News Updates

NEOM and the future of our youth

RECENTLY, Crown Prince Muhammad Bin Salman, deputy premier and minister of defense, announced the launch of NEOM, a project that aspires to be the “safest, most efficient, most future-oriented, and best place to live and work” in the Kingdom. NEOM’s land mass will extend across the Egyptian and Jordanian borders, rendering NEOM the first private zone to span three countries.

The project will be backed by more than $500 billion over the coming years by Saudi Arabia. Wind and solar power will allow NEOM to be powered solely by regenerative energy, while 70 percent of the world’s population will be able to reach it within eight hours. This was reported in the local dailies, following its launch at the recent Future Investment Initiative Forum in Riyadh.

The news continued, “It is to be situated on one of the world’s most prominent economic arteries, through which nearly a tenth of the world’s trade flows. Its strategic location will also facilitate the zone’s rapid emergence as a global hub that connects Asia, Europe and Africa, enabling 70% of the world’s population to reach it in under eight hours, which brings the potential to combine the best of major global regions in terms of knowledge, technology, research, teaching, learning, living and working.”

As the name of the forum suggests, it is indeed a vision for the future. As pledged by the dynamic Crown Prince to reinvigorate the economy by investing in the future, he is doing just that. Investing in Saudi youth. His vision encompasses the harnessing of the global technological and financial trends with the drive and skills of the Saudi youth.

As has been Crown Prince Muhammad’s refrain from the start, Saudi economy has to be diversified. Though focus would be still on oil-generated revenues, without the total reliance on it. That’s why he in his vision has identified the areas of potential, which could add to the growing Saudi economy. And rightly he has aimed at skills development along with self-driven business entrepreneurship.

The ambitious project, NEOM, will secure thousands of jobs for Saudis. The vision of the Crown Prince of transforming the Saudi economy from an economy that is totally dependent on oil into an economy based on knowledge and investment is turning into a reality, which is part of Vision 2030. The vision will also transform the Saudi manpower into a knowledge- driven and scientifically productive group, which stays updated with information.

The traditional Saudi government employee, who has been a clock-watcher and heavily dependent on paperwork and has been a bystander in the growing technological revolution will not survive is such a city, which will be run by meritocracy and people with specialized skill sets.

For such a crop of skilled youth, Saudi Arabia also requires to revamp the education system. It needs to completely change its curriculum with more stress on sciences, and develop methods and ways that would motivate and encourage the Saudi youth to be more innovative. What most importantly is to change is the mindset of our youth to stay away from boring routine jobs behind dusty desks doing repetitive jobs with an eye on their salaries at the end of the month.

It is high time to look at the greater good that would be derived by these actions in order to benefit the country with more innovation and production. We need to teach our youth how to develop their abilities to be more productive keeping in mind that the city will take only the highly skilled and innovative people. Those who cannot develop their skills and knowledge will be left behind.

All services and processes in NEOM will be 100% fully automated, with the goal of becoming the most efficient destination in the world, and in turn be implemented on all activities such as legal, government, and investment procedures among others. Additionally, NEOM will be subject to the highest sustainability standards, and will provide all transactions, procedures, and claims through paperless and electronic means.

Saudi Arabia is witnessing a major transformation and Tabuk region is in the center of all the attention now. Residents in Tabuk are fortunate now that this huge project will take place in their area. In the past, three major cities had been the center attention when it came to job opportunity, starting with Riyadh on the top being the capital, followed by Dammam in the eastern province and then Jeddah. Few years from now, the top brains in the world will focus their attention in NEOM in the Tabuk region. The region will be attractive to dreamers who want to make a difference.

Crown Prince Muhammad is betting on the Saudi youth for making the project successful. We are confident that it will succeed. His speech, like the many before, was full of surprises and good news and it also sketched a road map for the Saudi economy for the years to come

The writer can be reached at mahmad@saudigazette.com.sa Twitter: @anajeddawi_eng

Source: http://saudigazette.com.sa/article/520537/Opinion/OP-ED/NEOM-and-the-future-of-our-youth

Mahmoud-Ahmad

Saudi Crown Prince: BlackRock, Blackstone to open offices in Saudi Arabia

Fund manager BlackRock Inc and private equity firm Blackstone Group are planning to open offices in Saudi Arabia, encouraged by the investment opportunities offered by the kingdom, Crown Prince Mohammed bin Salman told Reuters.

His comments come as the Public Investment Fund (PIF), the country’s main sovereign wealth fund, is putting $20 billion into a $40-billion fund with Blackstone and unveiled plans to significantly boost its assets.

“PIF is setting a new role in the investment world,” Prince Mohammed said in an interview.

He said the fund would make money from both its recent joint investments with Japan’s SoftBank Group (9984.T) and with Blackstone.

