A promotional video released on Tuesday features a lifestyle so far unavailable in Saudi cities. It showed women free to jog in leotards in public spaces, working alongside men and playing instruments in a musical ensemble. The one woman wearing a hijab had her head covered with a patterned pink scarf.
The kingdom has already announced a plan to transform hundreds of kilometers of Red Sea coast into a semi-autonomous world-class tourism destination and governed by laws “on par with international standards.”
The unveiling of the new project comes as Saudi officials, almost two years into the latest reform drive, are still grappling with how to speed up change without crippling the economy and clashing with the kingdom’s conservative religious establishment.
The world’s biggest oil exporter wants to overhaul the economy while creating enough wealth to avoid the risk of social unrest. Similar efforts over the past three decades have floundered, with plans losing steam as soon as crude prices recovered. Some landmark projects, such as a $10 billion financial district in Riyadh, are struggling to take off.
Details Needed
“Saudi Arabia has announced a number of mega-projects recently, but what investors will ultimately look for is greater details, progress with plans and initial investment,” said Monica Malik, chief economist of Abu Dhabi Commercial Bank. And while the planned, more liberal, regulatory framework for the city “could be positive for streamlining investment,” it didn’t gain traction with previous economic cities developed in the kingdom, she said.
Prince Mohammed, who became heir to the throne this summer after his older cousin was removed from office, has vowed not to repeat past mistakes, insisting that his Vision 2030 will proceed regardless of oil prices. His government has cut subsidies, slashed spending to trim the budget deficit and it plans to introduce value-added taxation next year to raise non-oil revenue.
Hertog said investors will want to see whether “circumventing some of the slow mainline bureaucracy and general social restrictions in Saudi Arabia in a special zone” can work. “If this is to be an international hub, it needs to offer something better than Dubai, which is a high bar to cross,” he said.
The crown prince indicated he understood the challenge. “Dreaming is easy, achieving it is difficult,” he said.
This article was provided by Bloomberg News.