Al Fusaic

View Original

Rebranding Saudi Arabia: NEOM

Al Fusaic

By Alyssa Kristeller

The planned site of OXAGON, one of the cities in the NEOM project, part of Saudi Arabia’s Vision 2030 plan for diversifying the country’s economy: https://www.neom.com/en-us/regions/oxagon

What’s the first thing that comes to mind when you think of the Kingdom of Saudi Arabia? Probably oil, right? You would be correct, as the Kingdom holds around 17% of the world’s proven petroleum reserves and about 50% of its GDP comes from the oil and gas sector [i]. But, would you believe that Saudi Arabia is gearing up to be the home of the first and largest sustainable city of its kind - straight out of the future? NEOM is a $500 billion project planned to cover over 26,500 square kilometers in the Tabuk Province of northwest Saudi Arabia, spanning coastal areas of both the Red Sea and the Gulf of Aqaba [ii]. It is planned to be a sustainable city powered by 100% renewable energy, built on a physical and digital infrastructure with an emphasis on walkability, and a hub for global innovation, investment, and commerce [iii]. It’s a very ambitious and costly plan but has over time attracted more and more support and investment from international partners and leaders in the fields of urban planning and sustainability. Let’s look at the timeline and some of the reactions from the international community over time to NEOM and the idea of a “sustainable Saudi”.  

2016-2017: Saudi Green Initiative and NEOM Unveiled

As part of the Kingdom’s Vision 2030 plan for diversifying the country’s economy, Crown Prince bin Salman announced the Saudi Green Initiative in 2016. The initiative has eight objectives, including achieving “net-zero emissions by 2060”, as well as other goals for emissions reduction, tree planting, and land protection. 

On October 24, 2017, at the Future Investment Initiative conference held in Riyadh, bin Salman announced the city as a $500 billion mega-city and hub for international business, with its own taxation and labor laws and judicial system independent of the rest of the country [iv]. Back then, it was predicted that the Public Investment Fund for NEOM would be assisted by the sale of a 5% stake in the national oil company Saudi Aramco, which was planned for 2018 but didn’t occur until 2019 [v]. 

BBC’s economics correspondent expressed their doubts about the success of NEOM early on - an article published October 24, 2017, states: “the extremely ambitious nature of Mohammed bin Salman’s vision is sure to raise questions about how realistic it is” [vi]. A CNBC article from the same day is also critical: “Saudi Arabia will need huge financial and technical resources to build NEOM on the scale that it envisages. Past experience suggests this may be difficult” [vii]. An article from October 27, 2017, in Youm7, or اليوم السابع - an Egyptian privately-owned, Arabic-language newspaper - sounds more optimistic, calling NEOM not just “a piece of American cinema fantasy of the far future at the end of the third millennium, but rather a plan under investigation that has even entered the implementation phase” [viii]. Other Arabic-language articles published during this time from sources such as Sky News Arabia and Al-Bayan (UAE-owned companies) gave neither critical nor supportive commentary of NEOM and contained solely the facts of the Crown Prince’s announcement at the conference. 

2019: Saudi Aramco Initial Public Offering

December 11, 2019, was the first initial public offering (IPO) of the Kingdom’s government-owned oil company Saudi Aramco - the most profitable company in the world at the time, which nowadays takes second place, behind Apple - on Saudi Arabia’s stock exchange platform called Tawadul [ix]. The IPO valued the company at about $1.7 trillion and raised about $26 billion for the Public Investment Fund to be used for Vision 2030 projects such as NEOM [x]. 

 A Brookings article from that day calls it the world’s largest IPO “by an eyelash instead of a landslide” and states that “it’s ironic that this is seen as somewhat of a failure, but the kingdom needs bold moves to reform its economy” [xi]. An article from the same day by Argaam, or أرقام, a Saudi Arabic-language financial news outlet, highlights the IPO as the largest in the Saudi market and the world, and also makes clear the fact that its valuation surpassed the previously current leader in the market value, Apple [xii].  

2021: Televised Announcement of “The Line” 

On January 10, 2021, Crown Prince bin Salman, in a rare television appearance, announced plans for a hyper-connected city powered by artificial intelligence in NEOM called “The Line” [xiii]. This was the announcement that clarified the sustainability goal of the NEOM project. Bin Salman announced that construction was set to begin in 2021 and was predicted to contribute $48 billion to the Kingdom’s GDP and create 380,000 jobs [xiv]. 

