RIYADH: Saudi officials on Tuesday lamented the economic strain of regional conflicts as the country’s sovereign wealth fund told an investor forum it was cutting the proportion of its overseas investments.

Despite a performance by South African opera singers and a remote appearance by Elon Musk, the mood at the glitzy Future Investment Initiative (FII), sometimes called “Davos in the desert”, was clouded by the crises in Gaza and Lebanon.

This year’s three-day event is expected to draw more than 7,000 delegates, including TikTok CEO Shou Zi Chew and the chief executives of Citigroup and Goldman Sachs.

The Gulf has been “a bright spot in the region”, but ongoing conflicts are hampering growth, Muhammad Al Jasser, chairman of the Islamic Development Bank, told a panel.

“The potential that was sitting there waiting to be cultivated is evaporating with all these conflicts and this level of uncertainty,” said Jasser, a former Saudi central bank governor.

Last year’s FII took place just weeks after the invasion of Israel on Oct 7, with high-level speakers warning of economic turmoil should the fighting spread.

A year later, those fears have materialised, as Israel presses operations against Hezbollah in Lebanon and carries out tit-for-tat strikes against Iran.

Saudi investment minister Khalid Al Falih said his country was inevitably harmed by regional hostilities, including attacks claimed by Yemen’s Houthi rebels on vessels in the Red Sea.

“We are the centre of the Middle East,” Falih said.

“And we feel the pain that is happening at a human level and we see the disruptions in the Red Sea.”

Future Investment Initiative, launched in 2017 to showcase Crown Prince Mohammed bin Salman’s vision of diversifying Saudi Arabia’s economy, has put the spotlight on AI this year.

Published in Dawn, October 30th, 2024