“That’s why we made a 20 percent profit with SoftBank in five months. That‘s why we established a … fund in Blackstone, which is expected to make a 14 percent profit and create different fields and different investments. That’s why Blackstone and BlackRock are opening here,” he said.

A spokeswoman for BlackRock, the world biggest fund manager, said that it intends to “open an office in the region to ensure we deliver the best service to our clients”.

Blackstone declined to comment.

Wall Street banks and Western fund managers are expanding in Saudi Arabia, lured by the multi-billion dollar privatization program and opening up of the kingdom’s financial markets to foreign investors.

The sale of around 5 percent of state oil giant Saudi Aramco next year is a centerpiece of Vision 2030, an ambitious reform plan championed by Prince Mohammed to diversify the Saudi economy beyond oil.

The sovereign fund PIF wants to increase its financial clout to 1.5 trillion riyal ($400 billion) by 2020 as part of the kingdom’s efforts to boost private-sector growth and wean itself off oil exports.

Source: http://english.alarabiya.net/en/business/banking-and-finance/2017/10/28/Saudi-Crown-Prince-BlackRock-Blackstone-to-open-offices-in-Saudi-Arabia-.html

Could Saudi Arabia be the next Dubai? – BBC Newsnight (Video)

Source: http://hisword.co.za/opinion/could-saudi-arabia-be-the-next-dubai-bbc-newsnight/

New Saudi mega-city will be listed publicly, crown prince says

The US$500 billion (S$684.5 billion) mega-city planned by Saudi Arabia will be floated on financial markets alongside oil giant Saudi Aramco as part of the kingdom’s drive to diversify away from oil, the crown prince told Reuters in an interview late on Wednesday.

Crown Prince Mohammed bin Salman also said Aramco’s initial public offering is on track for next year and the national oil giant could be valued at more than $2 trillion – a sum some investors have said appears unrealistically high.

His surprise announcement about the listing of NEOM, a 26,500-square km (10,230-square mile) zone that will extend into Jordan and Egypt, is the latest and most extraordinary in a slate of privatization programme led by the floating of Aramco.

The futuristic high tech hub looks set to become a flagship of reforms championed by Prince Mohammed to create jobs, encourage entrepreneurs and permit new freedoms among Saudis steeped in religious puritanism and dependence on the state.

“The first capitalist city in the world … this is the unique thing that will be revolutionary,” said Prince Mohammed, heir to the throne of the largest Arab economy, an absolute monarchy.

“Without a doubt, at the end of the day NEOM will be floated in the markets. The first zone floated in the public markets. It’s as if you float the city of New York.”

The 32-year-old spoke on the sidelines of the Future Investment Initiative conference, which has attracted nearly 4,000 delegates from around the world to Riyadh this week.

On Aramco’s IPO, he said: “We are on track in 2018… but the listing (details) are still under discussion … It will be IPO-ed in 2018.”

Switching between English and Arabic, sometimes in the same sentence, the prince seemed most excited discussing his plans for the new city.

FOCUS ON GROWTH

Adjacent to the Red Sea and the Gulf of Aqaba and near maritime trade routes that use the Suez Canal, the zone will serve as a gateway to the proposed King Salman Bridge, which will link Egypt and Saudi Arabia.

NEOM will be fully owned by Saudi Arabia’s sovereign Public Investment Fund (PIF) until its listing, and will attract investments from companies in renewable energy, biotechnology, advanced manufacturing and entertainment, the PIF has said.

“It won’t be listed in the markets until the idea is mature enough,” Prince Mohammed said. “It might be after 2030, it might be before, but the idea and the strategy is to float it eventually.”
The new city will not follow the rules and regulations enforced in the rest of Saudi Arabia, which imposes sharia law based on a strict Wahhabi interpretation of Islam.

It will offer residents a more liberal lifestyle, allowing musical concerts and entertainment in a remote corner of the desert kingdom. Saudi Arabia has already started to relax some long-standing rules, including what was an effective ban on women driving.

Prince Mohammed said the name mixed “neo”, meaning new, with M, the first letter of the Arabic word for future.

The new city is part of the crown prince’s ambitious Vision 2030 plan to overhaul the economy of Saudi Arabia, OPEC’s largest producer, and provide jobs for an overwhelmingly young population in the face of a global oil price decline since 2014.

Prince Mohammed has portrayed the reforms as a matter of economic survival, but one challenge for the ruling Al Saud family has been to secure the acquiescence of traditionalist clerics upon whose support the family relies for legitimacy.

Some clergy suspect the bold initiatives conceived by the prince in leisure and tourism presage sweeping reforms in education, a bastion of conservatism where clerical control is believed by Western critics to have encouraged Islamist radicals not just in Saudi Arabia but across the Muslim and Arab worlds.

