Transcriber: nvidia/parakeet-tdt-0.6b-v2, sat-12l-sm, and large-v3-turbo
Source
Participants
Main
david rubenstein
08:45
y
yasir al-rumayyan
saudi_aramco39:04
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Speaker
Time
Text
Saudi Arabia's Public Investment Fund00:15:26
unidentified
for democracy and for freedom.
Next, a discussion with the governor of Saudi Arabia's Public Investment Fund.
He talks about the country's global investment and outlook at the Economic Club of Washington, D.C., joined by Carlisle Group founder David Rubenstein.
And it did so many great developmental projects in the Kingdom of Saudi Arabia.
When the Crown Prince became the chairman of the board of PIF back in 2015, and there was a good reason for him to say, I want to be the chairman because he saw the potential and he saw what a sovereign wealth fund like PIF can do to the economy of the Kingdom of Saudi Arabia.
What PIF have accomplished up to 2015 was good, it wasn't great.
The strategy that we discussed at the board level for about six months or so was so ambitious and wanted to put PIF and the Kingdom of Saudi Arabia on the map of the world when it comes to economic development and investments.
So I'll just give an example.
Up to 2015, from 1971, our average IRR was less than 2%.
Once we started with the new strategy, and up to date, on average, we're making about 7.2%.
Now, in the coming two months or so, we will set the new strategy for PIF, which is a continuation from the original one, until 2030 and from 2030 all the way to 2040 and beyond.
I mean, we have some of our subsidiaries, like Sanabil, they have an office in San Francisco, so they're closer to the VC and technology kind of investments.
So when you are running a fund with $945 billion, you must be very popular, right?
I mean, people, you must, can you ever go to a restaurant or a dinner or any place and people don't say, I've got the greatest investment idea of all time?
I mean, we have a really good filteration process.
We have a lot of teams that work in different things.
And we're more proactive rather than reactive.
So in our five-year strategy, usually we put, and by the way, we left a card for our current strategy, which started from January 2021, and it should take us to the end of 2025.
We put there 13 different sectors that we're interested in, both domestically and internationally.
So that's the first filteration.
Then we go to the idea itself.
Does it make sense to us?
Is it a brownfield, greenfield?
Is it a financial asset?
Because remember, we do too many things and we don't look into only one kind of asset.
No, it was the first time I met him when I got the call and say, okay, I'll go there.
And I remember, like, you know, he said, when and it wasn't an interview, actually.
He was like, I want to do this, one, two, three.
And it wasn't for the Sovereign World Fund, it wasn't for BIF.
Actually, it was for the so-called decision support center at the Royal Court.
And the idea that he had, he's a great visionary.
And none of the things that we're seeing right now in Saudi would have happened without a visionary and a leader like the Crown Prince.
The way he's looking at things, it's not based only on opinion.
He said most of the governments, especially the Saudi government back then, used to make their decisions based on different advisors and based on opinions.
What he wanted to add on top of that is the evidence-based kind of decision-making process.
So my first task was to build the center.
The center now has about 350 professionals in social security, politics, and economy.
And it's an integral part of the decision-making process within the center of government in Saudi Arabia.
Okay, so when you're looking at investment, the PIF is looking at investment, is the rate of return the most important thing, or is it whether it will help the kingdom in some other way, or is it just diversified out of the oil area?
What are you most focused on in terms of looking at a good investment?
If you remember, like if you look into history, Portugal was at some stage one of the richest countries in the world with all the gold that they have from everywhere in the world.
And that's like a disease.
And that's what the Crown Brains always talk about.
We have the oil disease.
We cannot live only on oil.
Because this will make you more dormant, less active, because you know that there is always oil coming out of the ground and you will sell it.
That's one.
Two, we have growth in population.
So no matter how big is your oil, you need to find new jobs for new people coming in.
Today, 75% of Saudis are under the age of 35.
You need to educate them, you need to give them the quality of life that they deserve, and you need to find them jobs.
