2023-10-24 16:55:15
Riyadh (AFP) – The war between Israel and Hamas could deal a severe blow to the global economy, warn international finance representatives attending a major investment forum in Saudi Arabia.
Published on: 10/24/2023 – 6:55 p.m.
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The pessimism displayed Tuesday by certain speakers also served as a reminder of the risks of a possible escalation of violence in the Middle East on the diversification projects of the Saudi monarchy, the world’s leading exporter of crude oil.
The war, triggered on October 7 by an unprecedented attack by the Palestinian movement against Israel, risks having “a serious impact on economic development”, warned the President of the World Bank, Ajay Banga, at the opening of the Future Investment Initiative (FFI) conference in Riyadh.
“I think we are at a very dangerous moment,” he added.
More than 1,400 people were killed on Palestinian territory by Hamas men, the majority on the day of the attack, according to Israel, and more than 5,000 Palestinians in the retaliatory bombings carried out on the Gaza Strip by the Israeli army. , according to Hamas’ latest assessment.
The international community fears the opening of other fronts, in particular with the Lebanese Hezbollah, which like Hamas is supported by Iran.
“If these issues are not addressed, it will likely mean more global terrorism, more insecurity, more fear and less hope,” said Larry Fink, CEO of asset management giant BlackRock. “And when there is less hope, we see contractions in our economies.”
“Pessimistic”
More than 6,000 people are participating in the three-day forum, nicknamed the “Davos of the desert”, including financiers, business leaders and the presidents of South Korea, Kenya and Rwanda, according to organizers.
Participants arrive at the annual Future Investment Initiative (FII) conference in Riyadh, the Saudi capital, on October 24, 2023 © Féché Nureldine / AFP
Innovation and economic transformation, themes of this 7th edition, have been eclipsed by the war.
“We’re sitting here against the backdrop of, and I think we all recognize, the aftermath of the terrorist attack in Israel and the events that have unfolded since, and it’s desperately sad. So it’s hard not to not be a little pessimistic,” said Jane Fraser, CEO of Citi.
The violence which threatens to spread in the Middle East is at odds with the policy of regional appeasement advocated by Saudi Arabia, which has moved closer in recent months to its main rival, Iran.
Riyadh had also initiated discussions on possible normalization with Israel, but the talks were suspended after the start of the war.
The kingdom is halfway through an ambitious reform program, entitled Vision 2030, led by its crown prince Mohammed bin Salman, to reduce its dependence on oil.
“Saudi Arabia is entirely focused on its internal transformation, which requires a stable neighborhood,” underlined Kristin Diwan, of the Institute for Arab Gulf States in Washington.
“It is more difficult to get people to invest, play golf in Riyadh or sunbathe on the Red Sea coast when the region is associated with war and terrorism,” she said.
Return of stability
The Saudi authorities, who have condemned the violence against civilians in Gaza and affirmed their support for the Palestinian cause, however seem determined to move forward.
Participants arrive at the annual Future Investment Initiative (FII) conference in Riyadh, the Saudi capital, on October 24, 2023 © Féché Nureldine / AFP
In addition to the investor forum, Riyadh is hosting its first fashion week and a boxing match between Tyson Fury and Francis Ngannou.
The forum’s opening ceremony featured a vocal performance from Britain’s Got Talent contestant Malakai Bayoh, while a giant dove appeared on a screen behind him.
Despite everything, some participants displayed a certain optimism.
The war “is on everyone’s minds”, Laurent Germain, CEO of the French engineering company Egis Group, told AFP. “But I think that in the economic world we are optimistic people. We hope for a return to stability as quickly as possible.”
For Atul Arya, head of energy strategy at S&P Global Commodity Insights, the current geopolitical situation is “difficult”, but “economic development never stops”.
© 2023 AFP
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