Neom — New Future or Old Vanity?

Saudi Arabia’s futuristic city, and flagship project of Saudi Arabia’s Crown Prince Mohammed bin Salman Al-Saud, Neom — a portmanteau of the Greek word ‘Neo’ for new and the ‘M’ representing the Arabic word Mostaqbal for future — has raised eyebrows around the world. While some tout its bold, innovative vision, others question its feasibility and point to the issues surrounding the project as a whole.

 

Even calling it a ‘city’ might generate the wrong image in people’s mind: Neom will be constructed in a line stretching 170 km, consisting of a collection of smaller, walkable nodes connected by subterranean infrastructure. The city will be car- and street-free, powered by 100% renewable energy, hosting the world’s largest green hydrogen plan and feature a sophisticated and broad cybernetic network with facial recognition and vast data collection to automate a number of processes for inhabitants. Neom will also feature a novel system for water desalination, consisting of domes that will gather solar energy and use it to evaporate sea water, a carbon-neutral process[i]; In a region heavily and increasingly dependent on desalination, carbon-neutral innovation is a point of pride. Some proposed features like flying drone taxis and holographic teachers sound a little outlandish, but the main contours of sustainability and intensive technology usage are more feasible, and more important, than the more flashy details. Neom certainly promises a new future for Saudi Arabia, aligned with its goals for diversifying the economy and attracting foreign investment and interest as reflected in its 2030 project.

 

Situated along the Gulf of Aqaba, Neom has a milder climate than the rest of the country, and efforts to make it appealing to tourists and foreign professionals do not end there. Neom will be ‘independent of the Kingdom’s existing governmental framework,’[ii] and apart from fostering a business-friendly environment, this may also mean loosening societal and moral restrictions that might otherwise turn off the visitors and foreign professionals Neom is trying to attract.

 

Criticism and the Promise of Neom

Criticism of Neom comes from several perspectives. For instance fears over the treatment of members of the Huwaitat tribe have been raised since some of them are being relocated to make way for the project.[iii] There are also concerns about data harvesting and surveillance, both in general terms and in the Saudi context in particular.[iv] Simultaneously, Neom has been labelled as a “vanity project” since its inception. There is some evidence from the past to justify this view — examples of issues with mega-projects in the Gulf states are not hard to find. Consider, for example, the King Abdullah Financial District in Riyadh, announced in 2006 and subsequently becoming mired in repeated delays and cost overruns. Across the border in the United Arab Emirates (UAE), al-Masdar, another futuristic green city packed with technology, has yet to live up to its potential.[v] However, there are good reasons to believe that Neom is fundamentally different.

 

Despite the budget cuts for other projects in recent years and the falling profits of the state-owned oil giant, Aramco, due to COVID-19, work on Neom presses ahead.[vi] The project is important to the Crown Prince domestically, embodying the Kingdom’s Vision 2030 framework for reform and modernisation. It also promises to create 380,000 jobs—welcome news to alleviate the high unemployment rate in the country, totalling 12.6% at the end of 2020.[vii]

 

Neom is also diplomatically significant; the area is slated to be the Saudi side of the proposed King Salman bridge, connecting Egypt and Saudi Arabia across the Straits of Tiran.[viii] The bridge would need Israeli approval to guarantee free shipping and some commentators have gone as far as to say that ‘Neom cannot flourish if a deal with Israel does not take place.’[ix] Indeed, Neom was the site of an alleged meeting between the Crown Prince and Israel’s Prime Minister Benjamin Netanyahu.[x]

 

Neom also embodies Saudi Arabia’s quest for rapid economic change. Riyadh announced in February 2021 that it would exclude companies without a regional headquarters in the Kingdom from government contracts, starting 2024.[xi] However, this measure might instigate economic competition with the UAE, which has been the traditional home base for companies operating in the Gulf, with Dubai hosting scores of regional offices for multinational firms. Both countries have ambitious plans for diversifying their economies and attracting foreign investment, and no less ambitious projects to back them up. It remains to be seen to what extent these parallel pursuits will be zero-sum, and whether protectionist measures like this Saudi requirement will cause tensions.

 

Finally, there is the more abstract, speculative question of Saudi Arabia’s long-term future. With every climate summit, every technological breakthrough and policy proposal, the power and importance of oil slowly wanes and a new energy landscape heaves into view. And this change will not be the only one: the usage of Artificial Intelligence and the Internet of Things, the way cities are designed and managed, remain open questions. Being the pioneers, attracting the talent and enthusiasm of people on the cutting edge of these developments, might be just the transformation Saudi Arabia needs.

