Future Investment Initiative Conference and Saudi Arabia’s Increasing Thrust on Soft Power

The 6th edition of the Future Investment Initiative (FII) Conference 2022, also referred to as ‘Davos of the Desert’ was held from Oct. 25-27, 2022 in Riyadh. Saudi Arabia organized the first FII Conference in 2017, with the objective of not just attracting foreign investors, but also hard selling some of the policy changes – both in the economic and social sphere – initiated by Saudi Crown Prince and Prime Minister Mohammed Bin Salman (MBS) as part of Vision 2030 — a blueprint for Saudi Arabia’s future economic course as well as opening vis-à-vis the rest of the world.

The inaugural FII was attended by amongst others then managing director of the IMF Christine Lagarde (now President of the European Central Bank), then US Treasury Secretary Steven Mnuchin, BlackRock CEO Larry Fink, and SoftBank CEO Masayoshi Son. 

The current FII had 6,000 delegates including top US executives and investors including Founder, CIO Mentor and Member of the Board of Bridgewater Associates Ray Dalio. Jared Kushner, son-in-law of Former US President Donald Trump and Steven Mnuchin, former US Treasury Secretary also attended the FII 2022 – both of them run private equity funds, backed by the Saudis. 

The recent deterioration of Saudi-US ties

The presence of top US business leaders at the FII is significant because ties between the US and Saudi Arabia have witnessed a significant downward slide over the past few weeks, ever since the Organization of Petroleum Exporting Countries (OPEC)+ decided to reduce oil production. The US has stated that this decision was pushed by the Saudis to benefit the Russians.

It would be pertinent to point out, that a number of US lawmakers have called for a rethink of security ties with Saudi, while US President Joe Biden too has said that the decision of OPEC+ to reduce oil production will impact bilateral ties, also warning of dangerous consequences. 

There is no doubt, that MBS is a polarising figure. It would be pertinent to point out, that before taking over as President, Biden had been scathing in his criticism of MBS, and had said that Saudi Arabia needed to be treated as a pariah due to its human rights record (the US President made this remark specifically in the context of the murder of Saudi journalist Jamal Khashoggi in 2018). Even after taking over as President, Biden’s approach vis-à-vis Saudi Arabia has been distinct from that of Trump – for instance, he released an intelligence report which clearly pointed to the fact that MBS had approved the murder of Khashoggi. 

Ever since the outbreak of the Russia-Ukraine war, improving ties with Saudi Arabia had become a compulsion for the US — in order to keep gas prices in check, especially in the run-up to the US mid-term elections — and this was one of the key reasons why Biden included Saudi Arabia in his itinerary during his Middle East sojourn earlier this year. Other western leaders who have visited Saudi Arabia in the aftermath of the Russia-Ukraine war are French President Immanuel Macron and Former UK Prime Minister, Boris Johnson. Biden’s demand for raising oil production clearly fell on deaf ears as is evident from the recent decision of OPEC+ to reduce oil production. 

Saudi Arabia has been trying to woo Western investors not just via its economic policies, but also its social reforms, which it wants to showcase to the rest of the world. Saudi Arabia was ranked 24th in the Global Soft Power Index (2021) owing to a number of reforms undertaken by MBS, specifically – economic policies, allowing women to drive and Saudi Arabia’s commitment to achieving Sustainable Development Goals (SDGs).

Saudi Arabia’s foreign policy has also been interesting. While on the one hand, its ties with the US may have witnessed a downward slope over the past few months, economic links between business communities of both countries are clearly witnessing a rise. Riyadh has unequivocally stated on more than one occasion that normalization of ties with Israel is not possible without finding a solution to the Israel-Palestinian issue. A reiteration of Saudi-Israel ties having improved, is the presence of Israeli delegates at the FII including Haj Yehia — the Chairman of Israel’s second-largest Bank, Leumi Israel. Haj Yehia happens to be the first Arab Israeli to serve as the bank’s chairman.

The FII focus was not merely on economics, but other important issues – especially the changing world order. The theme of the conference was “Investing in Humanity: Enabling a New Global Order” and a number of issues such as the global economic order in a post covid19 world and the importance of sustainable growth were discussed. JPMorgan Chase & Co. CEO Jamie Dimon said that he was more concerned about geopolitics than a recession. Said Dimon: “The most important thing is the geopolitics around Russia and Ukraine, America and China, relationships of the western world.”

Saudi Arabia like its neighbor United Arab Emirates (UAE) is focusing not just on economic progress, but also on enhancing its Soft Power and global clout — the 6th edition of FII is an important step in that direction.

[Photo by FII Institute]

The views and opinions expressed in this article are those of the author.

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