But the prince has pushed ahead, confident he has the backing of most young Saudis, who make up the bulk of the population.

“I do think there is a desire within significant parts of Saudi society to move away from rigid, old-school Wahhabi control of social behaviour and the public sphere,” said Steffen Hertog of the London School of Economics.”So I don’t think the Crown Prince’s statements are just for show. He genuinely wants to harness these sentiments and has undertaken very significant steps, including allowing women to drive and severely curtailing the powers of the religious police.”

Economic growth has slowed and the economy may shrink this year as the government introduces austerity measures.

“The idea is not to restructure the economy as much as to seize the opportunities available that we didn’t address before. We have high capacity and we use only a little,” Prince Mohammed said.

He became next in line for the throne in June after the king, his father, removed a more senior prince from the succession. He has pledged to transform Saudi Arabia economically and socially.

“Vision 2030 is about a lot of big opportunities, so Aramco is one of them, NEOM another opportunity…We have a lot of huge projects we will announce in the next few years.”

He said PIF would generate higher returns than other big investment funds.

QATAR AND YEMEN

Prince Mohammed also said Saudi Arabia’s dispute with neighbouring Qatar had not affected investment.

“Qatar is a very, very, very small issue,” he said.

Saudi Arabia and three Arab allies cut diplomatic and transport ties with Qatar earlier this year over accusations that Doha supported Islamist “terrorists”. Qatar denies the allegations.

Prince Mohammed said the kingdom’s war in Yemen would continue in order to prevent the armed Houthi movement from turning into another “Hezbollah” on Saudi Arabia’s southern border.

“We’re pursuing until we can be sure that nothing will happen there like Hezbollah again, because Yemen is more dangerous than Lebanon,” he said.

Hezbollah, armed and backed by Iran, has become a formidable force in Lebanon and Syria. The Houthis also reportedly receive arms and training from Iran, Riyadh’s arch-rival.

Yemen’s location is crucial, said Prince Mohammed. “It’s next to Bab al-Mandab so if something happens there, that means 10 per cent of world trade stops,” he added, referring to the strait at the southern end of the Red Sea.

“This is the crisis.”

Source: http://www.asiaone.com/business/new-saudi-mega-city-will-be-listed-publicly-crown-prince-says

Mohammad Bin Salman Bin Abdul Aziz: Firmly in the driver’s seat

Over the past week, Mohammad Bin Salman Bin Abdul Aziz, the Crown Prince of Saudi Arabia, has laid out a progressive and futuristic vision of how he believes the kingdom will evolve economically, socially and technically.

It’s a daring plan, one that envisages a huge business and economic zone, extending into Jordan and Egypt, based on $500 billion (Dh1.83 trillion) investment in infrastructure and technology. It also falls into the scale of changes outlined by the 32-year-old heir to the Saudi throne in his Vision 2030, released in April 2016.

As well as detailing the economic project, Crown Prince Mohammad, last week, also laid out his determination to change the nature of Saudi society, reforming it, and returning it to a path of religious and social moderation. Indeed, in Saudi Arabia, it’s rare for a political leader to be so transparent in addressing that nation’s social, economic and political standing.

A little more than a month ago, at the urging of the crown prince, Saudi Arabian women were given the right to drive — a right that changes fundamentally the relationship in society and the family unit. If that in itself is the sole change, it would represent a shift in thinking that is a rare reform in Saudi society.

It is not.

Tentative first steps are also being taken, as Gulf News reported last Sunday, for the nation to move to permitting cinemas, and the movie theatres will soon be permitted as part of ambitious reforms for a post-oil era that will shake up the austere kingdom’s cultural scene. Reviving cinemas would represent another paradigm shift in Saudi Arabia, which is promoting entertainment as part of Crown Prince Mohammad’s Vision 2030.

The reform bus

Yes, the social reforms are opposed by conservatives, who view cinemas and women behind the wheel as a threat to the cultural and religious identity that has hardened since the 1980s. So far, the authorities seem to be shrugging off the threat, with some comparing Saudi Arabia’s reform drive to a fast-moving bus — either people get on board or risk being left behind. And right now, that reform bus is being driven by Crown Prince Mohammad. In a series of interviews last week, Crown Prince Mohammad made it clear that he intended to return the kingdom to the path of “moderate Islam” and was seeking global support to transform his nation into an open society that empowers citizens and lures investors. “We are a G20 country,” he told the Guardian. “One of the biggest world economies. We’re in the middle of three continents. Changing Saudi Arabia for the better means helping the region and changing the world. So, this is what we’re trying to do here. And we hope to get support from everyone,” he added.

