Wall Street worries about attending ‘Davos in the Desert’… Observe the Saudi planting

(Seoul = Yonhap News) Reporter Kang Hoon-sang = The Wall Street Journal (WSJ) reported on the 18th (local time) that concerns on Wall Street are growing over whether to attend the Future Investment Initiative (FII) held in Riyadh, Saudi Arabia on the 26th of this month (local time).

There are concerns about safety due to the recent frequent attacks on Riyadh by Yemen's Houthi rebels, but they are paying attention because non-participation could offend Saudi Arabia, a 'big player' in the international investment market.

According to sources familiar with the matter, some executives and employees of JPMorgan Chase and Citigroup are closely reviewing their travel plans to attend FIIs, and some are already canceling scheduled meetings. Neither company has made an official decision on whether to attend.

People close to JP Morgan CEO Jamie Dimon and Citigroup CEO Jane Fraser, who were planning to attend the event, are also weighing whether to visit the site due to concerns about safety risks.

A JPMorgan spokesperson declined to comment, while a Citigroup spokesperson said they were "monitoring the situation as it develops."

Wall Street executives are discussing response plans with their security teams. This is because Riyadh International Airport has already been attacked and there are concerns that famous hotels and major facilities around the event venue may become targets of additional attacks. At least 13 people were killed and hundreds injured in an attack on Riyadh International Airport by Houthis earlier this month.

Executives who had planned to visit Riyadh told WSJ that they would likely not go there if the risk of further Houthi attacks remained high in the coming days.

However, it seems that no one is willing to be the first to declare non-participation.

FII is called the ‘Davos of the Desert’ because it is a flagship event that Saudi Crown Prince Mohammed bin Salman has worked hard to connect his country to the world’s financial centers.

Dave Komendat, partner and chief security officer at risk management consulting firm Corporate Security Advisors, explained that companies doing business with the Saudi government or local companies will consider whether their competitors will attend and the message their non-participation will convey.

“Every single one of those factors goes into the final decision,” he said. “Some people will be willing to take risks.”

Saudi Arabia has considered converting the event to a parallel online and offline format so that foreigners can participate online, but has not yet announced a decision.

One executive who was planning to attend said that allowing remote participation would make the decision easier as they would be able to avoid the inconvenience of declaring their own absence.

This is not the first time that FII attendance has become a concern for Wall Street. Even after Washington Post journalist Jamal Khashoggi was murdered eight years ago, many figures on Wall Street did not attend the event. The WSJ reported that some Saudi officials at the time viewed attendance as a kind of 'loyalty test'.

Since then, Saudi Arabia has restored its relationship with the financial world, and Crown Prince Mohammed has been pursuing 'Vision 2030' to transform the oil-dependent economy into an international center for trade, technology, and culture.

Global financial companies have strengthened their relationships with Saudi Arabia to secure the funds needed for artificial intelligence (AI) projects and private equity investment, and to support the financing of investments needed for Saudi Arabia's economic transformation projects.

In this situation, the Houthi rebels' attacks are placing a new burden on the crown prince's economic transformation plan.

Wall Street is watching not only how the event is held, but also the impact the recent attacks and slowing oil exports will have on the Saudi economy. The WSJ reported that the possibility that Saudi Arabia would reduce overseas investment in order to inject funds into rebuilding its own infrastructure is also a concern.