Minister of Islamic affairs holds meeting to discuss this year’s Hajj season

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WEF forum in Riyadh: Geopolitical threats top risk for global economy, says Saudi minister of finance

RIYADH: Geopolitical threats, such as the Gaza war and conflict in Ukraine, are the foremost risk for the global economy nowadays, Mohammed Al-Jadaan, Saudi Arabia’s minister of finance, told a panel of the special two-day World Economic Forum (WEF) meeting in Riyadh.

“Geopolitical threats, which unfortunately are increasing instead of decreasing, are possibly the number one risk today if you look at the global economy at large. Geopolitical tensions bring other things that are directly impacting economies,” Al-Jadaan said.

The roiling Gaza war along with conflicts in Ukraine and elsewhere put “a lot of pressure on the economic emotion” such that “economies are impacted by sentiments,” the minister added.

“It is very unfortunate to see loss of lives. Civilian lives are important whether in Ukraine, or in Palestine.

“Cool-headed countries and leaders need to prevail, you need to make sure you de-escalate.”

The Saudi official has emphasized that the Kingdom in years has made it ‘a specific objective to de-escalate in the region.’

“The region needs to focus on its people, its growth, its economy rather than focus on politics and conflict.”

The conflict in Gaza spiralled with a surprise attack on October 7 by the militant group Hamas in southern Israel, which resulted into the death of 1,170 people, mostly civilians. Israel’s devastating retaliatory offensive meanwhile has killed at least 34,388 Gaza residents, mostly women and children.

Palestinian president Mahmoud Abbas, in a separate panel, said that “110,000 people have been killed or wounded in Gaza since October 7” and “75 percent of the territory” has been destroyed by the devastating Israeli military action.

“What happened in Gaza has not happened in Germany during the Second World War and other European countries. The fighting in Gaza must stop immediately and we warn against any plans for displacement,” Abbas said in his remarks.

Geopolitical maneuverings that weigh on the global economy, according to Al-Jadaan, could include ‘fragmentation, protectionism and using economy as a serious tool to achieve objectives in terms of limitations on trade, technology.’

“Policymakers need to be agile in dealing with these,” Al-Jadaan emphasized.

Kristalina Georgieva, the managing director of International Monetary Fund, agreed, noting that ‘fragmentation in the world economy was certainly bad for the prospect of growth.’

“The mmediate priorities for countries are to get inflation rates within targets; focus on rebuilding fiscal buffers and find ways to cooperate more,” Georgieva said in the opening panel.

“In economic planning, it is OK to change… to adjust on new circumstances. And that to me is the advice I would give to everyone. You need a long term plan, like Saudi Vision 2030, and doubling down on the implementation but also you need to make sure you adjust,” Al-Jadaan meanwhile said.

“In the longer term, regardless of what is happening today, you need to focus on your own people, your human capital. This is the longer term play that is critical.

“I can say this, Saudi Arabia and the region has the means to do it, but there are a lot of countries who wil find it difficult to provide quality education, quality healthcare for their people,” he said.

Around 1,000 thought leaders from 92 countries are in Riyadh for the World Economic Forum’s Special Meeting on Global Collaboration, Growth and Energy for Development to “promote forward-thinking approaches to interconnected crises, while remaining realistic about shorter-term trade-offs” and “work to bridge the growing North-South divide on issues such as emerging economic policies, the energy transition and geopolitical shocks.”

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