Few outside Saudi Arabia had heard of Prince Mohammad before his father became king in January 2015. Since then, he has been elevated to the position of Crown Prince, replacing his cousin, Prince Mohammad Bin Nayef. Crown Prince Mohammad was born on August 31, 1985, and is the eldest son of Salman Bin Abdul Aziz and Princess Fahdah Bint Falah Bin Sultan. He gained a Bachelor’s degree in law from King Saud University in Riyadh, and was appointed special adviser to his father in 2009, who was then serving as the governor of Riyadh.

A pivotal role

Crown Prince Mohammad was appointed Defence Minister and was a driving force behind organising the international coalition of Arab nations that is acting on United Nations Security Council resolutions — and in which the UAE is proud to be playing a pivotal role — to restore that legitimate government of President Abd Rabbo Mansour Hadi in Yemen, after it was overthrown by Iranian-backed and armed Al Houthi rebels.

Those who have met Crown Prince Mohammad say he insists Saudi Arabia must be more assertive in shaping events in the Middle East and confronting Iran’s influence and interference in the region — whether in Yemen, Syria, Iraq or Lebanon.

Brian Katulis, a Middle East expert at Washington’s Centre for American Progress, who had met him in Riyadh earlier this year, told the New York Times: “His main message is that Saudi Arabia is a force to be reckoned with.”

Indeed, it’s a point Crown Prince Mohammad reiterated last week in explaining the need for economic and societal change. “What happened in the last 30 years is not Saudi Arabia,” he told the Guardian. “What happened in the region in the last 30 years is not the Middle East. After the Iranian revolution in 1979, people wanted to copy this model in different countries, one of them is Saudi Arabia. We didn’t know how to deal with it. And the problem spread all over the world. Now is the time to get rid of it.”

Combating extremist thoughts

For the crown prince, part of the solution is embracing moderate Islam. “We are simply reverting to what we followed — a moderate Islam open to the world and all religions. Seventy per cent of the Saudis are younger than 30. Honestly, we won’t waste 30 years of our life combating extremist thoughts, we will destroy them now and immediately.”

This desire for real change, combined with his Vision 2030, represents a fundamental shift in thinking — and action. Vision 2030 aims to reduce the kingdom’s dependence on oil, diversify its economy, develop public service sectors such as health, education, infrastructure, recreation and tourism — as well as cutting a generous system of subsidies — and the partial privatisation of the state oil company, Saudi Aramco.

Official Saudi development plans for decades have called for reducing the dependence on oil and increasing Saudification in the workforce to little effect. But the need now is greater than ever — oil is half the price it was in 2014 and hundreds of thousands of young Saudis are entering the job market.

The crown prince has called for a new era of fiscal responsibility and fuel, water and electricity prices have increased while public-sector salaries have been restrained and reduced. By next year, Crown Prince Mohammad says, Saudi Aramco will be ready for an initial public offering — a move that could value the company at more than $2 trillion. The sale of around 5 per cent of the company will mark a significant milestone in the 15-year drive towards Vision 2030. Crown Prince Mohammad is firmly in the driver’s seat.

Source: http://gulfnews.com/opinion/thinkers/mohammad-bin-salman-bin-abdul-aziz-firmly-in-the-driver-s-seat-1.2114057

Saudi Arabia to Invest $1 Billion in Virgin Galactic to Advance Space Travel Projects

INVESTING IN THE FUTURE: SAUDI ARABIA

Saudi Arabia and the Virgin Group have announced a partnership in which the former intends to invest $1 billion in Virgin Galactic, as well as its side companies, The Spaceship Company and Virgin Orbit.

The Public Investment Fund (PIF) of Saudi Arabia and Virgin Group signed a non-binding Memorandum of Understanding (MoU) this week, which also includes the option to invest an additional $480 million. As explained by Virgin founder Richard Branson in a blog post, the deal still needs to be approved by the U.S. government, but it’s a clear sign of Saudi Arabia’s commitment to innovative technology and its Saudi Vision 2030 initiative, in which the country plans to move away from oil and towards a more modern, diversified economy.

“This partnership with Virgin Group reflects the great strides the Kingdom is making towards our vision for a diversified, knowledge-based economy,” said Crown Prince Mohammad bin Salman Al-Saud in a statement. “The future of Saudi Arabia is one of innovation, as showcased at this week’s Future Investment Initiative, and it’s through partnerships with organizations like Virgin Group that we will make active contributions to those sectors and technologies that are driving progress on a global scale.”

ADVANCING DEVELOPMENT

Virgin will continue to develop its VSS Unity spacecraft, which is expected to carry astronauts into space within the next four months; commercial space tourisms flights could begin as early as next year. Virgin Orbit, meanwhile, is gearing up to launch satellites into Earth’s orbit. Going forward, Virgin’s companies will use Saudi Arabia’s investment to create better spacecraft, conduct more efficient satellite launches, and make progress on one of Virgin’s biggest goals: trans-continental point-to-point space travel.

