Saudi Arabia on Tuesday kicked off a major investment conference featuring heads of state and the global business elite, as it seeks support for its sprawling “gigaprojects” and sky-high AI ambitions.
The Future Investment Initiative (FII), dubbed “Davos in the desert”, is once again trying to lure investment dollars to Saudi Arabia as the world’s biggest oil exporter attempts to diversify its economy.
But questions are swirling over Saudi Arabia’s gigaprojects — the major developments meant to herald its economic transformation — including NEOM, a futuristic new city priced at $500 billion.
Yasir Al-Rumayyan, head of the Public Investment Fund, Saudi Arabia’s influential sovereign wealth fund, said foreign investment grew 24 percent to $31.7 billion last year.
“We have taken Saudi Arabia to the world and now the world is coming to Saudi Arabia,” he said in the opening keynote address.
However delays, personnel changes and major design rethinks have reportedly affected NEOM, at a time when declining oil revenues are swelling the Saudi budget deficit.
And Saudi Investment Minister Khalid Al-Falih warned that “it is time for us to maybe scale back on this government or PIF spend… and let the private sector come in and start investing”.
– ‘Challenging agenda’ –
For Robert Mogielnicki, a senior resident scholar at the Arab Gulf States Institute in Washington, Saudi is clearly rethinking its spending priorities.
“FII is an important annual opportunity to drum up foreign investments to help finance the expensive and at times challenging economic transformation agenda,” he said.
“There is clearly a recalibration of spending priorities going on. So investors will be looking for where the money is headed going forward”.
Karen Young, a specialist in Gulf economic policy at the Middle East Institute, said “pullbacks from some of the megaprojects” would not necessarily deter foreign investment.
“On the contrary, they show fiscal discipline,” she said, adding that opportunities in tourism, entertainment, real estate and oil infrastructure “all point to strong interest in the domestic economy”.
The ninth edition of FII, featuring some 20 heads of state, is being held against the backdrop of a ceasefire in Gaza and strong economic growth in the Gulf.
Chinese Vice President Han Zheng, joined by several ministers and more than 150 business leaders, and Syria’s interim president Ahmed al-Sharaa were among the senior invitees.
Sharaa, who held talks with Saudi Foreign Minister Prince Faisal bin Farhan on Tuesday, is also set to meet Crown Prince Mohammed bin Salman and speak at the FII, Syrian state media said.
– AI player –
Saudi Arabia is hoping to show it is a genuine player in technology, especially artificial intelligence where the wealthy Gulf powers are vying for prominence.
Deals are expected involving Humain, the AI company owned by Saudi Arabia’s Public Investment Fund, and several international companies, FII organisers say.
“Some of Saudi Arabia’s new tech companies are rather nascent entities, so they’ll be looking to assure audiences that the kingdom’s tech ambitions are very real, feasible and exciting,” said Mogielnicki.
Donald Trump Jr and the heads of US investment giants Goldman Sachs, JP Morgan and BlackRock are also at the opulent conference venue in the Saudi capital.
The conference also comes weeks ahead of the crown prince’s expected trip to the US, his first since March 2018 — months before Saudi agents’ killing of Washington Post columnist Jamal Khashoggi isolated the de facto Saudi ruler.
In Washington, Prince Mohammed is set to meet US President Donald Trump, whose visit to Riyadh in May was marked by Saudi investment pledges worth $600 billion.
“There is a heavy presence of US businesspeople, reflecting the importance of the US-Saudi business corridor,” said Mogielnicki.
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© Agence France-Presse
