Perception of Saudi involvement in Khashoggi’s disappearance is having consequences, but governments will wait until dust settles

This section is an extract from Le Beck's Weekly Security Brief that provides in-depth insight on more strategic issues affecting the MENA region.

The disappearance of Saudi journalist Jamal Khashoggi will shortly enter its third week (see Oct. 1-7 Weekly Security Brief) and despite speculation and various accusations, what exactly happened remains unclear. At this time, Saudi Arabia maintains its original position that Khashoggi left the consulate, although there has yet to be video evidence showing his exit. Turkish media, for their part, released some CCTV footage, with officials claiming that they have video and audio evidence that indicates Khashoggi was killed, which Riyadh denies. These claims, however, are not without some discrepancies, including the revelation that footage allegedly showing a member of the 15-man Saudi team was taken in 2013 and not on October 2.

Although the circumstances surrounding his disappearance remain unclear, there are already consequences for Saudi Arabia on the political, diplomatic, and even business scene. Saudi equities, for example, took a hit in the aftermath of comments by US President Donald Trump who both indicated that he didn’t want the incident to interfere with Saudi arms purchases while also promising “severe punishment” and/or “very powerful” consequences in the event that Khashoggi was, in fact, killed at the Consulate. In addition, the former US Energy Secretary suspended his position on the board of NEOM, a planned cross-border mega-city; one lobbying firm reportedly cancelled its contract with Riyadh; and multiple participants - both news outlets and companies (including Uber, JP Morgan, and Ford) - pulled out of their participation in an upcoming investor conference in the Saudi capital.

These actions highlight the fact that, regardless of whether or not Saudi Arabia was responsible for the disappearance, there appears to be the perception that it was. Contributing to this are, for example, Turkish statements that Riyadh is not cooperating with the ongoing investigation and various reports claiming that, prior to his disappearance, Saudi Arabia was attempting without success to convince Khashoggi to return.

Assumption of Saudi involvement can also contribute to concerns regarding both the rule of law and perceived irrational decision-making, both of which have already come under scrutiny in recent years: the former during the 2017 corruption arrests (there were and still are allegations that this was as much a power play as it was a fight against corruption) and the latter during incidents like Lebanese PM Saad Hariri’s 2017 announced resignation from the Saudi capital (Riyadh is persistently accused of detaining him in an effort to increase pressure on Hezbollah). Such concerns, whether justified or not, can impact the willingness and interest of companies and investors in doing business with and in the country, damaging ongoing efforts by authorities to send the opposite message, including through social reform like permitting women to drive and developing the entertainment sector.

Perception of Saudi involvement in Khashoggi’s disappearance is having consequences, but governments will wait until dust settles. The fact is that if Khashoggi was killed and if this was ordered by the Saudi government, it would represent a highly irrational move: targeting a prominent journalist living in the US and doing so on foreign soil is highly risky under any circumstances. In other words, the potential benefits of silencing a sometimes critic (Khashoggi had, for instance, also praised certain reform efforts) does not appear to be worth the consequences discussed above.

Saudi leadership is also pushing back against these allegations and the seemingly accompanying assumption of its involvement). Along with denials and efforts to emphasise that there is, in fact, a Saudi team in Turkey assisting with the investigation, some local media outlets are alleging that this crisis was manufactured by Turkey, Iran, and Qatar in order to damage the country’s reputation. Such accusations indicate that the current rift with Qatar is liable to only be cemented further by this situation. Moreover, and more importantly, they have threatened to retaliate in kind to any sanctionsthat may be levied.

At this time, and while this threat and Trump’s comments certainly hold the potential for relations to be strained between the two allies (and with other countries calling for a probe), it is unlikely that governments will make a concrete move until more is known about Khashoggi’s whereabouts. In this context, absent concrete evidence of Saudi involvement, Le Beck assesses that retaliatory measures will be limited if they are implemented at all.