The war between Israel and Hamas is adding more tension in a world already riled with unrest, according to the head of the International Monetary Fund.
“What we see is more jitters in what has already been an anxious world,” IMF Managing Director Kristalina Georgieva said at the Future Investment Initiative summit in Riyadh. “On a horizon that had plenty of clouds, one more and it can get deeper.”
Georgieva was speaking on the second day of the event, where the Who’s Who of the world of finance have gathered, despite growing tensions between Israel and Hamas. The war could end up hurting neighbouring countries, including Egypt, Lebanon and Jordan by impacting tourism and deterring investors, she said.
‘Fragmentation hurts economic growth’
The risk of economic fragmentation in the Middle East and beyond is negative for everyone, according to Saudi Arabia’s Finance Minister Mohammed Al-Jadaan.
“We have witnessed fragmentation for some time now,” he said, “with trade restrictions and what is called friend-shoring, the more trade restrictions, the more low-income countries suffer”.
There is a need to work closely with other countries and multilateral institutions such as the IMF to prevent fragmentation because without this kind of collaboration, “it’s going to be a very difficult world,” the minister said.
Investcorp to push ahead with Mideast investments
Investcorp will remain “very active” in looking at investments in the Middle East despite geopolitical tensions and the Israel-Hamas conflict, according to a top executive at the region’s biggest alternative asset manager.
The Middle East has been one of the “most vibrant and fastest growing” region for investments despite its challenges, Investcorp Holdings co-CEO Hazem Ben-Gacem told Bloomberg TV. He said the firm will continue to focus on student housing, warehouse and logistics, and multifamily homes as they have been “thriving and solid sectors” that provide the right yield to investors.
Neom looking to attract more FDIs
Saudi Arabia’s Neom is looking at bringing more foreign investments help develop Crown Prince Mohammed bin Salman’s flagship megaproject after announcing plans on Tuesday to set up a $10 billion venture with Danish freight forwarder DSV A/S.
Foreign direct investments is “absolutely a major component” of Neom’s plans to help support the kingdom’s economy and drive innovations in different directions, Chief Investment Officer Manar Al Moneef told Bloomberg TV on Wednesday.