So you cannot do this only with one source of income, which is oil.
And now, of course, the gas is becoming a big thing for us in Aramco, but still not enough.
We need to diversify our economy.
We cannot just rely on one commodity and say this is enough for us.
History repeats itself.
We don't want to do the same mistakes that great nations have made.
But as a chairman of Aramco, it's one of delights for me because it's a great company.
People, when they see Aramco, they see only oil and maybe gas, but it's more than oil and gas company.
Aramco is one of the largest investors in technologies.
And that's part of the reason why Aramco has the lowest lifting cost in the world.
And it's not because of the demography only, but it's because of the technology that we have.
It's about 90 years old.
It was a combination of knowledge from the US and Saudi.
We have one of the largest numbers of PhDs and CFAs working in Aramco.
So it's very well organized.
My role as a chairman is to do the following.
One is the strategy.
Two is the monitoring of the implementation of the strategy.
And three, to manage the board, to make sure that all board members have the opportunity to voice their views.
And at the same time, to make sure that the executive management have all the time to explain why they're doing the things that they're doing or proposing.
Yeah, and if we increase our production, because Aramco today, only from oil, we have $12 million barrels as the maximum sustainable capacity for our oil.
We're producing below $10 million.
So we can increase it by additional 20% within days.
And in order for us to do so, we have to continuously do further exploration.
So why our lifting costs is lower than the others?
Because of the use of technology, especially AI.
At some stage, Aramco had the fourth most powerful supercomputer in the world.
Just to put things in perspective, it was more powerful than NASA and supercomputer.
So there is a good reason for us to invest and deploy more money and investments in technology.
And now AI, we are one of the most influential adapters to AI and to improve the precision of trailing, getting the oil without disrupting the environment, and at the same time lowering our cost.
So if your lifting cost is $3.5 a barrel, in the United States, to get oil out of the ground probably is three or four times as high, so that's one of the advantages you have.
But you are not even looking for more oil now, I guess, because you already have 250 billion barrels of proven reserves, or you're not exploring for more oil now because you don't need to.
So Today, although I said our maximum spare capacity is about 12 million, but if you add on top of it the gas, this will give us about 16 million barrel of equivalent oil with both the gas and oil.
I hope, you know, it's going to be one of my happiest days if we achieve that, because I will go back to my insurance company and ask them to pay for it.
So now there's been discussion for a while about LIV merging with PGA, and you're one of the linchpins of figuring out, is that going to, you're going to announce today what's going to happen?
Golf, if you think about it, we have about 110 million golfers around the world.
The fan base of the sport of golf is mainly golfers.
We have like zero spectators or coming into events or watching a broadcast for golf.
And that's one of the very few sports in the world that has this kind of status.
What I want is to bring golf to the non-golfers, just like football, just like tennis, I mean, or Formula One.
How many people do you know that have driven a Formula One cart?
But at the same time, you have millions of people who are watching Formula One.
I want to have the same thing for golf.
So I'm looking forward for the day to work with the PGA Tour, the DB Work Tour.
We reached out to them from day one and fortunately things didn't go very well.
But I think hopefully in the future we will be able to bring the game of golf together and this will I mean what I'm trying to do is not to claw back from the BJA or the DB World Tour.
What I'm trying to do is to increase the size of the part.
It's the World Cup, and it's the most prestigious football event in the world.
And there are billions of people who are watching the, not millions, billions of people who are watching the World Cup.
It's very important to us in Saudi because it complements the strategy that we have when it comes to increase the number of tourists, visitors, and also to improve the quality of life for Saudis.
So we started with Newcastle, the United Football Club.
It made perfect sense to us.
The price was below the other EPL teams, the English Premier League teams.
And at the same time, the potential was so high.
So we put about £350 million and we improved everything.
The performance, when we took it, they were at the relegation box.
And for those of you who don't understand what's relegation box, it's to be relegated to the lower league.
There were 19 out of 20.
