Slick videos, fake moons, glow-in-the-dark sand, and fake rain. Neom? Nightmare or a futuristic green fantasy? PR stunt or a serious step in building a new Middle East green city? The authors of the following article by the Green Prophet say that they’ve already read that Saudi Arabia wants to be the new Ibiza and that reform is happening there at breakneck speed. Let’s check their opinion.
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Even amid COVID-19, we saw an advertisement that Saudi Arabia is looking for a PR firm to handle Neom. This is a new conceptual mega city from your futuristic dreams or nightmares that is promised to be run on renewable energy and built on LEED standards. See Masdar in the United Arab Emirates to see how that thinking worked. Could Neom be different?
Located deep in the Saudi Arabian desert, overlooking the Red Sea, the city of Neom is starting to take shape. Saudi Arabia is building a futuristic mega-city, 33 times the size of New York, about 10,000 square miles, from scratch. Neom, which means “new future,” sets out to create a new model for sustainable living based on advanced technology. What exactly does Neom promise? And will those promises become a reality?
Neom is a portmanteau of the Greek word neos, meaning “new,” and mustaqbal, the Arabic word for “future.”
Cloud seeding, fake rain, and what’s wrong with the real moon?
Neom has gained media attention with daring project proposals that speak to the imagination. The city is meant to use cloud seeding technology to create artificial rain and be illuminated by a giant artificial moon. It is to include an attraction park with robotic dinosaurs and a coastline with glow-in-the-dark sand on its beaches. According to Saudi officials, holographic teachers will teach classes and people will go about in flying taxis.
But Neom is setting out to be more than just a set of novelty attractions. Neom is to include towns and cities, ports and enterprise zones, research centers, sports and entertainment venues, and tourist destinations. It describes itself as a home and workplace for people who want to dream big and be part of building a new sustainable future. According to the official website, the city is to serve as a living laboratory where entrepreneurship and innovation shape the course of the future.
A circular system meant for 200 years in the future?
To build that future, Neom targets a wide range of sectors. The city aims to rely 100% on renewable energy, create a zero waste and fully circular system for water management, and transform traditional food systems. It wants to use biotechnology and genetics to create a next-generation healthcare system. It envisions an environment where the gap between humans and machines blends, robots come to life, and artificial intelligence and the internet of things shape the world.
All this should turn it into the most advanced and livable urban environment in the world. Considering that Masdar had massive green ambitions and practically no one lives there, it might be hard to bridge the divide between what might sound like a great idea and what human beings actually want in their souls – like gardening, Slow Food, back to nature.
Neom is the brainchild of crown prince Mohammed Bin Salman (who else?) who is considered the de facto ruler of Saudi Arabia. The project is part of a broader plan, named Vision 2030, that aims to grow and diversify Saudi Arabia’s economy, reducing dependency on oil revenues, promoting private sector growth, and supporting entrepreneurship. It is to be a cross-over between Silicon Valley, Dubai and Seychelles, positioning Saudi Arabia as a global hub for technology, entertainment, and tourism.
While located within Saudi Arabia’s borders, the project has an international scope. The city is targeted to house more than a million international citizens and attract creators and innovators from around the world. The Saudi Public Investment Fund (PIF) has pledged $500 million dollars, but this is not enough to complete the project. For the rest of the funding, Saudi officials are looking for foreign investors.
The city is scheduled to be ready in 2025 and the first phase of the project should be finished this year. Work has started on Neom Bay, a residential area and tourist destination. Saudi Arabia has launched a new e-visa, opening its doors to foreigners of 49 nationalities. The government has also launched initiatives to create a buzz around the project, hosting international media, business executives and social influencers to the site, and organizing a three-day music festival. A series of political events have, however, cast a shade on the project.
Some of the features of Neom leaked from a Wall Street Journal report:
Cloud seeding: The planned site for Neom sits on the coast and is surrounded by desert where there is virtually no rainfall or very sparsely. Cloud seeding could be used to make it rain.
Dystopian surveillance: Facial recognition, drones, cameras everywhere. The aim is only to keep citizens safe. Hmm.
