Saudi Arabia flexed its economic muscles at a gathering of tech titans and business dealmakers in Miami Beach this week, positioning itself as a favorable investment destination at a time of global economic uncertainty.
The two-day event organized by the Saudi Future Investment Initiative is a smaller version of the one held in Riyadh called “Davos in the Desert.”
The Miami event drew everyone from Wall Street titan Nelson Peltz to Crypto evangelist Michael Novogratz and WeWork founder Adam Neumann. Steven Mnuchin, who was secretary of the treasury under the former President of the United States, Donald Trump, was also present.
Jared Kushner, Trump’s son-in-law, gave a speech on Friday about bringing peace to the Middle East.
Kushner’s private equity firm, Affinity Partners, has been in the spotlight recently for the large infusions of money it received from Gulf states soon after leaving the White House. Saudi Arabia’s Public Investment Fund has pledged $2bn. On Thursday, The New York Times reported that wealth funds in the United Arab Emirates and Qatar also invested.
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Western business executives have flocked to the Gulf region, emerging as a rare bright spot at a time when the wider global economy is under pressure from high inflation, rising interest rates and, more recently, a banking crisis.
As a result of rising energy prices, Saudi Arabia’s economy grew by 8.7 percent in 2022, the highest among the G-20 countries.
But the kingdom is also undergoing a massive transformation, with Crown Prince Mohammed bin Salman pushing through a number of social reforms and trying to diversify the Saudi economy away from reliance on oil and gas, even as he continues a sharp crackdown on disagree.
Riyadh was the world’s third fastest growing luxury residential property market last year with prices up 25 percent, according to Knight Frank’s 2023 Wealth Report released in March. Meanwhile, IPOs are booming in the Saudi stock market at a time when western companies have reduced public listings.
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Like its fossil fuel-producing neighbours, Saudi Arabia is poised to return to traditional Western concerns about energy security amid the war in Ukraine.
Speaking at the event in Miami, Yasir al-Rumayyan, governor of Saudi Arabia’s $650bn Public Investment Fund, said some governments were “bullying” oil and gas companies, but it would take time and “oil, gas and” the transition from fossil fuels. fossil fuels are not a bad thing”.
Rumayyan is one of the most powerful financial figures in Saudi Arabia. As well as heading the sovereign wealth fund, he is the chairman of Saudi Aramco, the kingdom’s national oil company which surpassed Apple as the world’s most valuable company last year.
Rumayyan said PIF assets would rise to $1 trillion by 2025 and at least double by 2030. The fund has splurged on everything from US stocks to Newcastle football club.
The influence of Saudi Arabia’s money is showing up in unlikely places. Middle East Eye previously reported that wealthy property hunters from the Gulf were snapping up luxury real estate in New York City, disrupting the market once held by Europeans and South Americans.
The Public Investment Fund has also invested in sports and entertainment. One of his most high-profile ventures is LIV Golf, an emerging contender for the US-based PGA Tour.
Greg Norman, CEO of LIV Golf, was one of the panelists at this week’s event. LIV Golf and the PGA are embroiled in a brutal legal battle, with the PGA accusing the upstart league of cheating on their contracts.
Norman took a shot at PGA defending LIV’s staying power in the game: “It doesn’t like to have a monopoly taken away,” he said. “We’re not going anywhere.”