(Riyadh) The war that has been raging for almost three weeks between Israel and Palestinian Hamas in the Gaza Strip is already affecting the economies of neighboring countries, the head of the International Monetary Fund (IMF) said on Wednesday.
“Look at neighboring countries: Egypt, Lebanon, Jordan, where the impacts are already visible,” Kristalina Georgieva told an investors forum in Riyadh.
The Israeli army has been carrying out strikes on the Gaza Strip since October 7, in retaliation for the bloody attacks by Hamas commandos on Israeli territory, the deadliest since the creation of Israel in 1948.
According to Israel, more than 1,400 people, mostly civilians, were killed in these attacks and some 220 Israeli, foreign or binational hostages were identified.
In the Gaza Strip, more than 5,791 people have been killed, including 2,360 children, since the start of the war, according to Hamas, the Islamist movement which has controlled this Palestinian territory since 2007.
Ms. Georgieva’s statement comes a day after senior financial officials warned at the opening of the Riyadh forum about a possible blow to the global economy as a whole from this war.
“What we are seeing is more nervousness in an already anxious world,” the IMF chief said. “There are countries that depend on tourism and uncertainty is harmful for tourist flows,” she added.
Outlining specific risks for the region, she noted threats to investment, insurance and the ability of countries to host more refugees.
The Future Investment Initiative (FFI) conference, known as “Davos of the Desert,” is typically an opportunity for Saudi Arabia to highlight economic reforms whose success, according to Saudi officials, depends on regional stability.
This year, Riyadh has reconnected with Iran and Syria and is trying to achieve a lasting ceasefire in Yemen while discussing possible normalization with Israel. But the kingdom suspended these discussions after the start of the war between Israel and Hamas.
“Before October 7, there was a lot of de-escalation, which brought a lot of hope to the region, and we don’t want recent events to derail that,” said Saudi Finance Minister Mohammed al -Jadaan.
His counterpart from Bahrain, which normalized its ties with Israel by signing the so-called Abraham Accords of 2020, advocated more regional cooperation. Those “who seek to destroy” should not “participate in writing the future,” stressed Sheikh Salman bin Khalifa Al-Khalifa.
Jared Kushner, advisor to the White House during the presidency of Donald Trump and architect of the Abraham Accords, estimated that the Hamas attack aimed to disrupt normalization.
Talks between Saudi Arabia and Israel “were progressing incredibly well and I think it posed a great threat to the forces of evil,” he said.
Many speakers highlighted the solidity of the economy of Saudi Arabia, the world’s largest oil exporter, which they say is capable of withstanding shocks and financing reforms thanks to its richly endowed Public Investment Fund.
The country is embarked on a vast reform program, called Vision 2030 and inspired by the crown prince and de facto ruler of the kingdom, Mohammed bin Salman, and which aims to reduce the economy’s dependence on oil.
“In Saudi Arabia itself, everything will move forward and companies from Western countries, India and China will not give up on the Saudi market,” said Naser al-Tamimi, Middle East specialist at the Italian Institute for International Political Studies.
“It is the largest economy and largest construction market in the Middle East,” he stressed.
More than 6,000 people are attending the Riyadh forum, including financiers, business leaders and the presidents of South Korea, Kenya and Rwanda, according to organizers.
