From oil to golf, Saudi Arabia strikes defiant tone at Miami conference
Saudi Arabia flexed its economic muscles at a gathering of tech titans and business deal-makers in Miami Beach this week, as it pitches itself as a favourable investment destination at a time of global economic uncertainty.
The two-day event organised by Saudi’s Future Investment Initiative is a miniature version of the one held in Riyadh dubbed "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 served as treasury secretary under former US President Donald Trump, was also in attendance.
Jared Kushner, Trump’s son-in-law, gave a speech Friday about bringing peace to the Middle East.
Kushner’s private equity firm Affinity Partners has been in the spotlight recently for the big-ticket cash infusions it received from Gulf states soon after he left the White House. Saudi Arabia’s Public Investment Fund 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, which has emerged as a rare bright spot at a time when the broader global economy is under pressure from high inflation, rising interest rates, and more recently, a banking crisis.
Buoyed by rising energy prices, Saudi Arabia’s economy grew 8.7 percent in 2022, the highest among G-20 countries.
But the kingdom is also undergoing a vast transformation, as Crown Prince Mohammed bin Salman pushes through some social reforms and seeks to diversify the Saudi economy away from a reliance on oil and gas, even as he pursues a severe crackdown on dissent.
Riyadh was the third fastest-growing luxury residential property market in the world last year with prices up 25 percent, according to Knight Frank's 2023 Wealth Report released in March. Meanwhile, the Saudi stock market has seen a surge in IPOs at a time when western companies have scaled back public listings.
Like its fossil fuel-producing neighbours, Saudi Arabia has been empowered by a return to traditional concerns in the West about energy security amid the war in Ukraine.
Speaking at the Miami event, Yasir al-Rumayyan, governor of Saudi Arabia’s $650bn Public Investment Fund, said some governments had “bullied” oil and gas companies, but that the transition away from fossil fuels would take time and “oil, gas and fossil fuels are not such a bad thing”.
Rumayyan is one of the most powerful financial figures in Saudi Arabia. In addition to heading the sovereign wealth fund, he is chairman of Saudi Aramco, the kingdom’s national oil company which surpassed Apple as the world’s most valuable company last year.
Rumayyan said the PIF assets would swell to $1 trillion by 2025 and at least double by 2030. The fund has splurged on everything from US stocks to Newcastle football club.
Saudi Arabia’s cash clout is showing up in some unlikely places. Middle East Eye reported previously that cash-rich property hunters from the Gulf have been scooping up luxury New York City real estate, chipping into the hold Europeans and South Americans once had on the market.
The Public Investment Fund has also invested in sports and entertainment. One of its more high-profile ventures is LIV Golf, an emerging competitor to the established US-based PGA Tour.
Greg Norman, CEO of LIV Golf, was one of the panelists at this week’s event. LIV Golf and PGA are enmeshed in a brutal legal battle, with the PGA accusing the upstart league of enticing its starts to break their contracts.
Norman took a shot at PGA as he defended LIV’s staying power in the game: “A monopolist doesn’t like to be taken off its pedestal,” he said. “We’re not going to go anywhere.”
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