The new digital and social media to discover Arabia and the Middle East. Offbeat. Innovative.

FII5: a promising first day

If ever proof was needed that life has indeed returned to normal, Saudi Arabia has just sent it to the world. The 5th edition of the Future Investment Initiative, the first since the transition to the new era for the structure, and the first physical edition since the start of the Covid-19 pandemic, kicked off in style yesterday, with a visit from some of the most influential people on Earth. 

The 5th edition of the Future Investment Initiative Institute started yesterday at the Ritz-Carlton in Riyadh, under the general theme “Invest in Humanity”. With a rich program and a list of speakers internationally recognized for their impact on their sector, the show, which has already established itself as a global reference for economic meetings, was packed.

From the first round table of the day, organized in front of an augmented reality set, the major issues of our time were addressed: Post-Covid recovery, sustainable development (the show arrives between the announcements of the Saudi Green Initiative and Middle East Green Initiative, and the beginning of the COP26), evolution of the relationship between the public and private sectors, the rise of crypto-currencies, the role of data, etc.

 

The eye of the investors

 

In a panel composed of some of the most prominent investors such as Larry Fink, the CEO of Black Rock (an American investment fund with almost $8 trillion in assets), his alter-ego from Blackstone Steve Schwartzman, or Ana Patricia Batin, the number one of Banco Santander, several key points of the economic recovery were raised.

 

For example, billionaire investor Ray Dalio (founder of the world’s largest hedge fund, Bridgewater Associates), pointed to the limitations of central banks. According to him, the latter “do not have the means to meet all the needs, between social, environmental, and the reduction of inequalities, because there is a strong imbalance between supply and demand of financing and subsidies, making short-term interest rates untenable, and inflation unmanageable. These are all global issues that suggest that this type of major economic meeting has a long way to go. 

On the need to implement a green policy

 

Not a single round table or plenary session goes by without the theme of sustainable development being addressed. In the aftermath of the strong announcements made by Saudi Arabia (Saudi Green Initiative) and its neighbors (Middle East Green Initiative), and on the eve of the start of the COP26 in Glasgow, ecology is on everyone’s lips. And Ana Patricia Botin recalls: “Private companies are doing a lot for the environment. Most of them have put in place carbon neutrality objectives and an action plan, but there is a need for realism and a clear and comparable transition plan, because fossil fuels are not going to disappear overnight.

Steve Schwartzman agrees, and points out another concern: “Credit institutions now have it in the back of their minds that when they finance players in the hydrocarbon world, they are not virtuous. This starts with a good intention but risks to bring us towards a shortage of energy which will impact negatively and unnecessarily the sector”.

However, walking around the various stands of exhibitors at the show, it is clear that sustainable development is no longer a futuristic utopia. Proven technologies and viable concepts (Interstellar, Siemens, etc.) are presented to the investors present (banks such as HSBC or SNB, but also public and private investment funds) as real “call-to-action“. The technology is ready. It’s up to the world to seize it.

 

A life after Covid

 

Although it seems to be behind us today, the virus has left its mark. In the tourism sector alone, Andrew W. Donald, CEO of Carnival Corporation, told us that the pandemic has had a devastating effect. Out of 300 million people employed in tourism, more than 62 million jobs have been lost, especially for small and micro businesses. In his interview with Ahmed Al Khateeb, the Saudi Minister of Tourism -a sector that is booming in the country following its opening up and the launch of a number of gigantic development projects unmatched by the rest of the world- the two men laid the foundations for a healthy and effective recovery. Harmonization of requirements, universal access to vaccines and tests on an international scale and, of course, $50 billion of investment in the sector over the next 10 years for the host country.

A breeding ground for bilateral agreements

 

If we do not have access to the fairs where meetings between heads of state or government representatives take place, it is quite possible to get an idea from what we observe on stage. For example, during the visit of the Gabonese President Ali Bongo, who welcomed the importance of the exhibition, which has become a must on a global scale, or during the visit of the Greek Prime Minister Kyriákos Mitsotákis, who expressed his desire for a “strong strategic partnership with Saudi Arabia and the Gulf countries. The Eastern Mediterranean being a region of common interest, the latter also expressed his ambitions for economic diversification, particularly through the production of natural gas, which he could see himself exporting to Europe, Egypt, and other partners. Note that the Crown Prince Mohammed Ben Salmane attended in person to this speech, before shaking hands with the Greek politician when he left the stage, and move away for a private interview. From there to imagine a future large-scale collaboration with Saudi Arabia, there is only one step …