A special meeting of the World Economic Forum (WEF) will take place until Monday – for the first time in the Saudi capital Riyadh. Foreign Minister Ignazio Cassis has already arrived in Riyadh, and US Secretary of State Blinken is also scheduled to appear there on Monday. Topics of international cooperation, energy, but also the wars in the Middle East and Ukraine will be discussed.
It is obvious why the WEF special meeting is taking place in the Saudi kingdom this time, says Eyad Alrefai, lecturer in political science at King Abdulaziz University in Jeddah, Saudi Arabia. In many respects, Saudi Arabia stands in the middle, between the global north and south, between the major powers USA and China, but also between the regional conflict parties Iran and Israel.
Without stability in the region, the Saudi economy cannot flourish.
At a special meeting on Sunday, Saudi Finance Minister Mohammed al-Jadan called such geopolitical conflicts the greatest risk to economic development. Political scientist Alrefai also shares this view: “Without stability in the region, the Saudi economy cannot flourish.”
Saudi Arabia wants to make the region more investment-friendly
Saudi Arabia has therefore recently put aside its own conflicts with Iran and Qatar. This is also to attract investors for gigantic infrastructure projects in the kingdom. For example, the future city of Neom, which is to be built 170 kilometers from the Red Sea into the desert. The city is expected to cost $500 billion. Part of it will be financed by foreign investors.
But they have held back since October 7, 2023, when Hamas attacked Israel and thereby destabilized the region, says political scientist Eyad Alrefai. The Gaza war and the associated escalation between Israel and Iran, in which both countries directly attacked each other for the first time, contradict Saudi Arabia’s recent efforts to make the region more stable and investment-friendly, Alrefai continued.
Legend:
Promoting investor confidence: This should also be a goal of Saudi Arabian Foreign Minister Faisal bin Farhan Al Saud at the WEF special meeting (April 28, 2024 in Riyadh).
REUTERS/Hamad I Mohammed
According to a report by the business news agency Bloomberg, Saudi Arabia had to decimate the plans for the future city of Neom. Instead of 170 kilometers, it will only be two and a half kilometers long by 2030. However, this has not been officially confirmed.
Nevertheless, one thing is clear: foreign investments within reach of Houthi positions in Yemen are not attractive. Otherwise, the last six months didn’t exactly go according to the Saudis’ plan. So Saudi Arabia and Israel faced a rapprochement that would also have created potential new trade routes through the kingdom.
Normalization of relations with Israel
Now such projects have become a long way off, says political scientist Eyad Alrefai: “Without a solution in Gaza, we cannot talk about normalizing relations between Saudi Arabia and Israel. This also reflects Riyadh’s official stance.”
The rekindled Middle East conflict runs counter to the Saudi crown prince’s plans to make his country more investment-friendly. The focus is more on conflict management than on economic cooperation, development and investment.
The invitation to the WEF special meeting in Riyadh is likely to be the crown prince’s attempt to take the reins again and promote investor confidence.