TL;DR: The NEOM project in Saudi Arabia, a $500 billion mega-city initiative, faces numerous challenges, including spiraling costs, ethical dilemmas, and a backdrop of humanitarian crises in the region. As skepticism about its viability grows, the project risks becoming a symbol of failure against the stark realities faced by many citizens. The outcome of NEOM could have significant implications for regional stability and development models in authoritarian regimes.
The Situation
Saudi Arabia’s NEOM project, an audacious $500 billion initiative encompassing a 100-mile skyscraper, epitomizes both the aspirations and contradictions of the Saudi leadership under Crown Prince Mohammed bin Salman (MBS). Initially heralded as a transformative urban utopia reminiscent of the ambitious city-building efforts seen in the past, such as the construction of Brasília in Brazil during the 1960s—a city designed from scratch to embody modernity and progress—NEOM now grapples with major challenges that raise critical questions about its feasibility, ethical implications, and broader global consequences. Will NEOM become a beacon of innovation, or will it, like certain ambitious projects before it, fall victim to the complexities of political realities and economic sustainability?
Key Challenges
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Spiraling Costs:
- Luxury accommodation prices, such as for a ski resort, have soared from $489 to $1,866. This dramatic escalation can be likened to the real estate boom leading up to the 2008 financial crisis, where inflated property values masked unsustainable economic practices (Yusuf & Abdulmohsen, 2022; Moshashai et al., 2018).
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Public Distrust:
- Consulting firm McKinsey reportedly earns over $130 million annually from NEOM, raising concerns about their ethical practices (Ramasastry, 2021). This mirrors historical instances, such as the financial scandals surrounding major consulting firms in the early 2000s, which eroded public trust in the corporate sector.
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Humanitarian Crisis:
- The extravagant spending on NEOM starkly contrasts with the ongoing humanitarian crisis in Gaza, highlighting a disconnect between the Crown Prince’s ambitions and the realities faced by many in the Arab world (Mabon, 2018; Al-Rasheed, 2020). This situation evokes the image of a sumptuous palace being built while the populace lives in crumbling shanties—a stark reminder of societal inequities throughout history.
Globally, NEOM’s implications extend far beyond its immediate geography. As Saudi Arabia positions itself as a leader in the post-oil economy, the commitment to such a high-risk venture raises questions about the complicity of foreign governments and corporations. Are they truly investing in a brighter future, or are they turning a blind eye to the misallocation of resources that could better serve the region’s urgent humanitarian needs?
Furthermore, the challenges facing NEOM signal larger trends in economic mismanagement and the pitfalls of authoritarian models, serving as a cautionary tale for other nations contemplating similarly grandiose projects (Flyvbjerg, 2014; Huda, 2022). Much like the failed Soviet Union’s attempts at grand infrastructural projects, NEOM may stand as a monument to misplaced priorities and economic folly.
The increasing criticism directed at NEOM highlights not just individual choices but systemic issues within Saudi governance and its relationship with the global economic order. As dissent grows, voices of protest against the state’s priorities could make NEOM a bellwether for regional stability and the future of development initiatives across the Muslim world. The pressing questions remain: Can Saudi Arabia balance its ambitious visions with urgent population needs, or will NEOM ultimately become a symbol of failure amidst widespread discontent?
What If NEOM Fails to Materialize?
If NEOM does not meet its targets, the consequences could include:
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Loss of Confidence:
- A failure could destabilize MBS’s leadership amidst growing public discontent (Thompson, 2021). This scenario is reminiscent of the fallout experienced by governments in the past when grand promises were not fulfilled, such as the 2008 financial crisis, which led to a drastic decline in trust towards financial institutions and policymakers.
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Impact on Investors:
- International investors might reassess their engagements with Saudi Arabia, endangering future investments and economic collaborations. Historical patterns show that investor confidence can be as volatile as a stock market; a significant downturn in one area can lead to a ripple effect across various sectors, causing long-lasting damage to economic relationships.
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Economic Diversification Setbacks:
- A faltering NEOM would hinder the kingdom’s efforts to pivot away from oil dependency, potentially leading to an economic downturn (Cochran, 2019). This could echo the experiences of states that have struggled to diversify, like Venezuela, where reliance on oil revenues has left the economy vulnerable to global price fluctuations and economic collapse.
On a broader scale, NEOM’s failure could trigger a re-evaluation of megaprojects in regions with governance and social issues, urging a reconsideration of investment priorities toward projects that emphasize sustainability and social equity (Dziomba & Matuschewski, 2007; Swyngedouw et al., 2002). One might ask: will investors learn from past mistakes and prioritize impactful projects, or will they fall into the same cycle of chasing ambitious visions without addressing fundamental societal needs?
What If NEOM Proceeds as Planned?
Conversely, if NEOM advances as intended, potential outcomes include:
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Solidified Status:
- Successful execution may establish Saudi Arabia as a leader in modern development, much like how Singapore transformed from a trading port to a global financial hub.
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Attracting Investments:
- It could invite more partnerships from global firms eager to engage with a futuristic mega-city model, reminiscent of how Dubai attracted international interest through its ambitious projects.
