An upcoming Saudi investment forum, known as ‘Davos in the Desert’, is in for a massive decline in attendance after the mysterious disappearance of prominent Saudi dissident Jamal Khashoggi.
Kristian Rouz — Two of America’s best-known companies, Ford Motor Co. and JP Morgan Chase, have cancelled their plans to attend a Saudi-hosted investor event. The CEOs of both corporations cited the uncertainty related to the recent disappearance of a Saudi dissident in Istanbul, Turkey, and concerns that the Trump administration may take diplomatic action against the kingdom.
READ MORE: Ford Motor Head Cancels Trip to Riyadh in Wake of Khashoggi Disappearance
The two companies said in separate statements Sunday that they wouldn’t attend the Saudi investor conference. Both Ford and JP Morgan expressed their concerns that the recent statements from US President Donald Trump and several US senators could disrupt economic ties between the US and Saudi Arabia.
In the light, neither company appears to be willing to expose their investment plans to the heightened political risks. Analysts also say other American and European companies might follow suit, which could ultimately trigger a decline in capital flows between the US and the oil-rich kingdom.
“Horrifying things have been reported, and I am horrified. But I have to conduct the business of the IMF in all corners of the world,” Christine Lagarde, managing director at the International Monetary Fund (IMF) said.
For years, the investment forum in Riyadh — known as ‘Davos in the Desert’ — has been attracting the world’s top CEOs, who sought capital for their projects. However, after Turkey said Saudi dissident Jamal Khashoggi was killed at the kingdom’s consulate in Istanbul, many investors are reconsidering their plans, despite Saudi officials denying the claims.
Company executives have cited moral concerns over the alleged assassination as well, but political risks to the investment climate appear to be their main stated motivation in cancelling their plans.
“What has reportedly happened in Turkey around the disappearance of journalist Jamal Khashoggi, if proved true, would clearly change the ability of any of us in the West to do business with the Saudi government,” billionaire investor Richard Branson said.
Companies which could possibly take an anti-Saudi stance include other major names in the finance sector, such as Goldman Sachs Group Inc., Mastercard Inc. and Bank of America Corp.
READ MORE: Ex-Ambassador Lists Three Reasons Why US Turning Up the Heat Over Khashoggi
These developments indicate that the US may not even have to slap Saudi Arabia with sanctions at the government level, as the private sector appears to be more concerned over Khashoggi’s mysterious disappearance than the Trump administration itself.
As of Monday morning, several other US-based companies have announced they would not attend the Saudi investment event in question. These include HP Inc., Viacom Inc. and Uber — whose CEO Dara Khosrowshahi said he wouldn’t fly to Rhiyadh “unless a substantially different set of facts emerges.”
Amid these announcements, international wealth managers have expressed their concerns as well. For decades, Saudi Arabia has used its sovereign oil fund as a massive vehicle for international investment — and some of that money landed in the US, the Eurozone, and other places.
“We are closely monitoring the situation,” Brian Beades of American money-managing corporation BlackRock said.
Meanwhile, several major news organizations have also cancelled their plans to attend or cover the event, reducing investor appeal and PR opportunities at the forum.
Khashoggi was an extremely reputable journalist, and the media outlets which have taken up his cause include the Financial Times, the New York Times, Bloomberg, and CNBC.
READ MORE: UK Drafting Saudi Sanctions List in Wake of Khashoggi Disappearance — Reports
Other companies, such as Citigroup, Credit Suisse, and Standard Chartered Plc. have either provided no comment as of yet, or reiterated their commitment to attending the event regardless.
For its part, Saudi Arabia stressed it would take decisive retaliatory measures against all governmental and private entities that engage in what officials in Riyadh have dubbed ‘hostile activities’ against the kingdom.
“Whether by waving economic sanctions, using political pressure, or repeating false accusations that will undermine the Kingdom,” Saudi officials said in a statement, they would “respond with greater action.”
However, Saudi Arabia is facing substantial diplomatic pressure, and the fate of ‘Davos in the Desert’, as well as the Saudi economy itself, appears to be in for a large degree of uncertainty.