World Bank to Wall Street, FII attracts financial elite

October 25, 2023, 3:42 AM

Saudi Arabia highlights modernisation
International investment announcements
‘Board of Changemakers’ on global economy

Slickly choreographed dancers clad in futuristic outfits and a teenage boy in a shiny tuxedo singing a power ballad set the stage for the seventh Future Investment Initiative (FII) in Riyadh, and all at nine o’clock in the morning.

However, there were immediately more serious themes at play at the event, which opened on Tuesday. G20 member Saudi Arabia, the world’s largest oil exporter, and a $1,100 billion economy, was not being derailed from its pursuit of modernisation.

Events further west in Israel and Gaza were barely mentioned. In his opening remarks, Richard Attias, FII Institute CEO, stressed inclusivity and tolerance, pursuit of education, and the risks and rewards of rapid technological change.

“We must foster a culture that encourages curiosity, education and peace … In every corner of the world humanity needs to find common ground,” Attias said.

Yasir Al-Rumayyan, governor of the Public Investment Fund and chairman of Aramco, Saudi Arabia’s state-owned oil producer, focused unambiguously on the kingdom’s modernisation agenda.

The Saudi economy had grown by 8.7 percent GDP in 2022, he said. The PIF focuses on 13 sectors domestically, Al-Rumayyan said, has built 19 new companies and created 560,000 new jobs.

“We have a plan, we have the objectives, we have the political will, we have the right people to execute,” Al-Rumayyan told the conference.

Saudi Arabia’s most high-profile investment event opened a day after Abdulaziz bin Salman, the minister of energy, had bullishly declared that the kingdom will not let regional turmoil slow progress and that it intends to act as a model for green energy transition.

FII’s organisers in Riyadh are likely to be pleased with the in-person turnout of leaders of international banks, multi-laterals and private equity funds. Ajay Banga, president of the World Bank, spoke of reforms to his multilateral institution. Gianni Infantino, president of Fifa, addressed Saudi Arabia’s newfound passion for football.

As delegates arrived, the first of the investment announcements began. Saudi Aramco and two South Korean companies will partner to build a $2.4 billion gas processing plant in the Jafurah gas field in Saudi Arabia.

Red Sea Global revealed it had signed a SAR2 billion ($530 million) joint venture deal with Kingdom Holding Company to develop a Four Seasons-branded resort, while the kingdom’s $500 billion futuristic Neom city announced a $10 billion logistics joint venture with Danish freight forwarder DSV.

David Rubenstein, co-founder and co-chairman of private equity Carlyle Group, chaired a roundtable dubbed Board of Changemakers. The talk was of the outlook for the global economy and interest rates, the investment cycle, US stimulus and diversification of sources of energy.

On the panel were Ray Dalio, chief investment officer of hedge fund Bridgewater Associates; Jamie Dimon, long-serving chairman and CEO of JP Morgan; Laurence Fink of Blackrock; Jane Fraser, CEO of Citi; Noel Quinn of HSBC; Stephen A Schwarzman of Blackstone Group; Shemara Wikramanayake, CEO of Macquarie; Neil Shen of Sequoia Capital and David M Solomon, chairman and CEO of Goldman Sachs. The British sent Oliver Dowden, the deputy prime minister, who spoke later.

The delicate situation in the Middle East, although on people’s minds, was not on the agenda. Fink said that he had been travelling for the last two weeks, meeting investors.

“Ukraine was never uttered,“ Fink said. “The situation in Gaza and Israel, we are watching it and reading about it. There’s no question that if these things are not resolved it probably means more terrorism and more insecurity. When there is less hope we see contractions in our economies.”