The Arab League Summit in Algeria represents the first time the regional body has met since the coronavirus pandemic took hold across the world.
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The Arab League, founded in 1945, represents 22 nations across the Mideast and North Africa, though Syria has been suspended amid its long-running war. While unified in the call for the Palestinians to have an independent state, the body has otherwise been largely fractious and unable to enforce its mandates.
✓ The Future Investment Initiative, the crown prince's annual summit drawing global investors to the kingdom, begins Tuesday..Prince Mohammed has attended sessions in previous years.
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✓ A worsening global economic outlook and oil market volatility has raised the stakes for the government in pursuing Vision 2030, which includes a $500 billion project to build a huge, high-tech economic zone on the Red Sea called NEOM eventually meant to house 9 million people.
US execs head to Saudi Arabia for flagship forum despite tensions
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"A public spat between the United States and Saudi Arabia will not deter top Wall Street executives and U.S. business leaders from a flagship investment event starting on Tuesday where the kingdom will seek deals to reduce its economy’s reliance on oil.
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President Joe Biden has vowed "consequences" for U.S.-Saudi ties over the OPEC+ alliance's decision this month to cut oil output targets, which Riyadh defended as serving market stability.
✓ The dispute was the latest shadow to be cast over the annual Future Investment Initiative (FII), which was hit by a Western boycott over the 2018 murder of Saudi journalist Jamal Khashoggi and by the pandemic in 2020, leaving it a far cry from the 2017 inaugural event that Riyadh billed as "Davos in the Desert."
FII recovered in 2019 after the uproar over Khashoggi's killing by Saudi agents, drawing big names from financial, defense and energy firms with strategic interests in the world's top oil exporter, but garnered relatively meager foreign inflows.
More than 400 U.S. delegates are expected to attend this week, Richard Attias, CEO of the FII Institute, told Reuters, adding this was the largest representation of a foreign country.
✓This year's edition, running Oct. 25-27, includes JP Morgan boss Jamie Dimon, Pimco Vice Chairperson John Studzinski and a BNY Mellon executive as speakers, and they still plan to go, spokespeople for the companies told Reuters.
✓ Top executives from Goldman Sachs, Blackstone, Bridgewater Associates, Boeing and Franklin Templeton are on the agenda. Goldman Sachs declined to comment, while the rest did not respond.
JP Morgan and Goldman Sachs made nearly $77 million and $42 million respectively in investment banking fees in Saudi Arabia last year, Refinitiv data showed. JPM remains at the top of the league table in 2022 with over $39 million so far.
"For the most part, I do not see U.S. companies actively avoiding Saudi Arabia due to recent political tensions," said Adel Hamaizia, managing director at Highbridge Advisory and a visiting fellow at Harvard University.
"U.S. companies will be an important partner to Saudi's investment and growth plans, in traditional sectors, but also in 'newer' fields including tourism, entertainment, EV production, technology and a nascent local defense industry," Hamaizia said.
The FII is a showcase for Crown Prince Mohammed bin Salman's (MBS) Vision 2030 development plan to wean the economy off oil by creating new industries that also generate jobs for millions of Saudis, and to lure foreign capital and talent.
FDI flat
Foreign direct investment still lags behind targets, though there has been movement in new sectors as the kingdom opens up. As Boeing netted an $80 million defense contract last year, FedEx announced a $400 million 10-year investment plan in the country, the Arab world's biggest economy.
✓ At 15.3 billion riyals ($4.07 billion), inward FDI for the first half of the year was about a fifth of the $19.3 billion secured in 2021, which had included a $12.4 billion investment for Aramco's oil pipeline infrastructure.
It is well below the 2030 target of $100 billion a year under a national strategy aiming for foreign direct investment equaling almost 6% of gross domestic product (GDP) by 2030.
Uncertainty lingers around the regulatory and tax environment as well as high operational costs and lack of a skilled local workforce, even after Riyadh handed companies an ultimatum to locate regional headquarters in the kingdom by 2024 or lose out on lucrative government contracts.
"FDI flows have remained stubbornly flat and low, under 1% of GDP, and some of the notable names that have invested have had only modest success, even with government backing," said Justin Alexander, director of Khalij Economics and Gulf analyst at GlobalSource Partners.
✓ This has left the Saudi government and the Public Investment Fund to try to deliver on the crown prince's diversification promises, aided by a petrodollar windfall.
A worsening global economic outlook and oil market volatility has raised the stakes for the government in pursuing Vision 2030, which includes a $500 billion project to build a huge, high-tech economic zone on the Red Sea called NEOM eventually meant to house 9 million people.