As for Saudi Arabia, Branson teased the development of a “space-centric entertainment industry,” but didn’t elaborate on the project. He did, however, make it clear that Virgin won’t be moving to the country anytime soon.

“We will remain majority shareholders, and our companies will remain firmly rooted in Virgin brand values and based in southern California and New Mexico,” he said.

Source: https://futurism.com/saudi-arabia-to-invest-1-billion-in-virgin-galactic-to-advance-space-travel-projects/

China Is Eyeballing a Major Strategic Investment in Saudi Arabia’s Oil

Since the election of Donald Trump, relations between Saudi Arabia and the United States have seemingly returned to their halcyon days. Saudi officials have been energized by Trump’s desire to roll back Iranian influence and his support for Saudi economic reforms, and they are enthusiastic about the two countries’ newfound unity of purpose.

But Saudi Arabia is not just being courted by the Trump administration. Without the pomp and circumstance of the Riyadh summit, where Trump addressed representatives from across the Muslim world earlier this year, the Chinese government is taking quiet steps to bring Saudi Arabia’s hydrocarbon reserves firmly into its orbit. Through its ambitious Belt and Road Initiative and a reported offer to invest in the kingdom’s state-owned oil company, Saudi Aramco, the Chinese are laying the groundwork for a profound economic shift in the Middle East and the world.

As it has grown over the last three decades, China has slowly become a much more important energy partner to Saudi Arabia and Gulf states. Its emergence as an economic powerhouse has increasingly fueled its ambition to dictate the rules of the energy market: In recent years, it has scaled down its share of energy imports from OPEC members in favor of non-OPEC countries, primarily due to its preference to purchase oil and gas in yuan or the local currency of the exporter, rather than U.S. dollars. China imports approximately one-quarter of its energy from Saudi Arabia, but Russia recently supplanted the kingdom as China’s top energy producer.

China’s fastidious control over its own currency is the first step toward upending the way oil is traded. Forged by U.S. President Richard Nixon and Saudi King Faisal bin Abdulaziz Al Saud in 1973, the petrodollar system has wedded the greenback to the world’s most sought-after commodity.

In return for conducting energy sales exclusively in dollars, the United States agreed to sell Saudi Arabia advanced military equipment. One obvious reason China wants oil to be traded in yuan is to increase global demand for yuan-denominated assets. This would increase capital inflows and may eventually lead to the yuan being a plausible global alternative to the American dollar. Saudi Arabia is OPEC’s historic swing producer and price arbiter — if it agreed to conduct transactions in currencies other than the dollar, other OPEC producers would be forced to follow suit.

Beijing’s thinking is also influenced by geopolitical calculations. China’s return on investment in Saudi infrastructure could take decades, but Beijing would gain a valuable foothold in the Gulf and possibly persuade one of the world’s leading oil producers to upend the way oil is traded. Moreover, Saudi Arabia and its Gulf allies, especially the United Arab Emirates, provide a valuable hub to Middle Eastern and African markets through their ports, airports, and global networks. This spring and summer, Beijing and Riyadh announced a number of deals in various sectors, including increased energy exports and a reported $20 billion shared investment fund.

The equation is much more difficult for Saudi Arabia and the other oil-producing countries in the Gulf. On one hand, Saudi Arabia’s alliance with the United States, however shaky, is the bedrock of regional security. On the other hand, growth in energy consumption will continue to be centered east of the kingdom, not west.

The Chinese have not given Saudi Arabia much time to consider its options. Chinese state-owned oil companies PetroChina and Sinopec have already expressed interest in a direct purchase of 5 percent of Saudi Aramco. This could prove to be a boon for Crown Prince Mohammed bin Salman, who has been eager to achieve a $2 trillion valuation of Aramco in a highly anticipated initial public offering, which is currently scheduled for 2018.

Considering the depressed state of the oil market, investors may be hesitant to meet the targets for Aramco’s valuation that the Saudi leadership has laid out. A private Chinese placement could solve this dilemma — and allow Riyadh to delay the IPO in the hopes that oil prices will improve. While this investment may not explicitly require that Saudi Arabia agree to trade in yuan, it would give China leverage toward that goal. For Mohammed bin Salman, Chinese investment in Aramco could kick-start a new economic partnership with Beijing. As part of its economic reform, Saudi Arabia’s ambitious Vision 2030 plan intends to raise foreign direct investment from 3.8 percent of GDP to 5.7 percent, or an additional $12 billion per year.

It is a far safer bet that China would be able and willing to inject that type of money into Saudi Arabia than U.S. private equity and hedge funds. The main reason for this is the difference in Chinese and Western time horizons when considering return on investment. While Western governments and companies have historically had appetite for infrastructure projects that offer a return on investment in a maximum of 30 to 40 years, the Chinese are playing a much longer game — in some cases investing in projects that break even in more than 100 years.

