In Fortune Gulf Brief today:
- “Bringing the world back to Saudi Arabia”
- The $300 billion question: will Gulf capital fund Iran’s reconstruction?
- DP World in talks to operate first U.S. container terminal
- Dubai steams ahead with $9.2 billion Metro Gold Line
- The 3 things we enjoyed reading this week
In case anyone was still in doubt about Saudi Arabia’s investment pivot then the kingdom’s most senior financial executive spelt it out in the clearest terms yet last week.
“Now our new strategy is to bring the world back to Saudi,” Yasir Al-Rumayyan, governor of Saudi Arabia’s $1 trillion sovereign wealth fund, the Public Investment Fund (PIF), told a packed auditorium at the Future Investment Initiative (FII) Priority Europe summit held in Rome last week.
While the PIF’s previous investment strategy focused on integrating Saudi Arabia more deeply into the global economy, the fund is now seeking to make the kingdom a center of global economic activity as outlined in its recently approved 2026–30 strategy.
The PIF—the main driver of Saudi’s multitrillion-dollar Vision 2030 diversification plan—is directing 80% of its capital into domestic investments, scaling back foreign allocations to 20% from a peak of 30% and deprioritizing costly or slow-yielding giga-projects.
Al-Rumayyan’s remark comes in the wake of a series of sizeble cutbacks across some of Saudi’s prized giga-projects such as Neom—an economic zone under construction in northwest Saudi Arabia.
Neom’s flagship infrastructure project , The Line—originally envisioned as a 106-mile futuristic, linear megacity for 9 million residents— is to be radically scaled back to measure just 1.5 miles in its first phase, while ski resort Trojena is also being downsized and will no longer host the 2029 Asia Winter Games, as planned.
But the kingdom is still grappling with sizeable budgets in preparing to host the Expo 2030 world trade fair and the FIFA World Cup in 2034.
The Iran war has added fresh urgency to the PIF’s need to sharpen its focus on projects and sectors that are expected to drive returns. The FT reported earlier this year that there would be a greater focus on “industrial” sectors in Neom, including data centers.
Reductions in Saudi’s oil exports, because of the blockade on the Strait of Hormuz, follows years of lower oil prices and growing budget deficits in the kingdom—since 2013, Riyadh has reported one budget surplus when oil prices passed $100 a barrel in 2022.
In helming the PIF, Al-Rumayyan is trying to maintain a difficult balancing act of funding an expensive economic transformation while coping with lower oil income, fiscal pressures and geopolitical uncertainty across the region.
While speaking at the summit, Al-Rumayyan highlighted the need for Aramco to expand its international oil storage facilities in response to oil market turbulence and called for “energy realism,” as I discuss in my online piece here.
With the ink barely dry, the interim peace deal that was signed last week between the U.S. and Iran has already been put to the test by both sides.
While the Middle East remains a geopolitical tinderbox, it is hard to envisage tourists, businesses and foreign investors rushing to fulfill Al-Rumayyan’s grand vision of bringing the world to Saudi.
Melissa Hancock [email protected]
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