Riyadh – At the prestigious Future Investment Initiative, colloquially known as ‘Davos in the Desert,’ Saudi Arabia’s Crown Prince Mohammed bin Salman’s grand vision for a rejuvenated Middle East has faced unforeseen challenges. The event was originally launched in 2017 to showcase a transformed Middle East, with Saudi Arabia at its center.
Prince Mohammed’s ambition was to open up the kingdom to foreign investment and tourism, projecting Saudi soft power on the global stage. He had successfully resolved long-standing disputes with Qatar and Turkey, facilitated a resolution to the war in Yemen, and even normalized relations with arch-rival Iran, thanks to a diplomatic effort involving Chinese President Xi Jinping.
However, as the world’s top executives gather for this year’s edition of the Future Investment Initiative, it is not the economic prosperity Prince Mohammed envisioned that is making headlines. Instead, the ongoing conflict between Israel and Hamas, amid Europe grappling with Russia’s invasion of Ukraine, has refocused attention on the Middle East’s enduring political tensions.
This geopolitical shift presents a challenge for the kingdom’s efforts to attract foreign investors and encourage businesses to expand their presence in Saudi Arabia. Ayham Kamel, head of Eurasia Group’s Middle East and North Africa research team, stated that the headlines generated by the Israel-Hamas conflict pose an unwelcome development for Riyadh but noted that the economic transformation program still offers intriguing opportunities.
While some participants have canceled their attendance due to the war, the organizers of the conference remain resolute about its continuation. Richard Attias, CEO of the FII Institute, disclosed that only 10-20 cancellations have been registered out of the 6,000 people planning to attend. Most of these cancellations resulted from corporate travel policies and increased travel insurance costs.
The event, in the eyes of its organizers, serves as a vital platform for global leaders to exchange ideas and engage in dialogue amid a tumultuous and uncertain global landscape.
Despite the challenges posed by the ongoing conflict, prominent figures in global finance, including BlackRock Inc’s Larry Fink, Bridgewater Associates’ Ray Dalio, JPMorgan’s Jamie Dimon, and Citigroup’s Jane Fraser, are still expected to grace the event. The conference will also showcase some of Prince Mohammed’s most ambitious projects, including the ambitious Neom city and eco-tourism resort plans along the Red Sea coastline.
The impact of the Israel-Hamas war on investment flows and tourism to Saudi Arabia remains uncertain, but there is a growing awareness that a broader conflict could impede Prince Mohammed’s far-reaching ambitions. While investors may exercise caution in the short term, Saudi Arabia remains committed to regional coordination to maintain stability in the region.
The vision of a “new Europe” emerging from the Middle East is viewed as a long-term aspiration, demonstrating that despite the current challenges, Saudi Arabia remains determined to pursue its path to economic transformation.