Is the Saudi ‘city of the future’ overly ambitious?
In this time of COVID-19 and a U.S. presidential transition, many are asking, “What is the future?” Apparently, it is Saudi Arabia. More precisely, it is an area of mountainous desert in the northwest of the kingdom that is the site of a futuristic, hi-tech city called NEOM.
The NEOM project was announced in 2017. This week it appears to have been relaunched in a massive public relations campaign, including a video presentation by its principle advocate, Crown Prince Mohammed bin Salman, the visionary (and controversial) de facto ruler also known as MbS.
At time of writing, the Wall Street Journal has yet to give editorial mention of that news but on Tuesday, the back page of its main section carried an advertisement depicting a grayish aerial shot of a city, probably New York, divided vertically by finger-width-line depicting the rich green foliage of a forest glade. On one side of the page were the words, “Cities separated us from nature”; on the other, “It’s time to draw the line.” At the bottom of the page is the website whatisTHELINE.com and the word “NEOM.”
“The line” is apparently a 105-mile strip of development from the Strait of Tiran, where the Gulf of Aqaba joins the Red Sea, reaching eastward to around the city of Tabuk, the local provincial capital. On the video, MbS declares (in Arabic) that the residents of NEOM (a English/Arabic word blending “new” and “future”) will be able to go from one of “the line” to the other in 20 minutes. Most won’t even need to make that journey. They will be five minutes’ walk from whatever they need to do in what seems to be, according to a graphic, the four stops on “the line.”
A further video asks a series of questions: “What if we removed cars?” “What if we got rid of streets?” and “What if we innovated in the public space?” (whatever that means). In this future city, there will be no commuting, which is just as well because there will be “zero cars, zero streets.” Work on the infrastructure project starts in the next couple of months and is expected to be completed by 2025 at an estimated cost of $100 billion to $200 billion, he told reporters. The total cost of NEOM is expected to be around $500 billion.
That might be the hoped-for future, but the present reality suggests constraints on the scale of ambition and the timeline. The absence of even the word “Saudi” on the advertisement in the Wall Street Journal may confirm to some that the kingdom is toxic for many who are still appalled by the murder of dissident journalist Jamal Khashoggi and the detention of activist Loujain al-Hathloul.
Coming a week after MbS led the Gulf Arabs to patch up their dispute with Qatar suggests he realized that the legal actions emanating from that squabble were damaging his attractiveness to foreign investors. Reuters BreakingViews described foreign business seeing the kingdom as “kryptonite,” and its human rights record remains a major concern for the incoming Biden administration.
The less that foreigners chip in to NEOM and other projects, the more the kingdom will depend on oil revenues — so, perversely relying on oil sales to fund a post-oil future. To the market’s surprise, the kingdom this week slashed oil sales by 1 million barrels per day, supposedly to help support prices during the end-of-winter seasonal low demand. Prices did shoot up but, for Riyadh, probably not sufficiently to compensate for reduced sales volumes.
Arguably, the main challenge for NEOM will be to attract Saudis and foreigners to want to live there. The latter don’t even want to live in Riyadh, according to the Financial Times, which this week reported that the Saudi government was having a hard time urging foreign companies with operations in the Middle East to shift the headquarters of their activities to the city. The principal loser would be Dubai in the United Arab Emirates (UAE), which is the current favorite for foreigners based in the region. Being the hub of Emirates, the airline with direct routes to most parts of the globe, helps, plus the schools and other amenities that expatriate families look for.
In a story last weekend, the Financial Times described Dubai as a “party city” where, during the pandemic, “visitors can enjoy restaurants, bars and even socially distanced raves.” The latter possibility was not mentioned as part of MbS’s vision for NEOM in the videos on the project’s websites.
Arguably, the surprise of the NEOM relaunch is the reminder that MbS’s vision for transforming the kingdom remains so central to his thinking, despite the distractions of Iran, the normalization with Israel by his allies in the UAE and Bahrain, and the imminent departure of White House adviser and Donald Trump son-in-law Jared Kushner, who has facilitated so much with Washington. There is also this month’s annual investor conference of the Saudi Public Investment Fund, the kingdom’s sovereign wealth fund.
The Financial Times noted that MbS is hoping to use the opportunity to persuade multinationals to the King Abdullah Financial District, a development of 59 skyscrapers in Riyadh that are empty. Such grandiose, but obsolete, projects are the usual legacy of Saudi leaders. MbS must be hoping NEOM is not going to be his own.