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”