Hailed as the start of Saudi’s economic reform, the Future Investment Initiative is now tainted by the Khashoggi case.

It was hailed as the start of Saudi Arabia’s revamping of its oil-based economy, but a week before its opening the second edition of the kingdom’s prestigious economic Future Investment Initiative (FII) conference has turned into a PR disaster for the country.

More than 10 of the largest and most prominent attendees have said they will no longer go to the summit following the disappearance and alleged murder of Saudi dissident Jamal Khashoggi.

Nicknamed “Davos in the Desert” after the world economic forum in the Swiss city of Davos, the elite get-together is a brainchild of Saudi Crown Prince Mohammed bin Salman and aims to forward the de facto ruler’s plans to diversify Saudi’s economy by 2030.

However, with the disappearance and alleged murder of Khashoggi, a host of companies – ranging from tech companies Google and Uber, to banking giants JP Morgan Chase, Credit Suisse and HSBC, to media organisations such as CNN, The New York Times and Financial Times – have said they will not attend the FII this year.

All companies cited worries about the kingdom’s alleged involvement in the disappearance of Khashoggi on October 2 after he entered the Saudi consulate in Istanbul – and never reemerged.

The Financial Times will not be partnering with the FII conference in Riyadh while the disappearance of journalist Jamal Khashoggi remains unexplained. — Finola McDonnell (@FinolaMcD) October 12, 2018

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CNN has withdrawn its participation in the Saudi Future Investment Initiative Conference. — CNN Communications (@CNNPR) October 12, 2018

But Luciano Zaccara, research coordinator at Qatar University’s Gulf Studies Center, said it remains to be seen if the cancellations will have any long-term effect and if companies are not just pulling out for public relations reasons

“This is a key summit and with the spotlight on Saudi Arabia; being there would be controversial for all these companies,” Zaccara told Al Jazeera.

“I’m not sure long-term, but at least in the short or mid-term, we will see some consequences [for Saudi Arabia],” he added.

According to Jocelyn Mitchell, assistant professor of American and Gulf politics at Northwestern University, corporations have a responsibility to act when it comes to human rights abuses.

“While PR plays a role in these decisions – and certainly the Saudi brand has become more toxic over the past couple of years, with its questionable decisions on the Yemen humanitarian disaster, the blockades against Qatar and Canada, and the repression of its own citizens, especially female activists – these actions show that businesses are willing to put their bottom lines on the line to advocate for basic human rights of freedom of speech and dissent,” she said.

American attendance

Mitchell said companies opting out of the corporate extravaganza are risking “monetary consequences … in the form of losing investment funds and opportunities in the Saudi economy”.

“This is not an easy choice for these corporations. But beyond the seriousness of the alleged crime, the corporate reaction also points to the fears that instability is the underlying reason for these actions by Saudi Arabia – and unstable bets are not good ones,” she said.

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US Secretary of the Treasury Steve Mnuchin has said he will attend but will be monitoring the situation.

All eyes will be on Mnuchin for any indication of the Trump administration’s next move.

“If Secretary Mnuchin withdraws from this conference, it would signify that the US president is taking the disappearance and possible murder of this journalist seriously, and imposition of sanctions may follow,” said Mitchell.

“But his attendance, on the other hand, would signify that President Trump’s interest in the bottom line – in the form of the oft-repeated billion-dollar arms deal between the US and Saudi – is winning out over the US leading on global human rights.”

Shunning Saudi

Zaccara said more companies that care about human rights need to step up – or out.

“I hope that having more and more companies pulling out [of the event] will show that this [case] is something that cannot be disregarded and that international organisations and governments should make more serious statements on it,” Zaccara said.

Some withdrawing firms rely heavily on Saudi investments for the future growth of their companies.

Uber, one of the companies that pulled out of the FII, received a $3.5bn investment from Saudi Arabia in 2016, and the managing director of Saudi Arabia’s Public Investment Fund, Yasir al-Rumayyan, sits on the Uber board of directors.

Saudi’s sovereign wealth fund also announced plans to invest $1bn in Richard Branson’s Virgin Group, who said in a blog post his companies would no longer continue their talks with Saudi investors.

The same is true for Blackstone, an American financial services company, which signed a $40bn memorandum with the Kingdom.

CEOs of all three companies withdrew from FII conference this week, with Branson saying if the reports about Khashoggi’s death were true it “would clearly change the ability of any of us in the West to do business with the Saudi government”.

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According to Zaccara, it is especially important to see what these companies do once the dust from the Khashoggi disappearance has settled.

“The Saudi government has not taken any retaliation until now because they know that they cannot push the limits or force the companies to come because they need to save face,” Zaccara said.

“After the summit [Saudi Arabia’s] position will be, ‘Now what are you going to do? Do you want to calm down and accept my version [of events]?’ And then all these companies will have to make a decision.”

When that happens, the bottom line might become the most important aspect, putting human rights abuses on the backburner again.