Riyadh (Saudi Arabia) (AFP) – Global business leaders gathered in Saudi Arabia on Tuesday for a glitzy investor forum as conflict shakes the region and skepticism mounts over the Gulf kingdom’s most ambitious development projects. The Future Investment Initiative (FII) debuted in 2017 as a showcase for de facto ruler Crown Prince Mohammed bin Salman’s dream of diversifying the economy of the world’s largest crude exporter away from oil. This year’s three-day event is expected to draw more than 7,000 delegates including TikTok CEO Shou Zi Chew and the chief executives of Citigroup and Goldman Sachs.
It kicked off with a performance by South African opera singers and remarks from Yasir al-Rumayyan, governor of the Saudi sovereign wealth fund, about the kingdom’s attempts to be a leader in artificial intelligence and the energy transition. However, for the second year in a row, conflict in the Middle East was sure to shape panel discussions and side meetings. Last year’s FII took place just weeks after Hamas’s unprecedented attack on southern Israel triggered the war in Gaza, with high-level speakers warning about economic turmoil should the fighting draw in other countries.
A year later, those fears have been realized, as Israel presses operations against Hezbollah in Lebanon and carries out tit-for-tat strikes with Iran. Muhammad al-Jasser, chairman of the Islamic Development Bank, told a panel on Tuesday that the Gulf region was “a bright spot in the region,” but that the ongoing wars have been a drag on growth. “The potential that was sitting there waiting to be cultivated is evaporating with all these conflicts and this level of uncertainty,” he said.
– ‘Show must go on’ –
While most speakers refrained from overtly political messages, American economist Jeffrey Sachs used his speaking slot to issue a full-throated call for the establishment of a Palestinian state. “Why is there war in Gaza and in Lebanon and possibly spreading to Iran and further in this region? Because there’s no state of Palestine, obviously,” he said. “Because Israel blocks it, the United States blocks it, and until there is, there’s going to be no peace in the region.”
FII Institute CEO Richard Attias told a press conference in Riyadh this month that the gathering is not meant to focus on “politics” and should instead tackle big-picture investments “to build a better world.” “We are an independent platform and we don’t want to be, forgive me for the word, polluted by any political events,” said Attias, former producer of the World Economic Forum in Davos, Switzerland. “I am curating events for 35 years now, and I learnt one thing: The show must go on.” On Tuesday, Attias announced that this year’s FII would be his last as CEO of the institute.
– ‘Doubters beware’ –
This year’s FII, sometimes referred to as “Davos in the Desert,” also comes as Saudi officials try to demonstrate progress on signature elements of Prince Mohammed’s Vision 2030 reform agenda. Authorities have reportedly scaled back 2030 size and population targets for NEOM, a planned futuristic megacity in northwest Saudi Arabia meant to feature a ski resort and twin skyscrapers 170 kilometers (105 miles) long. On Sunday, NEOM announced the opening of its “first physical showcase,” a luxury Red Sea island known as Sindalah featuring restaurants, hotels, and yachting berths.
“There was so much skepticism over NEOM in the Western media that the Saudis had to do something to demonstrate their commitment,” said Jim Krane of Rice University’s Baker Institute. “The early opening at NEOM is probably designed to embarrass the naysayers by telling the world that Saudi Arabia is moving ahead. It’s a ‘doubters beware’ message.”
Saudi Finance Minister Mohammed al-Jadaan said in May that “shocks” including the war in Gaza were prompting officials to “reprioritize” some aspects of Vision 2030. At a briefing with journalists in December last year, Jadaan said officials had decided to push the timeframe for some major projects past 2030, though he did not provide details and also noted that others would be accelerated.
Saudi Arabia has enacted a series of oil cuts since 2022 in a bid to hike prices and is currently producing around nine million barrels per day, well below its declared capacity of 12 million bpd. Last month, the finance ministry said it anticipated a budget deficit of 2.3 percent of GDP in 2025, citing increased government spending and lower oil revenues. Additional spending commitments meanwhile continue to pile up for events such as Expo 2030 and the 2034 World Cup, for which Saudi Arabia is the sole bidder.
© 2024 AFP