Genetic-engineering: Neom would host a genetic-modification project of some sorts. The WSJ quotes plans from Japanese tech giant Softbank to create “a new way of life from birth to death reaching genetic mutations to increase human strength and IQ.” Um.
Robots everywhere: Robot “maids” would do your chores for you; robot cage fights would be staged for your amusement (like are we in the 5th century?); and an amusement park full of robot dinosaurs.
Flying taxis: “I don’t want any roads or pavements. We are going to have flying cars in 2030!” said Prince Fahd bin Sultan, the region’s governor, in a planning meeting. Another planning document reportedly read: “Driving is just for fun, no longer for transportation.”
Fake moon: Details are unclear in what is already an incredibly hazy report, but apparently there have been proposals for a fake moon, which could perhaps be created by a fleet of drones or involve live-streaming images from space.
Within the past years, Saudi Arabia has undergone progressive social reforms, among others to improve the social status of women. But during the same period, Mohammed Bin Salman has cracked down hard on his opponents. Analysts claim opponents have been detained to tighten his control over the kingdom. The Saudi government and crown prince have also been linked to the assassination of Washington Post Journalist Jamal Khashoggi, although they deny the allegations.
Investors take note
Although Neom ensures it will be regulated by a legal system compatible with international norms, political issues and Saudi Arabia’s religious-based justice system are potential red flags to foreign investors. Critics claim the project is a personal enrichment project of Mohammed Bin Salman and a means to cover up his crackdowns.
According to them, the project is a PR stunt to create positive press and put a liberal mask on Saudi Arabia’s face.
On a more fundamental note, it remains to be seen whether Neom will be everything it promises to be. A new kind of society, where people live sustainably and prosperously, in harmony with nature, sounds like a dream to many. The world needs technological innovations to lead the way towards sustainable solutions. Neom has the potential to create that. But a world ruled by biotechnology, artificial intelligence, and the internet of thing could also quickly spiral out of control, into the opposite of a dream: a dystopian society. Only time will tell.
Is Neom real or is it a publicity stunt? Will the Saudi government be able to attract foreign investors to fund the project and make it happen? If they do, will it live up to the sky-high expectations? Will the megacity become the hotspot it wants to be or will it remain an empty bubble in the desert? And if the project really takes off, what will be the outcome of this ambitious but controversial experiment? The world is watching.
Meanwhile, make judgement for yourself. The company has produced a series of slick videos using blond Australians, hulky Germans and pro tennis players to try and make Saudi Arabia look like the new Berlin. Great cities emerge from history, culture and art. Not a pile of money and PR stunts. Time will tell how this will play out.
With so many places to travel in Sinai, Egypt: Aqaba, Jordan, and Eilat, Israel already, I think the Red Sea is better left alone. Of course, Saudi Arabia should have its center too, but maybe something a lot more modest. And what ever happened to Saudi’s eco-park Musma Park which was announced in 2010? Seems like nothing.
How will Vision 2030 Contribute to Modernizing the Saudi Economy?
The announcement of the NEOM project by the Saudi Crown Prince Mohammed bin Salman in October 2017 revealed the growing trends of modernizing and reshaping the Saudi Economy in the post-oil era.
The author of the FutureUAE article guesses that the project indicates the Kingdom’s persistent approach to adopt large-scale development projects. They capitalize on the advantages of the Saudi location and opportunities for cooperation with neighboring countries to transform towards a diversified, modern, and more open economy.
Underpinnings of the Saudi Economy
The Saudi Vision 2030 features broad plans, including economic, social, and development programs to prepare Saudi for the post-oil economy. It consists of three main axes: a thriving economy, a vibrant society, and an ambitious nation.
The vision focuses on the investment of Saudi Arabia’s primary resources, as it possesses the largest oil reserves in the region and the second-largest reserves in the world, estimated at 267 billion barrels of oil, about 8.5 trillion cubic meters of natural gas, plus considerable reserves of gold, Phosphate, uranium, as well as renewable energy sources and others.
As for the human component, Saudi Arabia has 33.2 million people, mostly youth, with a relatively high growth rate. More than 78% of the population live in urban areas, which is a positive factor with regard to market size and domestic demand.
