upon a time, my PA Gov. Rendell sought to lease our highways to Spain

for 99 years.

The populace raised its collective voice and made Big Ed fuhgeddaboutit.

[qwlauren35]

48. Thank you for the eye opener.

Silly me, I was thinking that it would be charitable in return for the arms.

I agree - when the purpose of an infrastructure improvement is for profit, the American people lose.

[Demtexan]

40. They bought the rust belt.

Trump sold out voters to them.

I see toll roads for starters.

[Goprox]

43. The headline said they pumped. The body said they offered to pump

It's called linkbait.

[WinkyDink]

46. The term in the article is "Mr. Trump is hoping that......." Selling us to the Saudis. 9/11 what?

Can't wait to drive over Riyadh Toll Bridge in Michigan.