And on that first season, we went all the way up to the seventh position, and we ended up with the season at the 11th.
The next three seasons, we got the first cup in seven years for the club.
That was last year.
We finished in the top five and top four for the last two years.
We played the Champions League, which is another great event.
And how did we do it?
We just brought in our framework and our system to the decision-making process.
And we took this experience, brought it back to Saudi.
So we started the Saudi Professional Football League.
And with that, as most of us know, Cristiano Ronaldo playing there, Neymar used to play there, Karim Benzema, which is like the superstars of the world of football.
And we said, okay, now we have great players, how can we make the clubs great clubs?
So we're bringing in the same experience that we have had in Newcastle United Football Club, to Saudi, to Al-Hilal, to Al-Nassr, to the Tihad and Al-Ahli, and the other clubs that we own indirectly through Aramco, through NEOM, through Ghidir.
So now the Saudi Football League is ranked like on the top four leagues in the world.
And Saudi Arabia, as you know, is a big country, different climate, different demographies, different offerings that are coming from the history that we have, like Alola, I'll give an example, is 5,000-year civilization.
Antab, we went there, but the infrastructure, but some hotels, airport, connecting the world to Alola, it's one of the best sites to visit.
You have Dariya, which is the historical birthplace of the kingdom of Saudi Arabia.
We have great developments over there.
And of course, you have the Red Sea has one of the best offerings over there.
It's like nothing that you have seen in your lifetime.
The same thing is applicable to the southern part of the country where it's really nice, green, even in summers, like in August, temperatures there between 18 to 25 Celsius, which is something that no one would believe about some kind of offering in Saudi.
The part that's the best known of Vision 2030 in this, let's say, in the United States, is probably the vision of where you're building a modern city with, I guess, no carbon use or very little carbon use, a kind of modern city.
NEOM is a lot of people think NEOM is only the line, but that's one of the projects of NEOM, which is very there's a reason why we call it not even a mega project, we called it a GAGA project.
The infrastructure in there by itself will consume a lot of billions of dollars.
But now I thought that what you're trying to do is not give so much money out to people to invest in the United States as much, but you want to have people invest back in the kingdom.
Yeah, so as I said, historically speaking, PIF used to deploy about 89% or 87%, I'm sorry, 97% of our capital within the kingdom.
Then back in 2015, we set the strategy to diversify the economy.
We said we want to go all the way to 80% internationally and 20% domestically.
But that doesn't mean we are selling some of the assets in Saudi, but all the new deployment should be international.
Then in 2021, we said we want to continue on the building of the economy of Saudi Arabia.
So now we're about 80% domestic and 20% international.
But the percentages could be deceiving because there was an increase in our AUM from 150 to 930, 40 billion.
So as an absolute number, we continue on going international.
Now, the trigger for us to, especially with the asset managers, if we want some of them to or we want to deploy capital with some of them, we would like them to get some of the deployment back to the country.
Because as I said before, we need to increase and grow our local content.
And one of the best ways to do so is to get direct foreign investments to the country.
And especially if it's like co-investments with PIF, that would add more certainty for their future cash flows.
I mean, we mentioned 13 different sectors, and you have it on the cards in front of you.
All the sectors that we have, it could be anywhere from logistics, infrastructure, technology, and in technology you have inference, AI, chips, chip sets, renewable energy, transportation.
We have invested in Lucid, and Lucid now have their own manufacturing facility and plant in Kengardella Economic City, north of Jeddah.
We brought in Pirelli, Hyundai, so many other companies to come and invest in Saudi.
Not only that, we are doing a lot of procurement, like everything, from airplanes, Boeing, Airbus.
And one of the things that we asked them to do for us if we do the procurement is to get some of their manufacturing or MRO centers to the kingdom.
And this way, we're both winning.
They're winning by selling to us their own products and services.
And at the same time, we are winning by creating more GDP contribution and more jobs for Saudis and non-Saudis who are residing.
