Saudi Arabia scrambled on Monday to prepare for an investment summit after a string of cancellations from global business titans, with Turkey’s threat to reveal the “naked truth” over critic Jamal Khashoggi’s murder casting a fresh shadow.
Starting on Tuesday, the three-day Future Investment Initiative (FII) was meant to project the historically insular petro-state as a lucrative business destination as it seeks to diversify and set the stage for new ventures and multi-billion dollar contracts. But the summit, nicknamed “Davos in the desert”, has been overshadowed by global outrage over the murder of Khashoggi inside the kingdom’s consulate in Istanbul.
The chief executive of German industrial conglomerate Siemens Joe Kaeser was the latest among dozens of global executives to withdraw from the summit, hosted by the kingdom’s sovereign wealth fund. “It’s the cleanest decision but not the most courageous one,” Kaeser wrote in a post on social network LinkedIn of his choice not to attend FII. “For now, the truth must be found and justice must be served.”
Ministers from the US, Britain and France, which have huge defence deals at stake with Saudi Arabia, have already pulled out of the summit. Corporate honchos from JP Morgan to carmaker Ford and ride-hailing app Uber, as well as media powerhouses like Bloomberg, CNN and the Financial Times have also scrapped plans to attend.
Organisers have taken down a list of speakers from its website and on Monday refused to confirm the number of attendees. One government source said the list of speakers and moderators was not yet finalised as many continued to drop out at a “rapid pace”.
This year’s summit contrasts last year’s inaugural FII — a star-studded event at Riyadh’s glittering Ritz-Carlton hotel, where Crown Prince Mohammed bin Salman was lionised as a visionary as he wowed investors with talking robots and plans for a futuristic mega-city. The prince, widely known as MBS, faces what the risk consultancy Eurasia Group calls “an acute public relations crisis” over Khashoggi’s murder.
After over two weeks of vehement denials, Saudi Arabia has now admitted Khashoggi was killed in the consulate. Turkey could cast a fresh pall on the already downgraded summit after President Recep Tayyip Erdogan vowed to reveal the “naked truth” about the case on Tuesday.
In the past weeks, Turkish media and officials speaking to international media have said audio recordings prove Khashoggi was tortured before being decapitated although no concrete evidence of their existence have emerged.
“The Saudi leadership can walk away with an event that neither fails or succeeds,” said Ayham Kamel, head of Middle East and North Africa at Eurasia Group. “But in a few months, the most important impact on the country will still be a dip in international confidence in the economic reform programme,” he said.
But many Western firms have too much at stake to abandon the Arab world’s biggest economy, and some are preparing to send lower-level executives to the summit. Senior investment bankers from HSBC and Credit Suisse are planning to attend the conference even though their chief executives have cancelled their attendance, Bloomberg News reported.
Companies from China and Russia have shown little interest in withdrawing from the event, an organiser said. Although several Western leaders like International Monetary Fund chief Christine Lagarde and US Treasury Secretary Steven Mnuchin have pulled out, Pakistan’s prime minister Imran Khan will attend the forum as Islamabad continues to seek funding to plug its deteriorating finances.
But a wider Western boycott of the conference suggests rising political risks in Saudi Arabia that could cast a shadow over foreign direct investment, which a UN body said plunged last year to a 14-year low. “Despite talk of reform, FDI inflows into Saudi have stayed low and the (Khashoggi) scandal will only increase investor uncertainty,” said research firm Capital Economics.
For now, the kingdom’s finances appear well cushioned by a recent spike in oil prices, now over $80 (70 euros) per barrel, which analysts say has reduced the urgency for outside funding.
Khashoggi’s killing fits a pattern of a recent crackdown on dissent in the kingdom, with Prince Mohammed, King Salman’s son and the de facto ruler, arresting clerics, business high-fliers and women activists. Further stoking investor anxiety, the kingdom is embroiled in an expensive war in Yemen and is leading an embargo against Qatar. Riyadh has also engaged in diplomatic disputes with Germany and Canada that threatened business ties.