Saudi Arabia threatens retaliation as criticism mounts over treatment of missing journalist

Saudi Arabia yesterday hinted at economic retaliation over mounting international criticism of the disappearance of journalist Jamal Khashoggi as its stock exchange suffered its worst losses in years. 

Shares plunged as much as 7 per cent as US President Donald Trump promised "severe punishment", and the foreign ministers of the UK, France and Germany issued a joint statement calling for a "credible investigation" into Mr Khashoggi’s fate. 

Foreign Secretary Jeremy Hunt and his German and French counterparts said “light must be shed” on Mr Khashoggi’s disappearance, and cautioned that the Saudi government was expected “to provide a complete and detailed response”.

The state-run Saudi Press Agency earlier hit back at the growing chorus of international voices threatening punishment if suspicions that Mr Khashoggi has been murdered are proved true. 

“The Kingdom affirms its total rejection of any threats and attempts to undermine it, whether by threatening to impose economic sanctions, using political pressures, or repeating false accusations,” the statement read. The the oil-rich kingdom added that it "also affirms that if it receives any action, it will respond with greater action, and that the Kingdom’s economy has an influential and vital role in the global economy." 

Sources inside Saudi Arabia said that any punitive measures directed its way would generate larger counter-measures.  

Independent journalist Jamal Khashoggi has not been seen or heard from since he entered the Saudi consulate in Istanbul on 2 October. 

The writer, an advocate for reform and a thorn in the side of the country’s autocratic Crown Prince Mohammad bin Salman, left Saudi Arabia a year ago over fears for his safety.

The consular visit should have been a quick appointment to pick up personal documents, but Turkish security sources allege a murder squad lay in wait, and killed and dismembered Mr Khashoggi before flying back to Riyadh.

Saudi Arabia insists Mr Khashoggi left the consulate, but has failed to provide security camera footage to back up its claims.

Saudi authorities have agreed to a joint investigation with Turkey, but there is little expectation that they will be forthcoming.

Turkey claims to hold evidence that Mr Khashoggi was killed and multiple reports suggest the government has audio of the killing, possibly recorded on Mr Khashoggi’s Apple Watch. 

After more than a week of growing concern over Mr Khashoggi, the public tone shifted late last week, with high-profile investors pulling out of Prince Mohammad’s upcoming big-ticket investment conference, nicknamed ‘Davos in the Desert’.

The heads of the World Bank and Uber are among a growing group of major figures in international finance who will boycott the event.

Sir Richard Branson, the head of Virgin, shut down talks with the Saudi sovereign wealth fund. On Saturday, Mr Trump, who had previously taken a more neutral line on the matter, used a television interview to say his administration “would be very upset and angry” if it emerged that the Saudi government had ordered Mr Khashoggi’s murder.

"As of this moment, they deny it, and they deny it vehemently. Could it be them? Yes," he said.

On Sunday, the first day of the working week in Saudi Arabia, the storm of controversy began to break when the Tadawul stock exchange in Riyadh dropped by 7 per cent. By day’s end, it was down 3.5 percent.

While Britain and the US are reportedly considering joining the boycott on the conference, the real ties that bind so many Western nations to Saudi Arabia are economic and military.

Saudi Arabia is the world’s number-one buyer of American weapons and the recipient of hundreds of millions of pounds worth of British arms, most of which are understood to be used in the war in Yemen. France and Germany also sell arms to Riyadh.