Saudi ‘Davos in the Desert’ opens with region at war

Released: 29.10.2024 – 04:48

3 min.

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 oil exporter.

This year’s three-day event is expected to attract more than 7,000 delegates, including TikTok CEO Shu Zi Chu and executives from Citigroup and Goldman Sachs.

For the second year in a row, conflict in the Middle East is likely to shape panel discussions and side meetings.

Last year’s FII took place just weeks after an unprecedented Hamas attack on southern Israel sparked a war in the Gaza Strip, with senior speakers warning of economic disruption if the fighting spread to other countries.

A year later, those fears were realized when Israel stepped up operations against Hezbollah in Lebanon and launched retaliatory strikes against Iran.

“I suspect participants will reflect seriously on the dire nature of the war between Israel and the Gaza Strip, the new invasion of Lebanon and ongoing concerns about escalating conflict throughout the region,” said Robert Mogelnicki of the Arab Gulf States Institute in Washington.

“The Saudis are currently effectively protecting their country from the worst consequences of the regional conflict, but it is very difficult to find a silver lining in such a conflict raging in the Middle East region.”

FII Institute CEO Richard Attias told a press conference in Riyadh this month that the meeting was not intended to focus on “politics” and should instead pursue large-scale investment “to build a better world.”

“We are an independent platform and we don’t want to, excuse me for saying this, be contaminated by any political events,” said Attias, a former producer at the World Economic Forum in Davos, Switzerland.

“I’ve been curating events for 35 years, and one thing I’ve learned is that the show must go on.”

“Doubters, beware”

This year’s FII, sometimes referred to as “Davos in the desert”, also comes as Saudi officials try to show progress on key elements of Prince Mohammed’s Vision 2030 reform agenda.

Authorities have reportedly cut the size and population of NEOM, a planned futuristic metropolis in northwestern Saudi Arabia that would feature a ski resort and 170-kilometer (105-mile) twin skyscrapers, by 2030.

On Sunday, NEOM announced the opening of its “first physical storefront” – a luxury Red Sea island known as Sindala, with restaurants, hotels and yacht marinas.

“There was so much skepticism about NEOM in the Western media that the Saudis had to do something to demonstrate their commitment,” said Jim Crane of Rice University’s Baker Institute.

“NEOM’s early discovery is likely intended to confuse skeptics by telling the world that Saudi Arabia is moving forward. This is a message of “to those in doubt, beware.”

Saudi Finance Minister Mohammed al-Jadaan said in May that “turmoil,” including the war in Gaza, had prompted officials to “reprioritize” some aspects of Vision 2030.

In a briefing with reporters last December, Jadaan said officials had decided to push back some major projects beyond 2030, although he did not elaborate, and said others would be accelerated.

Saudi Arabia has made a series of oil production cuts since 2022 in an attempt to raise prices and is currently producing about nine million barrels per day, well below its stated capacity of 12 million barrels per day.

Last month, the Finance Ministry said it expected a budget deficit of 2.3 percent of GDP in 2025, citing increased government spending and lower oil revenues.

Meanwhile, additional spending commitments continue to accumulate for events such as Expo 2030 and the 2034 FIFA World Cup, for which Saudi Arabia is the only contender.

© 2024 AFP