"The government cannot afford to drive economic development indefinitely but for the time being there is no real alternative as domestic businesses are unfit to play that role, and FDI continues to disappoint," said Neil Quilliam, associate fellow at Chatham House.
Saudi Arabia's MbS 'to skip Algeria talks on doctor advice'
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"Crown Prince Mohammed bin Salman will reportedly not be attending an upcoming Arab summit in Algeria after his doctors advised him not to travel.
Saudi Arabia's powerful 37-year-old crown prince will not attend an upcoming summit in Algeria after his doctors advised him not to travel, the Algerian presidency said early Sunday.
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Saudi Arabia offered no immediate acknowledgment of the comments by Algeria about the condition of Crown Prince Mohammed bin Salman, who has quickly risen to power under his 86-year-old father King Salman. Much of the focus on the Al Saud royal family in recent years has been on King Salman's health, with analysts suggesting the prince could rule the OPEC-leading nation for decades after ascending to the throne.
The kingdom's government did not respond to requests for comment from The Associated Press about the prince, whose health hasn't previously prevented him from traveling. . .
✓ His rise to power, however, has seen the kingdom undergo rapid changes, like allowing women to drive and opening movie theaters while loosening the grip of ultraconservatives in the kingdom. However, the prince also engaged in a corruption crackdown that turned a luxury hotel in Riyadh into a prison for powerbrokers in the kingdom who could have challenged his rule. He's also led an internationally criticized Saudi military campaign in a ruinous war in Yemen that rages even today in the Arab world's poorest country.
Hmmm. . .Recently, the prince has come under intense US criticism over Saudi Arabia leading OPEC and allied nations to agree to an oil production cut of 2 million barrels per day.
✓ The Future Investment Initiative, the crown prince's annual summit drawing global investors to the kingdom, begins Tuesday amid that US pressure. Prince Mohammed has attended sessions in previous years.
Saudi crown prince ‘not attending Arab summit on doctors’ advice’
Algeria’s presidency says Prince Mohammed will not be attending the upcoming Arab League summit after his doctors advised him not to travel.
"Saudi Arabia’s Crown Prince Mohammed bin Salman will not attend an upcoming Arab summit in Algeria in compliance with doctors’ recommendations to avoid travel, the Algerian presidency has said.
Saudi Arabia offered no immediate acknowledgement of the comments on Saturday by Algeria about the condition of Prince Mohammed, who has quickly risen to power under his 86-year-old father King Salman.
Statements carried in Arabic and French on the Algeria Press Service late on Saturday referred to a statement from the office of President Abdelmadjid Tebboune about a telephone call between him and Prince Mohammed.
In the call, Prince Mohammed “apologised for not being able to participate in the Arab Summit to be held on November 1 in Algiers, in accordance with the recommendations of doctors who advise him not to travel”, the statement read.
“For his part, Mr President said he understood the situation and regretted the impediment of the Crown Prince, His Highness the Emir Mohammed Bin Salman, expressing his wishes for his health and well-being.”
A statement on the state-run Saudi Press Agency acknowledged a call between Tebboune and the prince but offered no word on the doctors’ advice. It just said the call focused on “the aspects of bilateral relations between the two fraternal countries” and possible joint cooperation.
The Arab League Summit in Algeria represents the first time the regional body has met since the COVID-19 pandemic took hold across the world.
The Arab League, founded in 1945, represents 22 nations across the Middle East and North Africa, though Syria has been suspended amid its long-running war. While unified in the call for the Palestinians to have an independent state, the body has otherwise been largely fractious and unable to enforce its mandates.
Prince Mohammed came to power in 2015 as deputy crown prince, then became crown prince some two years later after King Salman removed Prince Mohammed bin Nayef, a once-powerful figure as head of Saudi Arabia’s counterterrorism efforts and a close ally of the United States.
His rise to power has seen the kingdom undergo rapid changes, like allowing women to drive and opening movie theatres while loosening the grip of ultraconservatives. He also launched a purported corruption crackdown that targeted the richest men in the kingdom, and led an internationally criticised Arab coalition that staged a military campaign in Yemen.
US intelligence services linked Prince Mohammed to the 2018 killing and dismemberment of Washington Post columnist Jamal Khashoggi, a critic of the prince’s policies. The kingdom has denied the prince was involved, though its prosecution of the government squad behind Khashoggi’s slaying has been held behind closed doors."
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