‘The Death of One Man is a Tragedy, the Death of Millions is a Statistic’ – Joseph Stalin

Jamal Khashoggi’s murder in the Kingdom of Saudi Arabia’s consulate in Istanbul, Turkey this past October has caused a zealous chorus of international outrage amongst governments, businesses and concerned world citizens, alike. Yet more than a month on from his ‘disappearance’ one must wonder why everyone has been so upset, as Saudi Arabia’s brutal and medieval view on human rights generally elicits not so much as a peep from anybody aside from Amnesty International and other human rights groups. Indeed, one might even question the authenticity of the collective scorn, as it has not really amounted to any tangible punishment for the Kingdom. Saudi Arabia’s track record of bloody oppression and its endorsement of a form of Islam that many religious Muslims would define as ‘extreme’ is well documented. Despite this, the death of one journalist – who was one of Saudi Crown Prince Mohammad bin Salman’s (MbS) most fierce critics – has been the proverbial straw that has broken the camel’s back and has allowed the world to see this country for what it is: a brutal and bloody autocracy. As a result some of Saudi Arabia’s closest allies like the United States of America – have expressed the gravest concerns and have threatened economic sanctions. Wall Street, leading banks and major corporations –have echoed these sentiments. Others have gone a step farther and snubbed the previously considered ‘un-missable’ investment conference the Future Investment Initiative that took place in Riyadh at the end of October 2018.

When Khashoggi was first suspected of having been murdered (allegedly ordered by MbS) President Donald Trump said that if the Saudi authorities were found responsible, America’s response would be ‘severe’.  He suggested he might impose economic sanctions, but he did not go as far to say he would halt arms sales. Yet, despite his critics saying that this did not go far enough – not to mention Trump’s interim silence on the issue – it was clearly a change from the jovial and fraternizing figure he cut in Saudi Arabia during the first official state visit to any foreign country in his presidency. Furthermore, mere talk of putting sanctions on Saudi Arabia – however abstract and unlikely – represented crossing a line that few in previous administrations would have ever considered. British Prime Minister Theresa May also took the unusual step to condemn the Kingdom over Khashoggi’s murder and added that the Saudi account that rogue operatives killed him was not credible. As a result, the United Kingdom’s government ordered that any British visas belonging to the murder suspects be immediately revoked. France, Germany and the Netherlands have also joined in by suspending political visits to Saudi Arabia until there are ‘clarifications’. Yet, like Trump, no one has seriously considered ceasing or suspending arms sales to the Kingdom.

Wall Street and the international business community were served an opportunity to express their disapproval on a silver plate, as Khashoggi’s murder happened just before the much anticipated Future Investment Initiative, or ‘Davos in the Desert’. As a result, a number of business and banking A-listers who were scheduled to attend MbS’s signature investment conference pulled out at the last moment. Among those who did not attend were Jamie Dimon, Chief Executive of JPMorgan Chase, Stephen Schwarzman, Chief Executive of Blackstone, Larry Fink, Chairman and Chief Executive of BlackRock, Dara Khosrowshahi, Chief Executive of Uber, Lynn Forester de Rothschild, Chief Executive of EL Rothschild and Bill Ford, Chairman at Ford, amongst others. United States Treasury Secretary Steven Mnuchin and International Monetary Fund Managing Director and Chairwoman Christine la Garde were also among the notable absentees, along with expected media partners the Financial Times, Bloomberg and The New York Times. Despite the Future Investment Initiative having been declared a success, the combination of such heavyweights pulling out of the event and the wide-ranging negative publicity about Saudi Arabia during the conference combined to strip off some of its gloss.

Riyadh, Saudi Arabia
Wall Street and the international business community were served an opportunity to express their disapproval to Saudi Arabia on a silver plate, as Khashoggi’s murder happened just before the much anticipated ‘‘Davos in the Desert’.

It is absolutely clear that the initial response by governments and businesses rattled Saudi Arabia. It widely believed that MbS’s reputation took a major hit, which could even deteriorate further if any evidence points to him ordering Khashoggi’s murder. Moreover, it is reported that there have been murmurs both inside and outside the Kingdom that have questioned MbS’s suitability to take over the crown from his father, King Salman. But perhaps the item that showed Saudi Arabia’s vulnerability most acutely is that King Salman re-emerged from the comfort of his retirement to help his favourite son manage Saudi Arabia out of this crisis. Yet, despite the real and palpable way in which this has affected and even damaged the Kingdom, beyond the initial outcry, governments and businesses have failed to follow up with anything meaningful or impactful.

