As western business cold-shoulders the FII in Riyadh over the Khashoggi issue, the nerves of the UK amusements industry could be tested over its engagement with the lucrative Middle East market. Will there be a time when we need to talk about Saudi?
Leading international business executives gave Saudi Arabia a wide-berth last at one of the leading trading shows – as the kingdom faces increasing ostracisation over the murder of journalist Jamal Khashoggi.
UK and US firms, including HSBC, Uber and JP Morgan, all withdrew from the Future Investment Initiative in Riyadh – dubbed the “Davos of the Desert” – but that didn’t stop £39bn from changing hands.
In an attempt to diversify its oil-dependent economy, the House of Saud is offering vast incentives to international investors – particularly within the kingdom’s developing leisure and entertainment sector.
One upcoming project, Qiddiya, will soon see the construction of an enormous theme park about an hour’s drive from Riyadh – which at 8,400 acres, is set to be more than twice the size of Disney World.
US theme park operator Six Flags,which recently signed on to have a presence at Qiddya, has claimed that there is “great potential” in the Saudi market – and even more so for the prospects offered by the entire region.Recent years have seen amusement stalwarts like Sega, Bandai Namco and Whitehouse Leisure amongst others making regular and successful appearances at DEAL in Dubai – the largest amusement expo for the Middle East – all bidding for business throughout the market.
And there is no doubt hat the Middle East offers highly profitable ventures. But furore over the journalist’s killing in Saudi’s Turkish embassy, in conjunction with growing outcry over the kingdom’s ongoing military involvement in neighbour Yemen, is seeing Saudi Arabia increasingly isolated. And whilst the current debate is focused solely on Saudi – ironically a country with eyes to the west – it will undoubtedly present some discomfort across the regional marketplace.
To that end, Deal 2019 may well have western suppliers forced to calculate whether their sales to a conflicted regime are worth the risk of any prospective fallout.
The lead, one expects, will be given by the government, not just in the UK but primarily in the US, who are highly unlikely, and in America’s case definitely not going to pull the rug from the trading boost that Saudi offers. One thing is certain though, the trade environment with Saudi will be a thorny issue for British business in the coming months, albeit – and almost certainly-only for a temporary term.