The power of art and innovation
report
3D REALITY BY SAMSUNG, THE ABSTRACT ART BY WASSILY KANDINSKY AND PAVEL FILONOV FROM THE RUSSIAN MUSEUM, THE ELECTRIC CAR OF THE FUTURE ASSEMBLED IN THE USA — ALL THIS COULD BE SEEN IN THE LOBBY OF THE RITZ CARLTON HOTEL IN RIYADH, WHERE THE FUTURE INVESTMENT INITIATIVE FORUM (FII) WAS HELD BETWEEN 23 AND 25 OCTOBER 2018. ART, TECHNOLOGY AND ENTERTAINMENT HAVE BECOME THE BEST SYMBOL OF CHANGES IN SAUDI ARABIA.
Фото: GIUSEPPE CACACE / AFP
Фото: предоставлено Vision Media Center
Фото: Reuters
SUMMIT ABOUT THE FUTURE
A proactive society, a thriving economy, an ambitious nation — this is how HRH Prince Mohammed bin Salman bin Abdulaziz, the Crown Prince, Vice President of the Council of Ministers and Minister of Defense, sees the country’s future. It was his idea to organize the forum, which became a perfect platform for showcasing the potential of Saudi Arabia and attracting investments. Developed under the auspices of HRH the Crown Prince, the Vision 2030 program aims to reduce the country’s dependence on oil exports and bring it to a leading position in the global economy. Reforms affect all areas of the Kingdom’s life, from the economy to culture and sports.
Among the top priorities are the creation of new jobs for young people, the localisation of production, the development of private business and technology, and the improvement of the quality of life. The implementation of ambitious plans requires significant investments, as well as technological, scientific and information support from other countries. There is no shortage of opportunities for those who want to participate in Saudi projects. For decades, Saudi Arabia has been regarded only as an oil kingdom and a profitable arms market. Now the Kingdom opens up new opportunities for investors.
Vision 2030 was first published in 2016 and the following year, literally a few months after HRH Prince Mohammed bin Salman was appointed the heir to the throne, the first investment forum was held. The participants included Christine Lagarde, the Managing Director and Chairwoman of the IMF, the heads of the New York and London stock exchanges and around four thousand people from 90 countries.
This year, HRH the Crown Prince was developing his connections with the Western world. He spent three weeks travelling around the United States, where he spoke about the country’s desire to reform. He also met with brokers of the New York Stock Exchange, IT entrepreneurs of Silicon Valley and Hollywood tycoons. Over the past year, Saudi Arabia hosted the first tours of foreign orchestras, including the Mariinsky Theatre Symphony Orchestra conducted by Valery Gergiev. However, the most important event of the year was lifting the ban on women driving in KSA.
In virtue of these changes the success of the second forum was predetermined. The ministers from European countries and the USA, representatives of international financial institutions and corporations were announced as participants. However, three weeks before the opening of FII, Saudi journalist Jamal Khashoggi was murdered in the Consulate General of Saudi Arabia in Istanbul and Riyadh came under fire. Nevertheless, the authorities of the Kingdom decided not to cancel the event.
WHO HAD REACHED RIYADH?
The number of participants of the second forum equaled the first. According to official statistics, it was attended by over three thousand five hundred participants from 88 countries, including heads of eight states and more than 20 ministers. Abdullah II, the King of Jordan; HRH Sheikh Mohammed bin Rashid Al Maktoum, the Ruler of the Emirate of Dubai; HRH Salman bin Hamad bin Isa Al Khalifa, the Crown Prince of Bahrain; HE Ali Bongo Ondimba, the President of Gabon; HE Macky Sall, the President of Senegal; HE Imran Khan, the Prime Minister of Pakistan; HE Saad Hariri, the Prime Minister of Lebanon; and representatives of the authorities of Kuwait and Ethiopia came to support Saudi Arabia. High-ranking Western politicians were not among the forum participants. However, Steven Mnuchin, U.S. Secretary of the Treasury, visited Riyadh. He held talks with his Saudi counterpart, and also met with His Royal Highness Mohammed bin Salman. Many Western businessmen participated in the forum. In particular, there was Patrick Pouyanne, the chairman and CEO of Total, Paal Kibsgaard, CEO of Schlumberger, as well as representatives of Mastercard, HSBC, Wood Mackenzie and many others. «It is very difficult to imagine that there will be a decrease in contacts with Saudi Arabia, taking into account its importance for world energy markets,» said John Flint, CEO of HSBC, in an interview with Reuters. Many businessmen from the United States and Great Britain stated that they had built relationships with Saudi Arabia over the years and did not want to lose them.
Russia was represented by a large delegation headed by Kirill Dmitriev, CEO of the Russian Direct Investment Fund (RDIF).
For their part, the Saudi authorities did not avoid the topic of the murder of the journalist. «Today as we all know these are difficult days for us and the Kingdom of Saudi Arabia…Nobody in the Kingdom can justify it,» said Khalid A. Al-Falih, the Minister of Energy, Industry and Mineral Resources of Saudi Arabia, on the first day of the forum. But at the same time, he added that «the Kingdom is in the midst of a historic transformation of unprecedented proportions…and a transformation journey will not be stopped.»