Dubai-based media outlet AlArabiya (part of the MBC media conglomerate owned by Saudi Arabia) published a hopeful article on the day of the announcement: “the city is positioned to become a high-tech, next-generation city and global center for innovation, trade, and creativity in the Kingdom” [xv]. The New York Times Magazine, on the other hand, published a scorchingly critical article less than a month after the Crown Prince’s announcement. “Now the Saudis have launched a fantasy that makes all their previous efforts look tame”, writes the author, who goes on to criticize not only the feasibility of the project but also the Crown Prince and Saudi government for other issues such as the murder of journalist Jamal Khashoggi in 2018 [xvi].  

Today: Projects, Partnerships, Advertising, and Attracting

Following the announcement of “The Line” in early 2021, NEOM has unveiled sub-projects within the city and has built up a network of investors and partnerships with international groups. OXAGON was unveiled as the economic and industrial powerhouse of NEOM - a seven-kilometer, octagon-shaped, clean energy-powered, floating port on the coast of the Red Sea [xvii]. Most recently announced was TROJENA, a year-round international vacation destination in the mountains of NEOM, with a range of activities for each of its four planned seasons: Winter Season, Adventure Season, Wellness Season, and Lake Season [xviii]. All three cities will be connected by hyperloop trains and powered by 100% renewable energy, as per the goal of NEOM.  

Saudi-based companies such as the King Abdullah University of Science and Technology, the MBC Group, and the Tabuk Fish Company have engaged in joint ventures for environmental, agricultural, and entertainment-themed projects [xix]. Support has come from a variety of different interested groups - 80 local and internationally acclaimed rock climbers were invited to NEOM in December of 2021 to trial new rock climbing routes of Jabal Hisma, among them five-time US national champion Emily Harrington [xx]. 

Progress is being made with International companies as well - the joint venture between US-based Air Products, NEOM, and Saudi company ACWA Power signed in 2020, plans for the world’s largest green hydrogen production plant to come online in 2025 [xxi]. In July of 2020, following the signing of the joint venture, the Atlantic Council, a think tank based in Washington, DC, published an article weighing the likelihood of success of Saudi Arabia’s venture in hydrogen energy, stating: “it is important because it is the first time that Saudi Arabia is seeking to make a significant contribution to green energy, moving away from low-cost oil”, the authors, however, predict challenges along the way because “hydrogen faces a steep cost curve to reach commercial-scale” [xxii].

Whether or not the technologies proposed for NEOM are feasible, criticism of the project spans to the topic of human rights. The Guardian, a British newspaper, and Firstpost, an Indian publication, write about how the development of NEOM is displacing the Huwaiti tribe native to the region. A member of the tribe living in London told The Guardian in 2020 “For the Huwaitat tribe, NEOM is being built on our blood, on our bones…It’s for tourists, people with money. But not for the original people living there” [xxiii]. An article from Firstpost from March, 2022 argues that the project is an attempt by the Crown Prince “to repair the country’s tarnished image” as the country wages military operations in Yemen and following its crackdown on dissent in recent years [xiv]. 

The beauty and creativity of the NEOM project have been recognized in the West. An advertisement for the city entitled “Made to Change”, directed by Francois Audouy, was nominated for an award for commercials in the 2022 Art Directors Guild Awards [xxv]. The NEOM commercial competed against Apple, Gucci, and Anhauser-Busch commercials in the awards ceremony held in Los Angeles in early March of this year. 

An Ambitious Dream or a Glimpse into the Future?

It is evident that since its unveiling in 2017, NEOM has been a hot topic of discussion not only in the Middle East but around the world. From the scathing criticism of the Saudi government’s mistreatment of human rights to the praise of international athletes for the beauty of the region’s natural features, NEOM has seen and heard it all. While we may not know the likelihood of some of NEOM’s ambitious plans, we know that there is a great deal of international investment going into the project and that the Kingdom has the resources and capability to continue funding its development. One thing is for certain based on the advertising and publicity surrounding the project - Saudi Arabia is in a rebranding phase. This rebranding is aimed at shifting the international community’s narrative of Saudi away from oil and war, and instead towards innovation, sustainability, tourism, and investment.

Sources