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Saudi Arabia Planning $500 Billion Megacity and Business Zone

posted by martyb on Wednesday October 25 2017, @09:54AM   Printer-friendly
from the takes-money-to-make-money dept.

takyon writes:

Saudi Arabia is planning to build a new $500+ billion city on the coast of the Red Sea. The zone will be connected to Jordan by land and Egypt by a bridge across the Red Sea. SoftBank's Vision Fund will buy a stake in the state-owned Saudi Electricity Co., which will power the city using clean energy. The project is called NEOM:

Saudi Arabia has unveiled plans to build a new city and business zone - a project that will be backed up by more than $500bn (£381bn) in investment.

Crown Prince Mohammed bin Salman says the 26,500 sq km (10,232 sq mile) NEOM zone will be developed in the north-west, extending to Egypt and Jordan.

It will focus on nine sectors including food technology and, energy and water.

The crown prince has been leading a drive to move Saudi Arabia away from its dependence on oil revenues.

In August, the Gulf kingdom launched a massive tourism development project to turn 50 islands and other sites on the Red Sea into luxury resorts.

However, the extremely ambitious nature of Mohammed bin Salman's vision is sure to raise questions about how realistic it is, the BBC's economics correspondent Andrew Walker says.

What is "NEOM"? "Neo" (Latin for "new") + "Mostaqbal" (Arabic for "future").

Also at Bloomberg (alternate editorial) and Reuters.

Related: SoftBank's $80-100 Billion "Vision Fund" Takes Shape
SoftBank May Sell 25% of ARM to Vision Fund; Chairman Meets With Saudi King

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  • (Score: 5, Interesting) by takyon on Wednesday October 25 2017, @11:21AM (2 children)

    by takyon (881) <takyonNO@SPAMsoylentnews.org> on Wednesday October 25 2017, @11:21AM (#587324) Journal

    Sure, but if they diversify, they can lower oil exports even more when oil prices are low.

    However, by developing a bunch of islands as tourist destinations and housing for the rich, they run the risk of overextending themselves like Dubai [wikipedia.org] has:

    https://en.wikipedia.org/wiki/Palm_Jumeirah [wikipedia.org]
    https://en.wikipedia.org/wiki/The_World_(archipelago) [wikipedia.org]
    https://en.wikipedia.org/wiki/The_Universe_(Dubai) [wikipedia.org]

    NEOM seems to be more about making their own version of Silicon Valley (or other "innovation hubs") rather than building a few tourist attractions. Saudi Arabia has been investing a lot in education and technology companies (such as through the SoftBank Vision Fund, check the related articles).

    It also appears that they aim to make NEOM a haven away from the country's conservatives. From the first Bloomberg article:

    The project “seems to be broadly modeled on the ‘free zone’ concept pioneered in Dubai, where such zones are not only exempt from tariffs but also have their own regulations and laws, hence operating separately from the rest of government,” said Steffen Hertog, a professor at the London School of Economics and longtime Saudi-watcher. “In Dubai, this has worked well, but attempts to copy it have done less well in the region.”

    Conservative Clerics

    A promotional video released on Tuesday features a lifestyle so far unavailable in Saudi cities. It showed women free to jog in leotards in public spaces, working alongside men and playing instruments in a musical ensemble. The one woman wearing a hijab had her head covered with a patterned pink scarf.

    [...] The unveiling of the new project comes as Saudi officials, almost two years into the latest reform drive, are still grappling with how to speed up change without crippling the economy and clashing with the kingdom’s conservative religious establishment.

    The world’s biggest oil exporter wants to overhaul the economy while creating enough wealth to avoid the risk of social unrest. Similar efforts over the past three decades have floundered, with plans losing steam as soon as crude prices recovered. Some landmark projects, such as a $10 billion financial district in Riyadh, are struggling to take off.

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  • (Score: 0) by Anonymous Coward on Wednesday October 25 2017, @09:51PM (1 child)

    by Anonymous Coward on Wednesday October 25 2017, @09:51PM (#587584)

    Do you think it will help their society get out of the middle ages?

    • (Score: 2) by takyon on Wednesday October 25 2017, @11:46PM

      by takyon (881) <takyonNO@SPAMsoylentnews.org> on Wednesday October 25 2017, @11:46PM (#587619) Journal

      I think the Saudi royalty would genuinely like to see Wahhabism disappear and will make a sincere attempt to marginalize them as the younger generations are less conservative. But it could lead to bloodshed, which is hardly good for tourism.

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