 

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Neom is much more than a vanity project. The concerns about the displacement of people along the Line are valid, and general anxiety around data collection and surveillance is understandable, but Neom should not be dismissed as a mere flight of fancy. It has all the prestige, cost and ambition of one, but it is also a centrepiece of Mohammed bin Salman’s conception of a future Saudi Arabia, a bridge to its neighbours — both diplomatically and perhaps literally — and a laboratory for testing a number of smart city concepts. The project sits at a confluence of factors that give it a realistic chance to succeed where other ambitious projects have fizzled out.

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22 April 2021

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References

[i] Anup Oommen, ‘NEOM inks deal to construct first 'solar dome' tech desalination plant,’ Construction Week Online, 2 February 2020, https://www.constructionweekonline.com/projects-and-tenders/262400-neom-inks-deal-to-construct-first-desalination-plant-with-solar-dome.

[ii] Public Investment Fund, ‘Media Center,’ 23 October 2017 https://www.pif.gov.sa/en/MediaCenter/Pages/NewsDetails.aspx?NewsID=31.

[iii] Ruth Michaelson, ‘It’s being built on our blood’: the true cost of Saudi Arabia’s $500bn megacity,’ The Guardian, 4 May 2020, https://www.theguardian.com/global-development/2020/may/04/its-being-built-on-our-blood-the-true-cost-of-saudi-arabia-5bn-mega-city-neom.

[iv] Amnesty International, ‘Assessment of Human Rights Risks in Saudi Arabia for Businesses and Investors,’ Amnesty International Public Statement, 9 November 2020, https://www.amnesty.org/download/Documents/MDE2333212020ENGLISH.PDF.

[v] Suzanne Goldenberg, ‘Masdar's zero-carbon dream could become world’s first green ghost town,’ The Guardian, 16 February 2016, https://www.theguardian.com/environment/2016/feb/16/masdars-zero-carbon-dream-could-become-worlds-first-green-ghost-town.

[vi] Reuters, ‘Saudi government could cancel $13.3bn projects in 2017,’ Gulf Business, 18 January 2017, https://gulfbusiness.com/saudi-government-cancel-13-3bn-projects-2017/; AP News, ‘Oil giant Saudi Aramco sees 2020 profits drop to $49 billion,’ The Independent, 21 March 2021, https://www.independent.co.uk/news/oil-giant-saudi-aramco-sees-2020-profits-drop-to-49-billion-saudi-aramco-dubai-united-arab-emirates-mohammed-bin-salman-saudi-arabia-b1820152.html.

[vii] Aziz El Yaakoubi, Marwa Rashad, ‘Saudi Crown Prince launches zero-carbon city in NEOM business zone,’ Reuters, 10 January 2021, https://www.reuters.com/article/us-saudi-neom-project-idUKKBN29F0L8; General Authority for Statistics of the Kingdom of Saudi Arabia, ‘Labor market statistics Q4, 2020,’ https://www.stats.gov.sa/sites/default/files/LM_Q4%202020%20%28Press%20release_EN%29_1.pdf.

[viii] Public Investment Fund, ‘Media Center,’ 23 October 2017, https://www.pif.gov.sa/en/MediaCenter/Pages/NewsDetails.aspx?NewsID=31.

[ix] Ali Dogan, ‘Saudi Arabia’s Neom Diplomacy,’ Carnegie Endowment for International Peace, 3 March 2021, https://carnegieendowment.org/sada/83975.

[x] Natan Sachs, Tamara Cofman Wittes, ‘Saudi-Israeli relations: The curious case of a NEOM meeting denied,’ Brookings Institution, 25 November 2020, https://www.brookings.edu/blog/order-from-chaos/2020/11/25/saudi-israeli-relations-the-curious-case-of-a-neom-meeting-denied/.

[xi] Natasha Turak, ‘Dramatic and risky’ — and a shot at Dubai? Saudi Arabia issues bold business ultimatum to pull regional HQ offices into the kingdom,’ CNBC, 16 February 2021, https://www.cnbc.com/2021/02/16/targeting-dubai-saudi-arabias-ultimatum-to-pull-hq-offices-to-kingdom.html.