Saudi Arabia and China stand to gain from this geoeconomic shift — but what about the United States? For all its talk of remaking the U.S. economy, the Trump administration must heed the changing economic currents. Given the depths of Beijing’s interest in Saudi Aramco, it seems many policymakers in the Gulf and the West do not fully appreciate the geopolitical interests at stake. Aramco, formerly the Arabian-American Oil Company, will not rebrand itself — but it may effectively become “Archco,” the Arabian-Chinese Oil Company.

Source: http://foreignpolicy.com/2017/10/26/china-is-eyeballing-a-major-strategic-investment-in-saudi-arabias-oil/

Saudi Arabia launches a futuristic economic zone

IT WAS like Davos in the desert: some 3,500 politicians, business bosses and bankers from around the world crowded into a vast conference centre in Riyadh for a jamboree called the Future Investment Initiative. This was a giant coming-out party for “Vision 2030”, the economic plan to move Saudi Arabia away from dependence on oil. It is the brainchild of the country’s crown prince, Muhammad bin Salman, widely known as MBS. A cornerstone of the plan is selling shares in Saudi Aramco in what is touted as the world’s biggest IPO if it goes ahead next year.

The young prince proclaimed that he wants the kingdom to be “a country of moderate Islam that is open to the world and open to all religions.” As for extremist ideas, “we will destroy them today.” His striking remarks came at the launch of an equally striking mega-scheme: a futuristic city-cum-economic-zone called NEOM (from the Greek neo, meaning new, and the Arabic mostaqbal, meaning future).

Spread over 26,500 square kilometres (10,200 square miles) and along 468km of coast, NEOM will operate under its own rules rather than those of the rest of the kingdom. It could thus create an environment optimised for drone deliveries, say, or driverless cars. Energy is to come entirely from renewable sources, thanks to an abundance of sun and wind. Everything that can be automated will be. NEOM is envisaged as a hub between Europe, Asia and Africa, and a home drawing in people with the skills to create world-class businesses in industries from biotechnology to food.

The ambitions for NEOM are huge. It will supposedly attract $500bn of investment, from the kingdom’s Public Investment Fund and international backers. It wants to lead the world in both efficiency and income per head. It aspires to be “the safest, most efficient, most future-oriented, and best place to live and work.”

Sceptics can point to plans elsewhere for “smart cities” (such as Masdar in the United Arab Emirates) that are launched with much fanfare but fail to live up to the hype. In Saudi Arabia itself, the King Abdullah Financial District in Riyadh is a $10bn white camel. Will NEOM be different?

It starts, at least, with the credibility that comes from its big-name supporters. At the launch were an ebullient Masayoshi Son, the Japanese head of a $100bn “Vision Fund”, and Stephen Schwarzman, head of Blackstone, a private-equity giant. Klaus Kleinfeld, a former boss of Arconic, Alcoa and Siemens, is to be NEOM’s chief executive. The prospect of creating a dynamic zone without the barriers to enterprise found elsewhere in the country has such people genuinely enthused.

Still, three big questions stand in the way of the NEOM dream becoming a reality. The first is timing. Can the project come together fast enough to maintain momentum? So far, the details remain sketchy, and the timing vague. The government says the $500bn will arrive “over the coming years”. Yet a fall in oil prices since 2014 has already squeezed public finances: this year Saudi Arabia’s government will probably run a fiscal deficit of 9% of GDP and the economy has ground to a halt.

Second, can NEOM generate bottom-up creativity to match the top-down vision and planning? A little “chaos” is needed, said the man dressed in Silicon Valley casual next to Mr Kleinfeld at the launch: Marc Raibert, the boss of Boston Dynamics, a robotics company.

Whether Saudis are prepared to sit back and let such creative chaos happen will also help to answer the third, and perhaps most important, question: will NEOM attract the sort of international talent (including women) it will need to achieve its ambitions? To do so, it will have to be a much more relaxed, open place than the kingdom is today. True, it is starting to change, as MBS’s comments this week made clear. Thanks to his influence, women will at last be allowed to drive next year. Maybe NEOM can accelerate such progress. But there is a long way to go.

Unless it becomes a truly desirable place in which to live and work, NEOM will risk realising one of its goals, but not in the way intended. It hopes to be the first city where robots outnumber people.

This article appeared in the Middle East and Africa section of the print edition under the headline “There’s no place like NEOM”

Source: https://www.economist.com/news/middle-east-and-africa/21730665-crown-princes-plans-get-ever-grander-saudi-arabia-launches-futuristic

Saudi Arabia’s youth embrace crown prince’s desire for liberalisation

Saudi Arabia’s crown prince almost didn’t say one of the most revolutionary things ever uttered by a member of the House of Saud.