However, such success could also bring significant challenges:
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Socio-Economic Disparities:
- Wealth may concentrate among elites, marginalizing average citizens and potentially breeding resentment and conflict, similar to the socio-economic divides seen in cities like Lagos, where rapid growth has not translated into equitable wealth distribution.
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Environmental Consequences:
- Rapid development without sustainability considerations could lead to adverse effects on the desert landscape (Flyvbjerg, 2014), echoing the challenges faced by cities like Los Angeles, where urban sprawl has resulted in significant ecological degradation.
Moreover, NEOM’s success might endorse the narrative that authoritarian governance facilitates economic growth, encouraging similar regimes to replicate this model and undermining global calls for democratic reforms (Thompson, 2016). Is it worth risking democratic ideals for the sake of economic advancement?
What If Public Opposition Escalates?
If public opposition intensifies, significant ramifications could unfold:
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Mobilization Against NEOM:
- Organized protests could challenge state priorities and governance, pushing the government to focus on domestic stability over international ambitions (Moshashai et al., 2018). This situation could mirror the 1960s civil rights movement in the United States, where grassroots movements successfully shifted governmental priorities towards addressing systemic inequalities.
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Impact on International Relations:
- Growing internal discord may make foreign partners cautious about aligning with a regime facing protests. In an era where international partnerships are as fragile as glass, one crack—like a wave of dissent—can shatter the trust needed to foster collaboration.
Should dissent reach levels akin to the Arab Spring, the regime might resort to repression, inviting international backlash and isolation, which in turn threatens economic diversification efforts (Ettinger, 2023). Imagine a tightrope walker: if the winds of dissent blow too fiercely, the balance is easily lost, leading to a catastrophic fall that could undermine years of development efforts.
The Saudi government’s ability to navigate the dynamics of ambition and public sentiment will be crucial in determining the future of NEOM and the broader social contract with its citizens. Will they adapt like successful leaders in history, or will they cling to outdated strategies that only escalate tensions?
Strategic Maneuvers
Given the complexities surrounding the NEOM project, various stakeholders must consider strategic maneuvers moving forward. For the Saudi government, key priorities should include:
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Enhancing Transparency:
- Involve a broader cross-section of the population in discussions about NEOM and related initiatives. Just as the ancient Greeks sought public input through assemblies to ensure that the voice of the citizenry was heard, modern strategies for transparency can forge a stronger bond between the government and its people.
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Addressing Humanitarian Challenges:
- Show commitment to alleviating regional suffering to bolster domestic and international credibility. Historically, nations that have prioritized humanitarian issues—like post-war Germany with its Marshall Plan—have often seen enhanced stability and international respect.
International partners, including private firms and foreign governments, must reassess their engagement with NEOM:
- Ethical Investment Practices:
- Prioritize sustainable development and equitable resource distribution. This is akin to planting a garden; without nourishing the soil (communities), no matter how lavish the seeds (capital) are, the growth will be stunted or non-existent.
Civil society organizations and activists should continue advocating for accountability and social justice:
- Raise Awareness:
- Utilize social media to highlight inequalities and push for reforms that genuinely meet citizens’ needs. In the age of digital connectivity, their voices can echo across platforms like a modern-day town crier, amplifying issues that might otherwise remain in the shadows.
The future of NEOM raises critical questions about development, governance, and social justice in contemporary society. Will this ambitious endeavor become a beacon of progress, illuminating pathways for future generations, or a cautionary tale of misallocation and disconnection from the populace’s realities? The choices made by all stakeholders will ultimately shape the narrative of NEOM and its impact on society.
References
- Yusuf, N., & Abdulmohsen, D. (2022). Saudi Arabia’s NEOM Project as a Testing Ground for Economically Feasible Planned Cities: Case Study. Sustainability. https://doi.org/10.3390/su15010608
- Moshashai, D., Leber, A., & Savage, J. D. (2018). Saudi Arabia plans for its economic future: Vision 2030, the National Transformation Plan and Saudi fiscal reform. British Journal of Middle Eastern Studies. https://doi.org/10.1080/13530194.2018.1500269
- Ramasastry, A. (2021). Advisors or Enablers? Bringing Professional Service Providers into the Guiding Principles’ Fold. Business and Human Rights Journal. https://doi.org/10.1017/bhj.2021.28
- Mabon, M. (2018). Mohammed bin Salman and Religious Authority and Reform in Saudi Arabia. Unknown Journal.
- Al-Rasheed, M. (2020). Brute Force and Hollow Reforms in Saudi Arabia. Current History. https://doi.org/10.1525/curh.2020.119.821.331
- Thompson, M. C. (2021). THE IMPACT OF VISION 2030 ON SAUDI YOUTH MINDSETS. Asian Affairs. https://doi.org/10.1080/03068374.2021.1992202
- Swyngedouw, E., Moulaert, F., & Rodríguez, A. (2002). Neoliberal Urbanization in Europe: Large–Scale Urban Development Projects and the New Urban Policy. Antipode. https://doi.org/10.1111/1467-8330.00254
- Sadaqat Huda, M. (2022). Governance Challenges of South Asia’s Energy Megaprojects. Geopolitics. https://doi.org/10.1080/14650045.2022.2129011
- Flyvbjerg, B. (2014). What you Should Know about Megaprojects and Why: An Overview. Project Management Journal. https://doi.org/10.1002/pmj.21409