Qatar Warns of Geopolitical Risks to Middle East Growth as Saudi Scales Back Vision 2030

Qatar's Finance Minister Ali Al Kuwari cautioned that geopolitical issues pose the "biggest challenge" to economic growth in the Middle East, amid high inflation and energy prices. Speaking at the Qatar Economic Forum 2024 in Doha, Al Kuwari highlighted the impact of regional unrest, including the war in Gaza and civil unrest in Yemen and Sudan.

Why this matters: The Middle East's economic growth has far-reaching implications for global trade and stability, and geopolitical risks can have a ripple effect on economies worldwide. As the region grapples with these challenges, the consequences of inaction or mismanagement could be severe, leading to increased economic inequality and social unrest.

The finance minister also pointed to the challenges posed by high interest rates and a stronger US dollar, particularly for private businesses in the region. Qatar Investment Authority (QIA), with approximately $475 billion of assets under management, plans to continue investing in data centers, artificial intelligence, software applications, and chipmakers.

Meanwhile, Saudi Arabia, the Arab world's largest economy, intends to scale back some projects under its ambitious Vision 2030 program, which aims to diversify its economy and reduce reliance on crude exports. Saudi Finance Minister Mohammed Al Jadaan cited the impact of COVID-19, inflation, and high interest rates on the kingdom's economic projections.

Al Jadaan emphasized that Saudi Arabia has been "conservative" in its economic assumptions, particularly regarding oil revenue. Despite a drop in crude prices and production, the kingdom closed 2023 with higher than projected oil revenue. Saudi Arabia's economy contracted by 1.8% annually in the first quarter of 2023.

In a move towards renewable energy, Canada's Brookfield Asset Management is investing $10 billion to $12 billion to build 10.5 gigawatts of renewable energy for Microsoft over the next five years. This investment contributes to Microsoft's goal of matching all of its electricity consumption with zero-carbon energy purchases by 2030.

The fourth edition of the Qatar Economic Forum 2024, held from May 14 to 16 in Doha, brought together over 1,000 decision-makers from government and private sectors worldwide to discuss economic challenges and opportunities in the Middle East and North Africa region. As the region grapples with geopolitical risks, high inflation, and fluctuating energy prices, the path to sustainable <a href="https://english.aawsat.com/business/5015981-saudi-finance-minister-participates-qatar-economic-forum-2024?amp" target="_blank" rel="noopener noreferrer">economic growth remains a critical focus for policymakers and investors alike.

Key Takeaways

• Qatar's Finance Minister warns that geopolitical issues pose the biggest challenge to Middle East economic growth.
• High interest rates and a strong US dollar pose challenges for private businesses in the region.
• Saudi Arabia to scale back some projects under its Vision 2030 program due to economic pressures.
• Qatar Investment Authority to invest in data centers, AI, software, and chipmakers.
• Brookfield Asset Management to invest $10-12 billion in renewable energy for Microsoft.