I mean, if you ask me the same question back in 2015, I say almost everything.
But today it's gradually changing.
And I'm not going to blame some of the Americans for their misperception.
I will blame ourselves.
We didn't give our own narrative.
So we need to be more in here.
And I know Princess Rima and the Foreign Affairs Ministry doing great things, but we can complement it with what the investment community and the economic community and the financial community can do to basically give our own narrative.
I mean, I don't want everyone to only rely on news agencies to know what's in Saudi.
I would like to invite everyone in here who are interested to come and visit Saudi.
And in fact, we can do that in October 27th, our next FII, the Future Investment Initiative.
You've been there.
You've dressed us with your presence so many times.
And the same thing to everyone in here.
Come and see what's going on.
Really, only great things.
I think the transformation that we are witnessing right now in Saudi is second to none.
People think that what China did back in the 80s, 90s, and early 2000s is one of the greatest transformations.
I think Saudi, what we're doing right now, could be greater.
What we're looking for in the United States is everything, right?
I mean, Saudi Arabia and the United States were allies since the 30s, when the first Standard Oil Company came to Saudi, and then with President Roosevelt when he came to the Ritzi and the founding king Abdel Aziz met him.
So we've been working together since the 30s.
And I think our partnership will continue for many, many decades to go.
The 600 billion figure looks like a big figure, but I think it is not because Saudi is a big economy, and the United States of America is the largest, the greatest economy in the face of the earth.
So I think what we can do is just to continue in our partnership.
We're working on the details of the 600 billion within the center of government in Saudi and with the private sector to see how we can achieve it.
Here's a look at some live coverage coming up Tuesday on the C-SPAN networks.
On C-SPAN at 10 a.m. Eastern, the House is back in session.
Members will continue work on the upcoming year's defense programs and policy funding bill and an immigration-related measure.
Over on C-SPAN 2 at 8 a.m., Senator Alyssa Slotkin will be joined by Representatives Michael McCall of Texas and Seth Moulton of Massachusetts for a discussion about space technology and national security, hosted by Axios.
Then at 10 a.m., the Senate's back in session and will work on more of President Trump's executive nominations.
And in the evening, at 9 p.m., the Reagan Foundation Center on Civility and Democracy hosts a conversation with Supreme Court Justice Amy Coney Barrett on her new book, Listening to the Law.
Over on C-SPAN 3 at 10 a.m., a House Agriculture Subcommittee holds a hearing on potential roles for states in providing SNAP benefits.
And at 2, Acting Assistant Secretary for Health, Dr. Dorothy Fink will testify on the health and nutrition of U.S. children.
You can also watch live coverage on the C-SPAN Now app or online at c-span.org.
C-SPAN's Washington Journal, our live forum inviting you to discuss the latest issues in government, politics, and public policy.
From Washington and across the country.
Coming up Tuesday morning, Max Cohen of Punch Bowl News discusses the latest developments as Congress works to avoid a government shutdown and efforts to release additional files related to Jeffrey Epstein.
Then-New Jersey Democratic Representative Frank Pallone talks about Trump administration health care policy, government spending deadlines, and congressional news of the day.
And the Conservative Partnership Institute's Rachel Bovard analyzes the state of the conservative movement in the U.S. and President Trump's second term so far.
C-SPAN's Washington Journal.
Join in the conversation live at 7 Eastern Tuesday morning on C-SPAN.
C-SPAN Now, our free mobile video app, or online at c-SPAN.org.
Wednesday, a look at President Trump's artificial intelligence strategy with the director of the White House Office of Science and Technology Policy.
You can watch this Senate Commerce Subcommittee hearing live starting at 10 a.m. Eastern on C-SPAN 3.
Also, C-SPAN Now, our free mobile app, or online at c-span.org.
This fall, C-SPAN invites you on a powerful journey through the stories that define a nation.
From the halls of our nation's most iconic libraries comes America's Book Club, a bold, original series where ideas, history, and democracy meet.