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Saudi Arabia and other Gulf states can weather a global economic storm, says New York’s SALT conference

NEW YORK CITY: Arab Gulf states are well-equipped to weather the global economic storm as they have embraced diversification away from oil dependence and exploring alternative sources of income, say experts attending the conference fintech SALT New York this week.

Speaking to Arab News on the sidelines of the event on Monday, Noor Sweid, managing partner of international venture capital firm Global Ventures, said the key to surviving and thriving in the current economic climate is to diversify.

“Diversification is always key,” Sweid said. “They are diversifying very well in the Gulf. Governments have been trying for many years to diversify away from oil economies, and it’s really showing now. »

Rabia Iqbal moderates a panel consisting of Sufyan Al-Issa of IFC, CEO of Investopia Mohammed Al-Zaabi, Amer Bisat of BlackRock and Managing Partner of Global Ventures Noor Sweid. (Provided)

Referring to Saudi agritech company Red Sea Farms, Sweid said the company was thriving, having started in Saudi Arabia before expanding globally to address challenges in energy management, food security and climate change through vertical farming technology.

“They managed to find a way to reduce the amount of energy needed to desalinate the water needed for vertical farming by about 90 percent,” she said.

Based at King Abdullah University of Science and Technology in Thuwal, Red Sea Farms strives to reduce the carbon and water footprint of the food sector by designing, developing and delivering sustainable agricultural technologies for harsh environments.

The SALT conference in New York opened on Monday against a backdrop of economic turbulence. (Provided)

Sweid believes that the Greater Gulf region has enormous potential in the area of ​​technological innovation due to its “very young population throughout the region working very hard to solve problems using mass technology”, including drone deliveries, digital health and energy management.

She wasn’t the only one to point out the advantages of a young population. “Saudi Arabia has very good fundamentals with a young population that has growing incomes and greater diversity,” Michael Stirling, CEO and chairman of the investment board of Stirling Infrastructure, told Arab News.

Stirling Infrastructure CEO and Chairman of the Investment Board, Michael Stirling. (Provided)

“Saudi Arabia is a country that is increasingly attracting international attention.”

In 2016, Saudi Crown Prince Mohammed bin Salman announced Vision 2030 – a sweeping program of social reform and economic diversification – aimed at expanding the Kingdom’s economy into new sectors, from leisure and tourism to financial services.

Six years later, Vision 2030 has inspired a whole generation of young entrepreneurs to explore technology-enabled solutions, creating high-skilled jobs and sparking aspirations. By thus diversifying its economy, the Kingdom has also fortified itself against oil shocks.

Indeed, in comparison with other regions of the world, the Gulf is particularly resilient to shocks and is progressing well with several large-scale mega-projects, including the NEOM smart city in Saudi Arabia and the constellation of luxury resorts emerging on the Red Sea. coast.

Leaving aside the most problematic Middle Eastern countries, including his native Lebanon, Amer Bisat, managing director and head of sovereign and emerging investments at BlackRock, told a SALT session in New York that Saudi Arabia and the UAE seemed almost “boring” precisely because it was so well managed and able to ride out the global economic storm.

Managing Director and Head of Sovereign and Emerging Investments at BlackRock Amer Bisat. (Provided)

“Even if the economies of these countries are falling, they are much better equipped to deal with any downturn,” he said.

New York’s SALT conference opened on Monday amid economic turbulence – a byproduct of the COVID-19 pandemic and its associated blockages and supply chain disruptions, not to mention the damage wrought by the war in Ukraine.

The virtual economy in particular has seen a monumental downfall, with cryptocurrencies plummeting and investors losing millions in a market that offers no tangible good.

Analysts say most of the factors behind this decline are “macro,” meaning they relate to the economy as a whole rather than flaws in the crypto market. Record inflation, rising interest rates, and loss of confidence have all contributed to the crypto crash.

In his keynote address to the conference, Anthony Scaramucci, founder and managing partner of investment management firm SkyBridge, spoke about the difficult trading environment investors have faced since the pandemic, but said he nevertheless continued to invest.

Founder and managing partner of investment management firm SkyBridge Anthony Scaramucci. (Provided)

“I can already see my investment going up in value,” Scaramucci later told Arab News on the sidelines. “I think we all have to recognize that we are going through a cyclical bear market.” Nevertheless, he acknowledged “we have things that we really haven’t seen since the 1970s”.

Part of the problem is inflation, fueled by falling supply, labor shortages and demands for higher wages to help workers cope with rising prices. Asked when he expects the global economy to rebound, Scaramucci told Arab News, “I think this time next year we’ll see a very aggressive recovery.”

FTX CEO Sam Bankman-Fried addresses attendees via video link. (Provided)

Despite the market downturn, there was nevertheless an optimistic mood on the opening day of the conference. Speaking to attendees via video link, Sam Bankman-Fried, CEO of FTX, one of the world’s largest crypto-trading platforms, said he remained optimistic about digital assets because “greater regulatory clarity arrived”.

He said it would help “unlock the asset class” for a number of institutions looking to get involved in the sector.

Frank Chaparro, editor of The Block, a website dedicated to cryptocurrency news, said he believes “winter has thawed and spring is upon us.”

Editor-in-chief of The Block, a website dedicated to cryptocurrency news, Frank Chaparro. (Provided)

“We don’t know how long this winter will last,” he told Arab News, but insisted that people shouldn’t focus on the current value of cryptocurrencies and should instead recognize signs of hope on the horizon.

“It’s hopeful because it’s a unique dynamic space,” he said. “So it’s a great time to build, because we’re not distracted by the price and we can focus on the job.

“We have to think about what we just got out of. We came out of a massive price drop. We’ve seen liquidity sucked out of the system, we’ve seen leverage sucked out of the system. It was a dramatic collapse.

Referring to the collapse of the crypto token Terra (LUNA) in May this year, which wiped billions of dollars from the market, Chaparro said: “LUNA was a dramatic collapse, the likes of which we have never really seen. – a coin ranging from $50 billion market capitalization to effectively zero.

While people shouldn’t expect a “V-shaped bounce,” Chaparro said “patience is warranted.

“Optimism, as in life, is always important.”

SALT is a global thought leadership and networking forum encompassing finance, technology and geopolitics. Its bi-annual events and technology solutions connect leading asset managers and entrepreneurs with top asset owners, investment advisors and policy experts.

Founded in 2009 by SkyBridge, SALT brings together 2,000 of the world’s top investors and thinkers for three days of high-level collaboration and networking.

UAE Economy Minister Abdulla bin Touq Al-Marri. (Provided)

During a conference session on Monday, it was announced that Abu Dhabi will host Investopia, one of the largest financial events in the MENA region, in March next year.

The announcement was made during a session in which Abdulla bin Touq Al-Marri, Minister of Economy of the United Arab Emirates, and Mohamed Al-Shorafa, Chairman of the Abu Dhabi Department of Economic Development, explained how the country had refocused its economy on oil. and gas by embracing industries like fintech.

Al-Marri said the UAE introduced some of the world’s first cryptocurrency regulations as part of its roadmap to modernize its economy.

Abu Dhabi Department of Economic Development Chairman Mohamed Al-Shorafa. (Provided)

“Last year we announced our vision for the next 50 years. We are a country of visions and our leaders are visionaries,” Al-Marri said.

The country has enacted a series of new laws, including the decriminalization of bounced checks and the 100% Ownership Act, which allows onshore control of companies by non-Emiratis, to create a more favorable business environment for Emiratis. foreign investors.

Al-Marri said the UAE’s goal was to transform the economy from a regional player to a truly global one.