“For many reasons, today is not the right day to discuss [extremism],” Mohammed bin Salman told a panel at the Future Investment Initiative in Riyadh on Tuesday.

“We were not like this in the past… we want to go back to what we were before – a country of moderate Islam that is open to all religions and to the world,” he said to applause.

In a later interview with The Guardian, the crown prince said that the country’s conservatism was in part fallout from Iran’s Islamic Revolution.

“What happened in the last 30 years is not Saudi Arabia. What happened in the region in the last 30 years is not the Middle East. After the Iranian revolution in 1979, people wanted to copy this model in different countries, one of them is Saudi Arabia. We didn’t know how to deal with it. And the problem spread all over the world. Now is the time to get rid of it.

“Seventy per cent of [the Saudi] population is under 30 and we won’t allow the 30 per cent to hold them back.”

The comments – Prince bin Salman’s most direct criticism of Saudi Arabia’s puritanical religious establishment to date – appear to have cemented his reputation as a bold and liberal reformist.

Of course, his words were carefully chosen, no matter how nonchalantly they were delivered.

Riyadh is keen to diversify its revenue streams and open up to the modern world following a global plunge in oil prices, but the state’s continuing human rights abuses mean the declaration has been met with scepticism internationally.

At home, however, many think the prince has sent a clear message to the kingdom’s hardliners: the 32-year-old heir to the throne, who will mostly likely set the agenda in Saudi Arabia for decades, is quickening the pace of social change – and does not expect the religious establishment to challenge him.

Saudi social media has lit up with praise for Prince bin Salman since yesterday’s comments: “Finally, we can join the 21st century,” one woman posted on Twitter. “He’s going to change history,” said another user.

“This country needs someone like him,” 25-year-old Yousif al-Helw, from Jeddah, told The Independent.

“He’s a lot more brave in spearheading reforms, whereas previous – older – Saudi rulers were always worried about keeping the conservatives at bay.”

People in the kingdom have watched from afar as Arab Spring demands in other countries have ended in the rolling back of freedoms or war.

In Saudi Arabia’s restive east, armed protests demanding an end to discrimination against Shia citizens have led to a brutal crackdown which have left parts of Qatif province looking like war-torn Syria.

While many of Saudi Arabia’s tireless rights activists would have preferred a bottom-up, more democratic movement for change, soome feel that any change is better than none.

“There’s excitement about the momentum in contrast to the stagnation of years past, but uncertainty about the direction,” said one young professional living in Riyadh, who did not want to be named.

The crown prince, who was suddenly appointed to the post in June this year at the expense of his uncle, is not without his critics.

In his role as defence minister – a position he has held since 2015 – bin Salman has proved hawkish, attracting censure over his role in Saudi Arabia’s bloody intervention in the Yemeni civil war, as well as his aggressive stance on regional rival Iran.

The prince is also regarded as one of the primary decision makers behind the Gulf states’ recent cutting of ties with Qatar.

But even if it’s just domestic, and even if implemented through the will of an absolute monarchy, it seems change for the better is on the cards.

“I definitely think [Prince bin Salman] is genuine, because he doesn’t have a reason not to be,” Mr Helw said. “There isn’t real formal opposition in Saudi. He doesn’t need to do this for show, because the people have no say.”

Source: http://www.independent.co.uk/news/world/middle-east/saudi-arabia-change-youth-crown-prince-modernise-wahhabism-mohammed-bin-salman-a8019876.html

Saudi prince’s bold plan for a $640b futuristic megacity

HE’S been heir to the Saudi throne for less than six months and Crown Prince Mohammed bin Salman is already shaking things up in big ways.

The young prince was behind Saudi Arabia’s recent shock decision to finally allow women the right to drive — one of his first moves towards dragging the ultraconservative kingdom into a more progressive future.

And now he’s starting to unshackle Saudi Arabia from its traditional reliance on oil exports with a very ambitious new plan.

In a rare public address on Tuesday, Prince Mohammed, 32, announced plans for a $640 billion futuristic megacity that will be Saudi Arabia’s next economic powerhouse.

Saudi Arabia’s visionary crown prince Mohammed bin Salman, has some big changes in store for the conservative kingdom. Picture: Fayez Nureldine / AFP

Saudi Arabia’s visionary crown prince Mohammed bin Salman, has some big changes in store for the conservative kingdom. Picture: Fayez Nureldine / AFPSource:AFP

The project, dubbed NEOM and spruiked as “humanity’s next chapter”, is a business and industrial zone extending to neighbouring Jordan and Egypt and spanning a whopping 26,500sq k — making it 33 times bigger than New York City, and more than twice the size of greater Sydney.