Moreover, Saudi Arabia enjoys a large area and a distinct geographical location, as it comes first in terms of space in the Middle East and North Africa region and 13th globally, with up to 2.250.000 square kilometers. It is situated in the far West Asia, near Africa and Europe, with a long coastline on the Arabian Gulf in the east and on the Red Sea and the Gulf of Aqaba in the west, with a total coastline of 2640 km. The huge area and geographical location provide it with comparative advantages that enable it to be a business and trade hub at the regional and global levels.
Post-oil Era
In order to prepare the Saudi economy for the post-oil era, the Kingdom’s vision focused on the optimal investment of these resources and set relevant goals, on top of them spurring real growth to increase the size of the Kingdom’s economy to advance to the 15th rank, instead of the 19th in global rankings, raising the proportion of non-oil exports from 16 percent to 50 percent of the GDP.
In addition, the vision aims to increase the proportion of local content in the oil and gas sectors from 40% to 75%, and raise the contribution of small and medium enterprises from 20% to 35% of the GDP. Furthermore, the vision aims to enhance the contribution of tourism in the GDP by doubling the numbers of Umrah and Haj pilgrims.
The vision also seeks to take advantage of the geographical location of the Kingdom by turning it into a hub for logistics services, to advance on the service performance Index logistics from the 49th to the 25th at the global level. It also aims to progress to the 25th in the Global Competitiveness Index, to become one of the first 10 countries in this ranking.
Furthermore, the Kingdom seeks to achieve a set of social-related development goals with, such as: raising the rate of Saudis’ ownership of houses, boosting women’s participation in the labour market, slashing the unemployment rate by half, promoting the practice of sports and family spending on culture and leisure, and improving life expectancy at birth, among other goals.
Surely, the implementation of this vision needs a huge funding, about USD 4 trillion according to McKinsey Institute estimates. To secure this funding, the Kingdom seeks additional sources along with the large cash reserves it possesses, namely USD 516 billion of reserves in the Saudi Arabian Monetary Authority (SAMA) and about USD 230 billion of assets managed by the Public Investment Fund (PIF).
The vision offers the private sector the opportunity to participate in the financing and management of facilities and services. It also aims to increase the value of the PIF assets to about USD 1.9 trillion. In this respect, the vision adopts several mechanisms, including to float around 5 percent of Aramco in an initial public offering (IPO). Besides, the kingdom’s vision is to increase non-oil government revenues from USD 43.5 billion to USD 267 billion a year, and attract more foreign direct investment to help raise the proportion of such investments in the GDP from 3.8% to the 5.7%, the global rate.
Pillars of NEOM Project
Saudi Arabia espouses a string of mega-development projects, several of which have been announced over the past period, the largest of which so far is NEOM. It is located on an area of about 26.5 thousand square kilometers, situated in an area that enables the Kingdom to cooperate with both Egypt and Jordan. The project overlooks 460 km of coastline of on the Gulf of Aqaba and the Red Sea, where 10 percent of world trade goes through. In addition, an average of 70% of the world’s population can reach the project in the span of 8 hours only.
This giant project includes several sub-projects distributed to various economic sectors, particularly renewable energy, technology, tourism, industry, food security, transport and logistics services.
With these advantages, NEOM epitomizes the Saudi Vision 2030 and the grand ambitions it seeks to realize, at a time full of geopolitical challenges at the regional level. This is in addition to the various economic challenges facing the world now, on top of them the unusual decline in oil prices, which reflects that a fundamental change is taking place in the world oil markets. This shift in the oil prices will radically alter the face of markets and heralds a new future for oil economies, including the Saudi economy.
The Saudi economy has relied on oil resources as a major source of income in the past years, with oil revenues accounting for more than four fifths of its public revenues.
In conclusion, the major development projects being pursued by Saudi Arabia, as part of its vision 2030, need substantial funding and may face some challenges. However, the expected challenges appear to be manageable considering the great economic potentials of the Kingdom. That is due to its strong drive to overhaul its economy beyond post-oil stage, desire to thrust the Saudi economy to a new position to be more balanced, enabling it to evade the negative repercussions of any future problems or crises, including those associated with oil and energy markets in general.Saudi Arabia’s mega vision for its tourism industry is thoroughly embodied by way of two large-scale developments along its Red Sea coast. You may read more here.
