Saudi Arabia Wants to Attract Investors, and Wall Street is on Board

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Saudi Arabia is the global economy’s version of that kid at school your parents don’t want you hanging out with…but he has a car.

Saudi Arabia has earmarked $2.7 billion in incentives to attract western industrial companies with an eye toward becoming a global supply chain hub, Bloomberg reported Sunday. The White House and Riyadh may not be on speaking terms right now, but that won’t deter Wall Street from at least stopping by for a nice plate of kabsa. With deals drying up at home, they’re surely looking forward to a little desert heat.

On the Come Up

Tensions between Saudi Arabia and the US are at historic highs. Earlier this month, OPEC+ started cutting two million barrels of oil production a day, forcing the Biden administration to unlock more reserves from the domestic stockpile. President Biden warned Crown Prince Mohammed bin Salman would face “consequences” for the cutback, but the oil-fueled Saudi economy remains on a tear.

As the world’s largest exporter of oil, Saudi Arabia is on track to be this year’s fastest-growing G20 economy. The country makes roughly $1 billion on oil exports every day, but MBS intends to put Saudi Arabia on the map for more than just petroleum — pet projects include a $500 billion, zero-carbon Neom city of tomorrow that will supposedly feature a ski resort, commuter swim lanes, and “flying” elevators. The $2.7 billion incentives package is designed to attract global investment to supercharge even further:

  • The earmarked money will go toward obtaining investments in areas including manufacturing of green metals, green hydrogen production devices, and advanced recycling industries. The overall goal is to attract $10.6 billion into the country and help the kingdom become one of the 15 largest economies by 2030.
  • Saudi Arabia will host its Future Investments Initiative summit, aka Davos in the Desert, this week, and Wall Street bigwigs like Goldman Sachs CEO David Solomon, Blackstone CEO Steve Schwarzman and Bridgewater Associates founder Ray Dalio are set to attend. JP Morgan CEO is already set to hire 20 more bankers in a Saudi Arabian expansion.

Richard Attias, CEO of FII Institute, told Bloomberg organizers are seeing “more and more appetite from the US private sector to attend.” The event “has zero political agenda” and “it’s a coincidence” that the US-Saudi tension is happening at the same time, he said. Any way you look at it, these are not the consequences Biden had in mind.

Flying high: In other major Saudi news, the country is in talks with Boeing and Airbus to purchase 80 jets for a new state-owned airline. And the nation is training 100,000 job seekers in hotel and hospitality roles. Whether that sci-fi city ever comes to fruition remains to be seen, but at least Saudi Arabia will be prepared for a possible tourism boom.