The proposed megacity will be financed by the Saudi government and private investors and powered entirely by wind and solar energy. It will focus on the food, entertainment, energy and water, biotechnology and advanced manufacturing industries.

The NEOM zone would serve as another revenue stream for Saudi Arabia, the world’s top oil exporter, which has struggled with slumping oil prices since 2014.

NEOM was revealed to the world at an investment conference in Riyadh on Tuesday. Picture: AFP/Fayez Nureldine

NEOM was revealed to the world at an investment conference in Riyadh on Tuesday. Picture: AFP/Fayez NureldineSource:AFP

Announcing the project at a major investment conference in the capital Riyadh, Prince Mohammed said NEOM would be an example of the hi-tech future he envisioned for his notoriously conservative country.

He held up two mobile phones — one, a modern smartphone and the other, a decade-old device — to illustrate the difference between futuristic NEOM and anything else, Reuters reported.

“This project is not a place for any conventional investor,” the Prince said. “This is a place for dreamers who want to do something in the world.

“The strong political will and the desire of a nation. All the success factors are there to create something big in Saudi Arabia.”

Former Alcoa boss Klaus Kleinfeld, pictured here with the crown prince, has been named chief executive of NEOM.

Former Alcoa boss Klaus Kleinfeld, pictured here with the crown prince, has been named chief executive of NEOM.Source:AFP

The NEOM zone will sit adjacent to the Red Sea and the Gulf of Aqaba, between Egypt and Saudi Arabia, and close to the maritime trade routes that use the Suez Canal.

Saudi Arabia’s Public Investment Fund, which will partially fund the project, said NEOM would be a gateway to the proposed King Salman Bridge that will link Egypt and Saudi Arabia.

“NEOM is situated on one of the world’s most prominent economic arteries,” the fund said.

“Its strategic location will also facilitate the zone’s rapid emergence as a global hub that connects Asia, Europe and Africa.”

Jordan and Egypt, which are close allies of Saudi Arabia, are yet to comment on the plan, according to Reuters.

Riyadh said it was in contact with potential investors and the project’s first phase would be completed by 2025.

‘WE WILL DESTROY EXTREMISM NOW’

The $640 billion megacity is Prince Mohammed’s boldest move yet in his mission to rapidly modernise Saudi Arabia, which has long been ruled by strict religious law and under the influence of hard line religious clerics.

The King Abdullah financial district in Riyadh. Picture: Waseem Obaidi/Bloomberg

The King Abdullah financial district in Riyadh. Picture: Waseem Obaidi/BloombergSource:Bloomberg

He has a plan for social and economic reforms under what he calls Vision 2030, including the NEOM project. Allowing women to drive was another major reform under Vision 2030; in another, Saudi Arabia may soon bring back cinemas.

Prince Mohammed, who was appointed crown prince in June by his father, King Salman bin Abdulaziz Al Saud, is relatively popular among his fellow Saudi millennials.

And he knows they are crucial in his vision for his country’s future, in which he also wants to see a more moderate observation of Islam.

“We are simply reverting to what we followed — a moderate Islam open to the world and all religions,” he told the Future Investment Initiative conference in Riyadh.

“Seventy per cent of the Saudis are younger than 30. Honestly, we won’t waste 30 years of our life combating extremist thoughts. We will destroy them now and immediately.”

The crown prince with US President Donald Trump at the Oval Office in March. Picture: Mark Wilson/Pool via Bloomberg

The crown prince with US President Donald Trump at the Oval Office in March. Picture: Mark Wilson/Pool via BloombergSource:Bloomberg

In a subsequent interview with The Guardian, Prince Mohammed said the past three decades had seen his country ruled by rigid doctrines that came about in reaction to the Islamic revolution in Iran in 1979 — and the time for that was over.

“What happened in the last 30 years is not Saudi Arabia. What happened in the region in the last 30 years is not the Middle East,” he said.

“After the Iranian revolution in 1979, people wanted to copy this model in different countries, one of them is Saudi Arabia. We didn’t know how to deal with it. And the problem spread all over the world. Now is the time to get rid of it.”

Expanding on his vision for NEOM and Saudi Arabia’s economic future, the Prince added: “We are a G20 country. One of the biggest world economies.

“We’re in the middle of three continents. Changing Saudi Arabia for the better means helping the region and changing the world.

“So this is what we are trying to do here. And we hope we get support from everyone.”

Source: http://www.news.com.au/travel/world-travel/middle-east/saudi-princes-bold-plan-for-a-640b-futuristic-megacity/news-story/c222397b57aaa1229a4bfadeaedfcf6d

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Quote by the Prince

"We seek to be proud of our country, and allow the latter to contribute to the development of the world, whether on the economic, environmental, civilisational, or intellectual levels."

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