Alex Nyikos recently completed a Masters in Global Affairs at the University of Toronto.
Recently, following a wave of arrests, 32-year-old Saudi Crown Prince Mohammed bin Salman revealed the political lengths he's willing to go to consolidate power in Saudi Arabia. Just two weeks ago, he exposed the practical realities he will face when he becomes king by announcing plans to develop a $500-billion megacity in the northwestern corner of the kingdom.
Neom – an amalgam of Neo and Mustaqbal, the Arabic word for future – would be built somewhere on a piece of land 30 times larger than Manhattan. It would connect to Egypt by way of a bridge across the Gulf of Aqaba and with nearby Jordan. Neom would promise a high-tech, robotics-centred version of "Dubai on the Red Sea," powered entirely by renewable energy, which would account for $100-billion in economic output by 2030.
Coincidentally, the announcement came close to marking another anniversary in Saudi Arabia's long history of megaprojects. In November, 1976, Mohammed al-Faisal – a 41-year-old nephew of the then-king – laid out plans to meet the desert kingdom's dire water needs by towing icebergs to its coast from Antarctica. Each 10,000-kilometre-long trip would have taken six months at a cost of about $100-million. Although it was, somehow, seriously considered for a time, the project was never implemented; the kingdom turned instead to desalination technology.
Aside from sating the thirst of a growing population, Mr. al-Faisal envisaged the ice providing much-needed water for another Saudi vision of the late 1970s: Growing wheat in one of the world's most arid environments. For a time, this project met with much greater success. By the early 1990s, the kingdom produced enough wheat to become an exporter. Eventually, the costs of paying a $933.50-per-ton subsidy to farmers and of severe aquifer depletion became difficult to justify. From being the world's sixth-largest producer in the 1990s, Saudi Arabia announced the end of its costly wheat experiment in 2008; it quietly died for good in 2016.
Neom is a direct descendant of these visions. As argued by Toby Craig Jones, the Saudi state has consistently relied on modernization and mastery over nature – especially over water and oil resources, and often through vast engineering projects – as a central tenet of its ruling bargain. Northern Hejaz, where Neom would be built, is devoid of both water and oil. How it would thrive in a country that already strains to meet the needs of the rapidly growing megacities of Riyadh, Jeddah, Mecca, and Dammam, is unclear.
Equally dubious is the ability of the Saudi state to deliver on Neom's economic promise. At a time when it is facing severe budgetary strains as a result of the twin pressures of low oil prices and the fact that nearly two-thirds of Saudi nationals are employed and generously compensated by the government, Saudi Arabia will need to mobilize huge amounts of resources to realize its plan. Meanwhile, the state's other major economic goal – the privatization of Saudi Aramco, the world's largest oil company – has been mired in confusion and meddling by officials, and its planned IPO has failed to live up to expectations.
Among other things, Neom's glossy promotional video imagines a city that is culturally isolated from Saudi Arabia, especially with regard to women's rights and freedoms. It is difficult to imagine how the Saudi state would reconcile this vision with the worldview of its extremely conservative clerical establishment, especially in light of other social changes including the long-overdue decision to allow women to drive and Prince Mohammed's recently stated desire to moderate his kingdom's religious practices.
Past attempts at social reform and religious moderation have resulted in powerful backlashes against the state, most notably the temporary seizure of the Grand Mosque in Mecca – Islam's holiest site – by armed extremists in 1979. Since then, the Saudi state has satisfied the demands of the Wahabi clerical establishment in part by turning a blind eye to, or even co-opting, the involvement of Saudi nationals and resources in extremist groups outside the kingdom. How ready would the powerful clerical wing of Saudi society, or many conservative Saudis for that matter, be to embrace a permissive "Dubai on the Red Sea"?
Saudi Arabia has a very young population – nearly half its citizens are under the age of 30 – and it is aggressively seeking to diversify its economy away from oil, albeit with mixed results so far. From this perspective, it is truly encouraging that the state is actively investing in clean technology, AI and a host of other innovative fields.
However, developing a massive, purpose-built city where very little human settlement has ever existed will only distract from this mission. Moreover, while Prince Mohammed may have further consolidated his position following the arrest of high-profile members of the royal family over the weekend, his increasing power is unlikely to enable him to deliver on such a massive undertaking. A more effective innovation strategy might seek to emulate elements of that adopted by the nearby United Arab Emirates, which is focusing on coding skills, smart government and growth in AI. This approach arguably has a much better chance of succeeding and could enable the Saudi state to capitalize on its youthful population.
As a project, Neom will likely meet the fate of its predecessors. The Saudi state – and the Crown Prince – cannot afford to allow the rest of its diversification and innovation agenda to go down that path along with it.