The developments come with a futuristic city-state called Neom in the remote northwestern province of Tabuk, a sports and outdoor entertainment town in Riyadh, luxury resorts spread over an archipelago of pristine Red Sea islands and an ancient Arab trading post remodeled into a wildlife reserve called al-Ula.
All of them are components of Crown Prince Mohammed bin Salman’s plan to diversify the economy away from oil by attracting foreign investment and boosting domestic consumption. Giant projects are designed to generate industries such as tourism and entertainment that did not exist in the past in cloistered Saudi Arabia. , even when these sectors suffer globally from social estating directives imposed to curb the spread of the virus.
“It looks like it’s going to be a genuine battle,” said Robert Mogielnicki, a resident researcher in the Gulf Arab States Institute’s expert group in Washington, D. C. Until now, he said: “The broader purpose of attracting global multinational companies. . . t panic. “
After introducing tourist visas last September, the kingdom issued about a portion of a million before the pandemic hit and closed its borders, adding its main major source of tourist revenue: devoted visitors.
Despite the recession, the government says it remains committed to attracting one hundred million visits a year until 2030, compared to last year’s 40 million.
Hosam Alqurashi, marketing director of the Royal Commission for the City of Riyadh, which oversees $800 billion plans to double the capital’s population in a decade, said the kingdom’s rulers saw the quarantine era as an opportunity to accelerate certain projects.
“Overall, the crown prince’s direction was to push and move as fast as you can imagine and as hard as you can imagine with the projects, with no delays at all,” Alqurashi said at an act of the U. S. Chamber of Commerce last month in statements. The country is determined, our projects are pretty well on track and nothing will delay them. “
At the end of the day, dozens of highly paid executives, foreign citizens who fulfilled assignments in Saudi Arabia and who were stranded after the country banned foreign arrivals to fight the virus, were taken back on chartered aircraft. in prefabricated huts at the mapping sites, where the floor is still being leveled.
“They were told: either you’re here or you don’t have a job,” said an ex-leader of one of the projects, who said he had spoken to the staff taking the flights.
Prince Mohammed is in a hurry. As the world shifts away from hydrocarbons, its isolated, oil-dependent kingdom faces more serious economic perils unless it adapts. The International Monetary Fund expects a general contraction of 6. 8% this year.
Before the coronavirus, Saudi Arabia was already struggling to attract the foreign investment needed to modernize its economy. The 2018 killing of dissident journalist Jamal Khashoggi via Saudi agents sparked global outrage and prompted some would-be investors, such as Richard Branson, to suspend conversations with the kingdom, other agreements have been reached.
The Central Intelligence Agency and many Western governments concluded that Prince Mohammed had ordered Mohammed’s assassination. Khashoggi, the Saudi consulate in Istanbul, a statement he denies.
With a budget deficit expected to reach about 13% of production this year, above the International Monetary Fund’s benchmarks for emerging countries, Saudi Arabia’s finances are under pressure. The government has already tripled the value-added tax rate to fill government coffers. and reduce money distributions to offset the emerging cost of living.
With nearly $450 billion in foreign financial reserves and the world’s second-largest oil reserves, Saudi Arabia will soon run out of cash. The kingdom’s nearly $300 billion sovereign fund, the Public Investment Fund, led by Prince Mohammed’s largest projects; He recently won a $40 billion injection from the central bank.
One representative stated that the IDP’s monetary commitment to uns superseded allocations and that its opportunity would not be particularly affected by existing economic conditions. Since the beginning of the pandemic, PIF has awarded a number of contracts, the most recently to the U. S. allocation control company. , Bechtel, to expand the infrastructure in Neom, which currently has only a few royal palaces and employee camps.
When the pandemic began, many of the paintings expected in the projects would slow down, especially as a series of “economic cities” announced under the previous king failed more frequently.
Washington-based researcher Mogielnicki said Saudi Arabia’s economic transformation would be costly and require a compromise point that would be politically costly to retract. “At this point, it would be difficult for lawmakers to cross hands and say, “This was not the case. the right decision, and it no longer makes sense. “
Projects may eventually move to attract more investment and domestic consumption. This has already to happen in at least one of the developments, Neom, when the most sensitive Western leaders were replaced by the Saudis. On Sunday, Neom announced an agreement with the Saudi Arabian force ministry to cooperate on renewable energy, power generation and synthetic intelligence.
The projects are so big that PIF calls them gigaprojects. Neom, costing an estimated $ 500 billion and equipped with experimental technologies like a solar dome for water desalination, will be 33 times larger than New York’s. which aims to build Maldivian-style hotels towering over the water, it will be the length of Belgium. bigger than Disney World.
Prices for other projects across the country have been revealed, as well as a wellness complex and marina called the Middle East Riviera, but are estimated at billions of dollars each.
“Further progress in implementing these projects is vital to ensure that they are in a position to gain advantages from the post-pandemic global economic recovery,” said Saudi economist Fadhel Albuainain, who under pressure that other countries are now considering primary infrastructure projects to revive their stagnant economies.
In the desert on the outskirts of Riyadh, the scale of Saudi Arabia’s ambitions is evident at the Qiddiya site, where an 18-hole golf course and equestrian services are planned, as well as hotels, department stores and entertainment venues until 2023.
Dust explodes in the air when pneumatic hammers ruin the hills of limestone on rock that is then poured to fill giant chasms on a 150-foot-tall cliff. Construction cars point to the plateau below which a race track and water park will be built.
The earth movements here when the pandemic occurred. In reaction to the virus, which has so far sickened more than 309,000 people in the kingdom and killed another 3,722, the government imposed severe restrictions on public activity until June.
While the maximum Saudi workforce was stranded in their homes, some 500 foreign employees continued to flatten land, move high-voltage power poles and install water pipes. Their ranks are expected to quadruple with the start of roadworks.
Michael Reininger, managing director of Qiddiya, an American who worked on the progression of Walt Disney Co. resorts, said the existing economic scenario does not involve long-term plans or strategies, with more than $260 million in contracts awarded since February. “Qiddiya has proudly supported a ‘business as usual’ technique over the past few months,” he said via email, “work is progressing normally. “
“Rory Jones and Summer Said in Dubai contributed to this article.
Write to Stephen Kalin in stephen. kalin@wsj. com
Click here to read that Mint ePapermint is now on Telegram. Join the mint channel in your telegram and updated
Log in to our to save your favorites. It’ll only take a moment.
Your query has expired, reconnect.
You are now subscribed to our newsletters. If you can’t find any email from us, check your spam folder.