One wonders about the incongruity of it all. The world was compelled to respond harshly to Saudi Arabia following to Khashoggi’s murder; but despite the collective condemnation it is unlikely that it will lead to any lasting deceleration of diplomatic or business relations with the Kingdom. And yet, if the final outcome was always going to be maintaining the status quo, albeit after a firm smack on Saudi Arabia’s wrist, why did the world choose to be stirred into action after the death of one journalist as opposed to resorting to it its typical inactivity and ‘looking the other way’? Indeed, Khashoggi’s murder managed to make an impact that Saudi Arabia’s history of bloody oppression, totalitarian rule and extremist Islam simply could not. Lest one forgets, Saudi Arabia frequently treats its citizens brutally and horrifically: due process and women’s rights are all but absent, the state endorses public beheadings, flogging and cross-amputation and political dissidents are imprisoned and often tortured. Moreover the Kingdom’s state-enforced denomination of Islam called Wahhabism, which many committed Muslims see as vile, is generally believed to have inspired Islamic terrorism and to have nurtured Al-Qaeda and the Islamic State into the malevolent organizations they are. Beyond overlooking these toxic attributes, the devastation caused by the Saudi-led coalition’s bombing of Yemen in the Yemeni Civil War has killed thousands of innocent civilians and millions are at risk of starving in what might become the worst famine the world has seen in a century. One hastens to add that this has been achieved through weapons purchased from the United States, Britain and other Western countries.

Desert, Saudi Arabia
The world was compelled to respond harshly to Saudi Arabia following to Khashoggi’s murder; but despite the collective condemnation it is unlikely that it will lead to any lasting deceleration of diplomatic or business relations with the Kingdom.

Has Khashoggi’s murder spurred the world to outrage because it rubs us in a different or worse way than normal bloodshed and oppression? Is it, perhaps, the case that he was ‘silenced’ on the basis that he was a journalist that had the audacity to criticize the ruling elite? Possibly, but it would seem that collectively our love of the freedom of the press is somewhat less ardent than what our superficial genuflections towards it might otherwise suggest. Are we compelled to turn a blind eye to what happens within Saudi Arabia but moved to react if and when it murders on another country’s soil? Quite possibly, as the world came to Britain’s side when Russia allegedly instigated the Novichok poisoning of the Skripal family in Salisbury, England. But perhaps the greatest clarity might be offered through the words of one of the world’s most significant standard-bearers of state-managed mass murder, Joseph Stalin: The death of one man is a tragedy, the death of millions is a statistic. Simply put, it is easy to ignore the plight of faceless persons whose tragedy and devastation is only given form through a sterile number, indeed, even if this number pushes into the thousands or, indeed, the millions. But it is nearly impossible for Western countries and its businesses and citizens not to be moved – or at least feel the need to feign having been moved – when a person wearing a kind, smiling face whose only sin is using his pen to stand up to and shed light on injustice is brutally extinguished.

Yet, despite the initial uproar of indignation, even Khashoggi’s murder has failed to move governments and businesses to set Saudi Arabia adrift from the international community. Politics and money have won the day. Aside from Saudi Arabia’s natural resources from which both governments and businesses greatly benefit, the Kingdom presents tremendous potential for new ways to earn billions through new initiatives including the ambitious Vision 2030 that will attempt to modernize Saudi Arabia and open it up to Western tourism. Politically speaking, Saudi Arabia is also the country through which the West is able to maintain its own sphere of influence and counter the perceived threat of Iran and its allies, something that will not be given up easily or capriciously. But, unless one were to argue that the response to Khashoggi’s killing was just for show, one wonders if it was ultimately an unequivocal notice to Saudi Arabia and its de facto King that these kind of headline grabbing shenanigans are simply bad for business and that any more infractions might well result in the West clandestinely locating and installing a new head of state who will work within, and for, the West’s political and business agenda.

Why is Brazil doing so well in the current geopolitical climate?

Since 1980, the Brazilian economy has consistently underperformed compared to other LatAm markets, but the end of July may be showing promise of returning to the glory days. With workers often striking and a questionably inefficient public sector – Brazil often struggles to keep afloat financially. It seems that 2018 has been the year of buoyancy for the brasileros. In the rubble of the current trade conflict – Brazil may re-establish itself as the captain of Latin American markets.

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Since Trump declared a trade war with China, Brazil has found itself in a strong position. Seeking alternatives, the Chinese have begun trading with Brazil to fill the gap left by sanctioned American supplies, which have been taxed by up to 25%. Should they continue to build this trade relationship, Latin American emerging markets could profit significantly – with Brazil at the spearhead.

Brazilian stocks have been rallying as their domestic political environment improves and they take the mantle as a primary beneficiary for the U.S.A.’s trade war with China. The Bovespa Index has since jumped 12% during the past month while the iShares MSCI Brazil Index ETF has also risen by 12%.

As exportation makes up a mere 13% of the Brazilian GDP, they are relatively unaffected by external events. However, they still remain the largest exporter of food, soft commodities, and minerals – coincidentally, the same exports that China previously bought from America. These two aspects should be seen as the reason China would turn to Brazil – a somewhat stoic economy with expertise in exports that the Chinese have been deprived of. Because of this, should the Chinese decide to continue trading with Latin America, the Brazilian GDP will most likely prosper.

Peter Donisanu, an investment strategy analyst at Wells Fargo Institution, has claimed that there is an improvement in risk sentiment across emerging markets and Brazil is piggybacking off of that. He continues arguing that recent easing of trade tensions between the U.S. and some of its key partners has improved sentiments around emerging markets, and consequently, Brazil.

While there has been an improvement in risk sentiment, as Donisanu claims, LatAms sudden boost seems to be directly correlated to recent political events, and it would be a large coincidence to say otherwise. While Brazil most definitely is piggy backing off attitudes towards emerging markets, their disproportionate boom should be attributed to the Chinese interest – not a general interest.