The seventh Future Investment Initiative (FII7) is underway in Riyadh (24 -26 October) with 6,000 leaders, investors and innovators from around the globe taking part in over 200 panels and discussions, looking at some of the biggest challenges facing the world today.
The opening day saw a focus on how the global community can successfully navigate the emerging new norms of relations amidst instability, climate concerns and social inequality with delegates agreeing with calls for a new “global compass” in order to incentivise and support investment opportunities.
Leading a panel of business leaders, that included Jamie Dimon, Chairman & CEO, JP Morgan Chase & Co and Laurence D. Fink, Chairman & CEO, BlackRock, H.E. Yasir Al-Rumayyan, the Governor for Saudi Arabia’s Public Investment Fund, outlined a course through these unmapped waters, and how to convert challenges into opportunities for growth, impact, and resilience.
ECONOMIC CLIMATE
Speaking at a panel on the opening day, Jamie Dimon, chairman & CEO of the world’s largest bank, JP Morgan, “voiced doubts as to whether central banks and governments could manage the economic fallout from rising inflation and slowing global growth,” reports Bloomberg Business.
He likened the situation to that of the global economy in the 1970’s, where stagflation combined high inflation with uneven economic growth. And he criticised central banks for getting previous forecasts wrong.
But, despite concerns over the global economic situation, energy was a major theme for the day and the extent to which the Paris Agreement goals can align with economic growth. Delegates explored the role technology is likely to play in eliminating greenhouse gases, and the pace of global decarbonisation.
WHAT IS THE FII INSTITUTE?
The FII Institute is a global non-profit organisation which ‘aims to deliver actionable solutions to the world’s most pressing challenges’.
ESG
Business leaders and investors also resolved to tackle ESG shortcomings in the form of a Resolution to Increase ESG Investment in Emerging Markets.
This will see the FII Institute convening leaders and investors from the west, east and Global South to take collective action on inequities in current ESG frameworks. Emerging markets are home to 86% of the world’s population and responsible for 58% of global GDP, yet they receive less than 10% of all ESG investments.
As the growth engine of the future this is far from the scale necessary for sustainable growth and insufficient to meet the $2.5 to $3.7 trillion annual investment gap needed to address the UN’s Sustainable Development Goals (SDGs) in developing countries.
GREEN ENERGY
Dimon says there needs to be a clear government strategy around ESG and green energy. “Fiscal spending is higher than it’s ever been in peacetime, by a significant margin. A 25 basis-point rate hike won’t make much of a difference, but a 100 basis-point shift across the yield curve would.
“What we see today resembles the 1970s—a lot of spending. Governments are pushing for ESG, but without implementing carbon taxes or a rational strategy,” he adds.
Ray Dalio, Founder, CIO Mentor & Member of the Board, Bridgewater Associates, LP, agrees. “What we see today and as we go into US elections which are going to be over irreconcilable differences over wealth and power. Look at geopolitical issues and climate issues. Climate issues will cost us $5-10 trillion dollars a year in world GDP. It must be addressed,” he says.
By 2030, Saudi Arabia wants 50% of its power generation to be based on renewable energy and the other 50% based on gas which emits less than liquid.
H.E. Yasir Al-Rumayyan says: “We have to invest more in renewable energy. If you look at the targets, by 2045, $283 trillion dollars that need to be invested cumulatively from 2020.
Ajay Banga, President of the World Bank adds: “The new mission of the World Bank is to focus not just on eradicating poverty and sharing prosperity, but on [ensuring] a liveable planet and addressing the world’s intertwined crises and challenges.”
AI
Artificial Intelligence (AI) and the risks to humanity in the future was also a big topic of the day.
‘70% of companies will adopt at least one type of AI tech by 2030′
With global concerns about government and private sector action on governance and regulation of AI. An urgent need for immediate and robust global action has been identified at FII:
Threats identified include:
- The erosion of information reliability and security and potential malign impact on elections (4Bn people are due to vote in elections in 2024);
- Lowering of barriers to creation of chemical and bio weapons (for example an AI system recently generated 40,000 candidate chemical warfare agents);
- Global cyberattacks are increasing, in 2022 by 38%.
- A unified and inclusive governance regime for AI is urgently needed. It has been identified that until there is global alignment on AI development and regulation, risks will remain.
The resolution sets out urgent actions on AI:
- Deeper policy collaboration between industry and government, fostering transparency & accountability, as well as reporting mechanism for failures and risks;
- A unified global and inclusive AI governance regime, including appropriate representation of emerging markets;
- Active investment in skills development and social safety nets to ensure just transition for workers displaced by AI (automation will displace between 400 and 800 million jobs by 2030)
- Establishment of adequate global response capability to address risks;
- Greater commitment, transparency, and accountability by AI companies, reducing AI risks by focusing on security and by adopting a safety-level based approach for the development of future AI models;
- Need for a shared vision of the positive future that can be enabled by this technology.
The FII7 summit takes place a month after AI issues were addressed at the G20 summit in New Delhi and at UNGA in New York. And one week before the UK hosts an AI safety summit at the home of codebreaking and computing, Bletchley Park.
“It is absurd that tech companies and governance mechanisms in China, the US, EU, UK and Global South are so divergent on the threats and opportunities,” says Richard Attias, CEO of the Future Investment Initiative Institute.
“The AI market is projected to reach up to $1.8Tn. AI stands poised to resolve some of our toughest challenges. But it can also create major global risks if we don’t urgently align AI with the needs of humanity. AI is about to transform global societies and economies and the world needs to get to grips with this quickly,” he adds.
Keep up-to-date with the latest business news and analysis on Matt Haycox Daily. For all the latest news, insights and strategy, sign up for the Matt Haycox weekly newsletter, below.
