Host Saudi warns of economic fallout from Gaza war at global summit

Photo: AFP

By Robbie Corey-Boulet and Haitham El-Tabei AP

Saudi Arabia on Sunday called for regional “stability”, warning of the effects of the ongoing Israel-Hamas war on global economic sentiment at the start of a summit attended by a host of Gaza mediators.

US Secretary of State Antony Blinken, Palestinian leaders and high-ranking officials from other countries trying to broker a ceasefire between Israel and Hamas are on the guest list for the summit in Riyadh, capital of the world’s biggest crude oil exporter.

The Gaza war along with conflicts in Ukraine and elsewhere put “a lot of pressure” on the economic “mood”, Saudi Finance Minister Mohammed al-Jadaan said at one of the first panel discussions of the two-day World Economic Forum (WEF) special meeting.

“I think cool-headed countries and leaders and people need to prevail,” Jadaan said. “The region needs stability.”

The war in Gaza, which has sent regional tensions soaring, began with an unprecedented attack on southern Israel by Palestinian militant group Hamas on October 7.

The attack resulted in the deaths of about 1,170 people, mostly civilians, according to an AFP tally of Israeli official figures.

Israel estimates that 129 hostages seized by militants on October 7 are still being held in Gaza, including 34 the military says are dead.

Vowing to destroy Hamas, Israel’s retaliatory offensive has killed at least 34,454 people in Gaza, mostly women and children, according to the health ministry.

Speaking in Riyadh, Palestinian president Mahmud Abbas said the United States “is the only country capable” of preventing Israel’s long-feared invasion of Rafah city in southern Gaza.

“We appeal to the United States of America to ask Israel to stop the Rafah operation,” Abbas said, warning it would harm and displace civilians, and be “the biggest disaster in the history of the Palestinian people”.

– ‘New momentum’ in hostage talks –

Saudi planning minister Faisal al-Ibrahim told a press conference on Saturday, previewing the summit, that the world is “walking a tightrope right now, trying to balance security and prosperity”.

“We meet at a moment when one misjudgement or one miscalculation or one miscommunication will further exacerbate our challenges.”

WEF president Borge Brende said there was “some new momentum now in the talks around the hostages, and also for… a possible way out of the impasse we are faced with in Gaza”.

However there will be no Israeli participation at the summit.

“This is more an opportunity to have structured discussions” with “the key players” including mediators Qatar and Egypt, he said.

“There will be discussions, of course, on the ongoing humanitarian situation in Gaza” as well as on Iran, which backs Hamas and Lebanon’s Hezbollah group, he added.

The US State Department said Blinken will “discuss ongoing efforts to achieve a ceasefire in Gaza that secures the release of hostages”.

Hamas said on Saturday it was studying the latest Israeli counterproposal regarding a potential ceasefire in Gaza, a day after media reports said a delegation from mediator Egypt arrived in Israel in a bid to jump-start stalled negotiations.

– Spotlight on Saudi –

From the outset Saudi Arabia has worked with other regional and global powers to try to contain the war in Gaza and avoid the type of conflagration that could derail its ambitious economic reform agenda known as Vision 2030.

The kingdom also remains in talks about a landmark deal under which it would recognise Israel for the first time while strengthening its security partnership with the United States, though analysts say the war has made it more difficult.

Meanwhile the conservative Gulf kingdom, home to the holiest shrines in Islam, is trying to open up to the world, luring business leaders and non-religious tourists.

Hosting international events such as the WEF meeting allows the kingdom to showcase social changes including the reintroduction of cinemas and the lifting of a ban on women driving.

“Eight years into Vision 2030, we have demonstrated our willingness to lead the way towards a model of transformative growth that is innovative, inclusive and sustainable,” Ibrahim said on Saturday.

Yet questions persist about just how much of Vision 2030 will be achieved and when, with special scrutiny falling on signature projects such as NEOM, a planned futuristic megacity.

In December, Jadaan, the Saudi finance minister, said officials had decided to push the timeframe for some major projects past 2030, without specifying which ones, though he also noted that others would be accelerated.

Saudi Arabia is projecting budget deficits through 2026 and GDP growth was nearly flat last year after a series of oil production cuts.

Jadaan stressed on Sunday that non-oil GDP growth was “very healthy” at 4.4 percent and that “Vision 2030 is about, actually, the non-oil GDP”.

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