When the bombs started raining down on Iran on February 28, many business leaders hoped the conflict would be short and the economic effects would be transient. Neither has turned out to be the case.
In the latest sign that “war effects” are becoming embedded, the World Economic Forum is the latest global organization to announce the postponement of its key Gulf conference in Saudi Arabia, citing “current regional developments”.
The technology conference, Leap, private equity group, Partners Group Holding AG, and JP Morgan have each announced postponements or changes in venue since the war started. The risk index for the Gulf economies is rising.
“In light of the current regional developments, and in close consultation with the Ministry of Economy and Planning of Saudi Arabia, the World Economic Forum will be rescheduling the Global Collaboration and Growth Meeting, which had been planned for April 2026 in Jeddah,” WEF said in a statement.
“We’ve always been an organization that has global reach, multi-regional reach, and so we’ll continue, in addition to Davos, that important role of connecting people, leaders, stakeholders…”
Mirek Dusek, head of global programming for WEF
“This reflects a commitment to convening the meeting under conditions that ensure its full strategic impact. We remain committed to facilitating a forward-looking agenda for the region and beyond and will provide updates about the rescheduled meeting in due course.”
We will be back, WEF is saying. This will be a relief to in-region business leaders concerned that confidence is, at present, only travelling in one direction.
Initial analysis at the beginning of March suggested that the positive economic momentum of the Gulf—a center for innovation as well as liquidity—would outweigh drone attacks and retaliation strikes. As the conflict drags on, the data is becoming more negative.
“Our analysis suggests that oil output this year could fall by around 12% in Saudi Arabia and by 16% in the UAE,” Goldman Sachs said in a note to clients as the conflict entered its second week. “In Qatar, Kuwait, and Bahrain, we think oil output could fall by over 25% this year in the event of a prolonged war.”
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Second-order effects are also starting to bite. The closure of airports and the negative impact on tourism and real estate sales are obvious.
“We estimate that the total potential contraction in real GDP this year ranges from 1% in Oman to 14% in Kuwait and Qatar,” Goldman Sachs said. “Saudi Arabia is moderately exposed, with a potential contraction in GDP of just over 3%, while the UAE could see a contraction of around 5%.”
The region has built much of its economic forward momentum on its convening power. “Get me to the Gulf,” was the regular request of chief executives hoping to find new markets and ways of thinking. And in an age of increased regionalization, it was events like WEF Gulf that signaled intent.
I spoke to Mirek Dusek, Head of Global Programming for WEF, before the decision was taken on the Gulf. He said that, with geopolitical instability increasing, the Forum was becoming more significant, not less—evidenced by the attendance at the WEF’s annual summit at Davos.
“We did have overall record participation among the political leaders, the business leaders, innovators and civil society leaders. What was notable was that we really tried to put dialogue first,” Dusek said.
“We were playing on the spirit of Davos, which is really the fact that the town of Davos has always had this spirit of really coming together for a conversation.
“Obviously, we are operating in a more contested geo-political and geo-economic environment, and so we were not naive about this. We just wanted to make sure that we put front and center the need to have that conversation, even if people disagree.
“We’ve always been an organization that has global reach, multi-regional reach, and so we’ll continue, in addition to Davos, that important role of connecting people, leaders, stakeholders. We have a long-standing tradition of convening our second-largest gathering in China every year, and we will be gathered in Dalian at the end of June. We call it the Annual Meeting of the New Champions.”
WEF is committed to returning to the Gulf, which is welcome. Business and political leaders there know that the need for conversation and the hunt for solutions is now paramount.
