Jan 212010

Prince Alwaleed bin Talal is chairman of Kingdom Holding Co., a Saudi firm with billions invested around the globe. …

By Charlie Rose

Prince Alwaleed bin Talal is chairman of Kingdom Holding Co., a Saudi firm with billions invested around the globe. He is ranked among the 25 wealthiest people in the world and is the largest single investor in embattled Citigroup (C), which just posted a $7.6 billion net loss for the fourth quarter. It is said that his displeasure with another Prince, Chuck Prince, contributed to the ouster of the Citi CEO in late 2007. The economic crisis has taken a toll on Prince Alwaleed’s holdings, and he recently injected nearly $600 million of his personal wealth into his firm after a year of steep losses. He is a nephew of King Abdullah of Saudi Arabia and one of the most outspoken members of the royal family. I talked with the prince on Jan. 15.

How do you see the global economic recovery?

The decline has stopped. The question now is, will there be an L-shaped or V-shaped recovery? I hope that the L will be at least a U.

You just saw Vikram Pandit and Richard Parsons, and you’re confident that Citigroup is back on the road…to what?
We had a very healthy discussion about the past two years and what Vikram inherited from the previous management. If you follow what he has been doing, he has been extremely meticulous, and he has been delivering on all his promises. But I’m telling him, you have to deliver in 2010.

What’s your reaction to President Obama’s plan to impose a tax on banks?
I’m against that. The banks, with a few exceptions, have gone through major crises. So while these banks are just coming out of the ICU, you bang them with another tax? I believe it’s premature and unwarranted…and more of a vendetta against those banks that are still giving extravagant bonuses to their management.

You’re a huge investor in News Corp. (NWS) Are you confident about its future?
I’m the second-biggest shareholder there. I was with Mr. Murdoch yesterday and have a very close relationship with Mr. James Murdoch. James is now managing Europe and Asia. I would be the first one to nominate him to be the successor of Mr. Rupert Murdoch, God forbid something happens. I have full trust in him. He is really a Rupert Murdoch in the making, and he’s almost there. And I told that to Mr. Murdoch.

Have you seen the Fox movie Avatar?
I had to see it before I met Mr. Murdoch. If I didn’t, he would be upset.

Did you like it?
Well, it was the first time I’ve seen a science fiction movie. What I like is the fact that people like it and it will gross more than $2 billion and could possibly add $400 million to the bottom line of News Corp. Imagine that. Whether I like it or not I will keep between me and Mr. Murdoch.

What do you think of America and our future?
America is down but not out. You know, you are in a mess in the United States. I have to be honest with you because I love the United States.

And you are heavily invested here.
Yes, sir. You know, the United States is going to be the leader of the world for many years to come. But when you have a country that has $14 trillion of cumulative debt, that’s not good.

So what should happen?
I’m not the U.S. President…but taxes have to be raised across the board.

It’s a hard political sell in America.
I understand, very dangerous. I see no way out, though. You’re going to have to pay the debt, eventually.

So what do you worry about?
Clearly, the biggest worry right now for every human being in the world is terrorism.

When you look at Iraq and Afghanistan, do you worry about the possibilities of things going wrong?
Iraq is a time bomb. Afghanistan is a time bomb. Pakistan is also a time bomb. But Afghanistan is where the real threat is. This country could implode.

You know the President of Syria, Bashar al-Assad, well. Does Syria intend to play a positive role in the peace process between the Palestinians and the Israelis?
My friend Bashar al-Assad wants the Palestinians to live in peace with Israel. I can assure you that Bashar is going to play a very big role in getting the peace process moving.

What stands between an accord between Syria and Israel? A small piece of land—the Golan Heights. It’s very technical and could be resolved if there is a will from the Israelis. Bashar just wants his land back, period. The Golan is Syrian.

What is your assessment of the possibility of something happening between Israel and the Palestinians?
I believe the Middle East is the core problem. The terrorist acts and all these things are really side effects. [The situation] needs to be resolved as soon as possible. I think that if Israel wants to have peace, they can have peace within a month or two…to be honest with you.

But just last week there was some shelling from Gaza into Israel.
Israel is a dominant force in Middle East. We all know that it has the biggest military. It has nuclear bombs. So Israel is untouchable. Now, if Israel can get its house in order and have…

What do you mean by get its house in order?
The Netanyahu government does not want to have peace with the Palestinians.

So your answer to the conflict in the Middle East between the Israelis and the Palestinians is that the United States must pressure the Israelis to do more? That’s your answer?
That’s right, because all the power is in the hands of Israel. They have the land in their possession. They have Jerusalem in their possession. Everything is in their hands.

What should be done about Iran?
I think the United States has to take a very firm position against Iran…really just box them in and give them an ultimatum. Right now what’s happening in Iran reminds us of the pre-revolution era of the Shah.

Will Ahmadinejad survive?
The way he’s handling his opponents is really very savage. We don’t know how this thing is going to end. But at this stage, you must engage with Ahmadinejad until we see what happens.

Do you think the world’s perception of Islam is misunderstood?
Oh, yes, for sure. After 9/11, the world changed, and Islam came under attack. You had all these terrorist acts on U.S. soil committed by Muslims and Arabs and Saudis. So I don’t really blame the West for being worried about Islam. But you cannot generalize and say all Arabs or Muslims are terrorists. All the discussion has been around the Somali guy who tried to bomb the [Northwest (DAL)] airplane, but his father…

…Turned him in.
This guy represents Islam. He went to the U.S. Embassy and said, “My son is a terrorist in the making. Please take care of him.” This guy represents me and all my 1.3 billion Muslims. Not the guy with the bomb. Islam means peace. That’s the irony of it.

Watch Charlie Rose on Bloomberg TV weeknights at 8 p.m. and 10 p.m.

Emmy award winning journalist Charlie Rose is the host of Charlie Rose, the nightly PBS program.

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