Saudi Arabia is in a race to build a post-oil future, and its sovereign wealth fund is spreading around the oil-rich kingdom’s largess as never before. The Public Investment Fund, better known as the PIF, has emerged as the main vehicle for the expansive ambitions of Crown Prince Mohammed bin Salman, the de-facto leader, who is reshaping the country with his own brand of state capitalism. The drive includes big bets in global sports including golf and soccer, which fits with a strategy to promote tourism, improve Saudi Arabia’s image abroad and enhance the quality of life for citizens who’ve only recently been freed from some of the country’s most onerous religious restrictions. The size of the fund and the scope of its spending spree – assets are nearly $800 billion – has made the PIF both a force for modernizing Saudi Arabia and a tool for so-called soft power on the global stage.
1. What is the PIF?
Set up in 1971 as oil revenue was pouring in, the PIF provided development loans and held the state’s passive interest in publicly traded companies. Then, in March 2015, the fund was “reborn,” according to its website, and placed under Prince Mohammed, its chairman. Soon after, the prince, who is known as MBS, expanded his authority and embarked on an effort to remake the traditional Muslim country of 36 million people. Saudi watchers say the PIF operates like a family office, enabling MBS to direct the state’s funds more like a venture-capital firm, bypassing a slow-moving bureaucracy.
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