The political fallout of the disappearance and possible death of Saudi writer Jamal Khashoggi has continued to reverberate around the world, casting a cloud on a major investment conference aimed at promoting Saudi Crown Prince Mohammed bin Salman‘s plans for the kingdom.
A growing number of company executives, as well as media organisations, continued to pull out of the event, known as the “Davos in the Desert”, set for October 23 to 25.
On Monday, the Reuters news agency reported that the top executives of three American private equity firms, Stephen Schwarzman of Blackstone; Larry Fink of BlackRock; and Stephen Pagliuca of Bain Capital are pulling out of the summit.
Foreign capital is key to Saudi plans for economic diversification and job creation.
The crown prince, known as MBS, has aggressively pitched the kingdom as a destination for foreign investment.
Last year, MBS told Reuters that Blackstone and BlackRock Inc were planning to open offices in the kingdom.
Saudi Arabia’s Public Investment Fund (PIF), which hosts the conference, had tentatively committed $20bn to an infrastructure investment planned with Blackstone Group.
With the decision of Blackstone and BlackRock to skip the conference, it remains to be seen how Riyadh would react.
Meanwhile, CNBC reported that Ajay Banga, CEO of the credit card company, Mastercard, is also skipping the event.
In recent days, international business leaders have announced that they are pulling out of the kingdom’s upcoming investment forum.
They include the CEO of Uber, a company in which Saudi Arabia has invested billions of dollars; billionaire Richard Branson of the Virgin Group; JPMorgan Chase & Co Chief Executive Jamie Dimon; and Ford Motor Co Executive Chairman Bill Ford
They joined Viacom Inc CEO Bob Bakish, Los Angeles Times owner Patrick Soon-Shiong and World Bank President Jim Yong Kim, who have announced their decision not to attend.
The New York Times, CNN and CNBC have also announced they would not sponsor the event, and several prominent journalists have said they would not attend.
Riyadh pushing back
Saudi Arabia and its allies, however, are pushing back.
News that the CEO of Uber, Dara Khosrowshahi, would pull out of the conference drew angry responses from Riyadh.
The foreign minister of the neighbouring island kingdom of Bahrain, Khalid bin Ahmed Al Khalifa, tweeted on Sunday night that there should be a boycott against Uber both there and in Saudi Arabia.
Saudi’s PIF has invested $3.5bn in the ride-hailing app.
Similar campaigns trended on social media in Saudi Arabia and the United Arab Emirates.
UAE businessman Khalaf Ahmad al-Habtoor urged a boycott of Virgin Group, which has suspended discussions with PIF over a planned $1bn investment.
On Monday, organisers of the conference, which is not affiliated to the World Economic Forum in Davos, announced that it will go ahead as scheduled.
“With more than 150 speakers confirmed from over 140 different organisations, including 17 global partner organisations, the FII (Future Investment Initiative) programme will closely examine how investment can be used to drive growth opportunities, fuel innovation and tackle global challenges,” PIF said in a statement.
This is a moment when morality and business have become aligned. SoftBank shares down 5.5% because of their ties with the Saudi regime. https://t.co/QhZm9D5Pgl
— Bill Browder (@Billbrowder) October 15, 2018
As a result of the tensions, the Saudi stock exchange, only months earlier viewed as a darling of frontier investors, plunged as much as seven percent at one point on Sunday, before closing down over four percent. On Monday, Riyadh’s Tadawul exchange closed up four percent.
Concerns appeared to spread on Monday to Japan’s SoftBank, which has invested tens of billions of dollars of Saudi government funds.
SoftBank was down over seven percent in trading on Tokyo’s stock exchange.
Khashoggi has written extensively about Saudi Arabia, criticising its war in Yemen, its recent diplomatic spat with Canada and its arrest of women’s rights activists after the lifting of a ban on women driving. Those policies are all seen as initiatives of the crown prince.