RIYADH: Sustainability, technological disruption, and supply chain decentralization are redefining global investment dynamics, Saudi Arabia’s investment minister said at an event in Riyadh.

Speaking at the 28th World Investment Conference in Riyadh, Khalid Al-Falih noted that while the global economy is recovering from headwinds, challenges such as geopolitical tensions continue to create instability. 

Running from Nov. 25 to 27, WIC 2024 is focused on digital transformation and sustainable growth, and unites global leaders to discuss investment policies shaping future economies. 

Addressing attendees, Al-Falih said: “There are four major trends that will play a crucial role in shaping the global investment landscape. The first is the importance of investment in sustainability. The second is the unprecedented technological disruption unfolding in front of our own eyes.” 

He added: “The third global trend is the steady reconfiguration of the global supply chain, with the decentralization of supply chains creating hubs in emerging regions that offer new opportunities for investments, infrastructure, and new production capacity.” 

According to the minister, the fourth global trend is demographics, where entities will invest money where talent is available and consumption is high. 

Al-Falih acknowledged both opportunities and challenges for global investment, citing issues such as geopolitical instability and trade barriers but emphasized progress in inflation containment, capital market growth, and consumer confidence restoration. 

“We are confronted with crosswinds to global investments — driven forward on one hand by the tech revolution, booming stock markets, and the onset of promising monetary policies, while constrained on the other hand by geopolitical instabilities, trade barriers, and talent and skill shortages,” said Al-Falih. 

“Let me remind all of us that investments require sound and deliberate stewardship,” he said. 

Saudi Arabia has made strides under Vision 2030, with gross domestic product up 70 percent to $1.1 trillion, with half of that driven by non-oil activities. 

Al-Falih said that foreign direct investment flows have tripled, and over 550 international firms have established regional headquarters in the Kingdom, surpassing targets. 

This came as the Kingdom offered businesses various incentives if they relocated their Middle East-bases to Riyadh, including a 30-year exemption from corporate income tax and access to discounts and support services. 

In November, US-based Morgan Stanley secured approval to establish its regional headquarters in Saudi Arabia, followed by Citi Group. 

The Kingdom also launched the premium residency program to welcome international investors and talented people. “In the last three years alone, 1,200 investors have been awarded these premium residencies, allowing them to be treated as if they are in their own countries,” said Khalid Al-Falih. 

Global appreciation 

At the conference’s opening ceremony, Nivruti Rai, managing director and CEO of Invest India and president of the World Association of Investment Promotion Agencies, lauded Saudi Arabia’s diversification efforts. 

“Vision 2030 entails growth through technology, growth through greenification, and growth that also enables tourism, including spiritual tourism,” said Rai. 

She added: “In 1938, Saudi Arabia discovered oil. I am so happy that today we are dreaming of NEOM, a smart city built on technology. To enable that, the one way — and only way — is to unite and ignite the passion that drives digital transformation and the passion that harnesses sustainability.” 

Rai also highlighted the importance of a green future, noting the need for a mix of energy sources to sustain growth. 

“We all have to work toward greenification, because the world knows that power is directly proportional to GDP. The input to growth is power,” she said. 

Emergence of new markets 

James Zhan, chair and executive director of the World Investment Conference, emphasized the transformative trends shaping the global economy. 

“We are now witnessing the emergence of new markets, new funding sources, new business models, and new industries. All this offers immense potential for global investment promotion and business facilitation,” said Zhan. 

WAIPA’s executive director and CEO, Ismail Ersahin, stressed the significance of WIC in fostering collaboration and actionable outcomes. 

“World Investment Conference is not just a place where we share our experiences, but now we are also addressing investors and telling them, ‘Here are the opportunities, so you should participate,’” said Ersahin. 

New investment paradigms 

In a separate press statement,  Ersahin said that WIC 2024 comes at an “important moment in the global economy,” noting that as the international community navigates the nuances of digital transformation and the push for sustainable growth, the event serves as an essential platform for leaders to explore new investment paradigms shaping the future. 

He added: “The need for investment promotion agencies to drive economic development and foster foreign direct investment has never been more critical. By bringing together key global stakeholders in international development and investment, we are creating an environment where strategic partnerships and actionable solutions can flourish.” 

The conference is hosted by Invest Saudi, the national investment promotion brand overseen by the Saudi Investment Promotion Authority, and focuses on scaling investment opportunities while offering participants practical tools and connections to drive impactful outcomes.

RIYADH: Investment strategies must be compatible with sustainable development goals to ensure economically viable and environmentally responsible global growth, a top official said at the World Investment Conference.

Speaking on the first day of the Riyad-based event, James Zhan, chair of the WIC executive board, said reforming the global financial system should be a priority alongside helping to deliver social and environmental reform.

The 28th WIC is being held from Nov. 25 to 27,  and will see global stakeholders gather to explore investment trends and how best to foster sustainable development. 

During a panel discussion titled “Impact Maximization: Leveraging Trade and Investment for Growth and Development,” Zhan said: “We need to embed investment strategies into the SDG implementation plans. We need to transform these international investment regimes into a kind of SDG promotion instrument.”

The SDGs are a set of 17 global objectives established by the UN to address pressing social, economic, and environmental challenges, aiming to achieve a sustainable and equitable future by 2030.

Zhan also called for transforming international investment: “We need to be practicing incentives for investment on the ground.”

Ibrahim Al-Mubarak, assistant minister of investment and CEO of the Saudi Investment Promotion Authority, outlined the Kingdom’s focused approach to investment. 

“Our investment strategy focuses on quality, FDI. That’s a very big word. So, what I like to call it is smart capital,” he said. 

Al-Mubarak also emphasized Saudi Arabia’s reform journey under Vision 2030, saying: “Since the launch of Vision 2030, we have set a very ambitious reform agenda. That reform agenda comes in various ways, be it in the reform of existing laws, launching new laws, removing subsidies.”

These reforms aim to bolster the Kingdom’s investment environment, which has already been recognized as the 16th most competitive economy globally, according to the IMD’s World Competitiveness Index.

Al-Mubarak highlighted the significance of comprehensive and consistent regulatory reforms in enhancing investment appeal. 

One measure of this is the success of Saudi Arabia’s Regional Headquarters Program, which came into effect in January and encouraged multinational companies to set up regional offices in Riyadh.

“We already have exceeded our target by having 550 regional headquarters companies here. Our location, our infrastructure, our youth are enabling us to achieve those (goals), but they have to be clubbed with positive, unified, consistent regulatory reform agenda,” Al-Mubarak said. 

The assistant minister highlighted that attracting investments requires groundwork, adding: “The promotion piece of investment is one thing, but the attraction is a much tougher one because it requires a lot more reforms and work on the ground, on the infrastructure, on the policies, on the procedures.”

Chairman of the Berlin Global Dialogue and Professor of Economics at the European School of Management and Technology Lars-Hendrik Roller called for a broader perspective on global investments. 

“The world is changing, and now I think we need to look eye level (at) Africa and other continents as well,” he said. 

He also cautioned about the interplay of foreign policy and national security with economic agendas, adding: “What is now overarching more and more (is) foreign policy and economic policy, national security issues. And I think we have to be very careful with that.” 

Roller pointed out the distorting effects of subsidies on global markets and stressed the urgency of private investments in the green economy, saying: “We’re not going to solve the climate crisis unless we generate a lot more private investment in the green economy.”