FIGHTING THE OIL ADDICTION
Undoubtedly, the central event of the forum was the speech of given by HRH the Crown Prince, which also began with the words about the Khashoggi case. «This is a heinous crime that cannot be justified,» said HRH Mohammed bin Salman. He promised to punish the guilty and maintain relationships with Ankara. However, his main promise was an oath to turn the new Middle East into a new Europe. «This is my personal war, I don’t want to leave this life until I see the Middle East ahead of the whole World. I’m sure that this will certainly come true,» said HRH the Crown Prince.
During the session, at which HRH Mohammed bin Salman spoke with the HRH Crown Prince of Bahrain and the Prime Minister of Lebanon, they spoke about the reforms that Saudi Arabia and other Arab countries are pursuing in order to abandon their oil dependence. According to HRH the Crown Prince, the country’s non-oil revenues have tripled over the past two years, and the number of jobs has doubled. HRH the Crown Prince also said that the capitalisation of the public investment fund in Saudi Arabia will reach $ 400 billion by the end of 2019. «We continue to implement all our projects, despite attempts from outside to hinder our efforts,» said HRH Mohammed bin Salman.
In confirmation of his words, almost all Saudi speakers at the forum spoke about the progress in implementing Vision 2030. In particular, Al-Falih announced the launch of the National Development and Logistics Program. «The program’s strategy is to transform Saudi Arabia into a leading industrial state and global logistics platform,» he said. "Its goal is to increase GDP by $ 586 billion by 2030, provide 1.6 million new jobs and actively attract investments.»
«The strength we need to develop in the Arab world today is the power of innovation. Existing pipelines should become credit lines for businesses. Oil refineries will be technological incubators,» said HRH Salman bin Hamad, the Crown Prince of Bahrain.
WHAT IS BEING BUILT IN SAUDI ARABIA?
Contracts worth over $ 55 billion were signed over the three days of the forum. More than half involved Saudi Aramco. In particular, the company agreed to start building a petrochemical complex in partnership with Total. Trafigura Singapore plans to build the first copper smelter in the Arabian Peninsula. There are plans to create two silicone factories, as well as many other projects on localisation of production and technology development.
Another area for development in the Kingdom is the entertainment industry. So-called giga projects will help to change the concept of recreation, including attitudes towards sports, as well as creating additional jobs outside the oil sector. These giga projects include one that is based on the Silicon Valley model: the city of the future — Neom, which will become a economic free zone and a scientific cluster; two huge tourist zones (Red Sea and AMALAA), as well as the educational and entertainment park Qiddiya. The launch of the first phase of these projects is planned for 2022. The forecasted number of jobs in tourism is 1.2 million in 2020, revenue from tourism is expected to reach $ 47 billion per year.
John Pagano, the CEO of the Red Sea Development Company, promised that work on the project will begin in 2019. According to the plans, the first visitors may be able to see Neom next year. The authorities of the Kingdom did not exclude the possibility that FII 2019 could be held in Neom. Nadhmi A. Al-Nasr, Executive Director of the Neom project, conducted dozens of negotiations with potential partners and investors at the forum this year. According to him, he was convinced that they were still ready to cooperate. The full implementation of the project, which will be built on an area of 26.5 thousand square kilometers on the Red Sea coast, will take many years. It is planned that the city will use only solar and wind energy and will become a technological hub for Asia and Africa. The investment potential of the project is $ 500 billion. Russian companies have been invited to take part in it. The invitation was made personally by HRH Crown Prince Mohammed bin Salman during his meeting with the Russian delegation.
RUSSIA IN THE MIDDLE OF AN OASIS
The Russians were especially welcomed at the forum. This was primarily because Russian businessmen had not changed their plans to visit the event. HRH Crown Prince Mohammed bin Salman, welcoming the guests, said, «Now we know who our best friends are.»
The business part of FII is the subject of a separate story (see p. 14-15). Nevertheless, it is impossible not to forget the most unexpected part of the Russian participation in the forum — its cultural program. The members of the Russian delegation — Kirill Dmitriev, head of the Russian Direct Investment Fund; Dmitry Konov, head of SIBUR; Mark Garber, GHP Group; Andrei Kostin, VTB; Mikhail Piotrovsky, director of the Hermitage Museum- said that there should be no boundaries for investments, technologies, science and culture. They built a new image of Russia for Arab, Western and Asian businessmen. What is especially appealing to the Russians is that Saudi Arabia adopted the concept of the country’s development not only through the economy, but also culture. In the coming years, it plans to open 18 new museums, 80 cultural and historical heritage sites in the Kingdom. According to Mikhail Piotrovsky, Russia is ready to help the Saudi side in developing its museums. The first Wassily Kandinsky from the Russian Museum is scheduled in the near future. Three paintings by Kandinsky and two by Filonov were displayed in the Russian pavilion at the forum. Kirill Dmitriev stated that it is not enough to build strong relationships between states alone. It is vital to build up dialogue between cultures and Russia is ready to start.