Top secret sources revealed that Saudi Crown Prince Mohamed bin Salman (MBS) is holding meetings on a daily basis with senior officials over the failure of his megacity project, NEOM.
NEOM appears to be one of the crown prince’s highest priorities, and the Saudi state is devoting immense resources to making it a reality.
But five years in and with little progress in sight, cracks are appearing in Crown Prince’s flagship project to diversify the oil-driven Saudi economy.
Saudi Arabia is building its very first cognitive and smart $500 billion city, which is supposed to set a blueprint for the future of the country and the world. But despite all the buzz, the future of the city is probably doomed.
The International Monetary Fund cut its 2023 GDP growth projection for Saudi Arabia to 1.9% in its latest World Economic Outlook update, to reflect the impact of prolonged oil production cuts.
The IMF revised its growth forecast for the world’s top oil exporter from 3.1% projected in its May regional outlook; in June, it said growth could ease to 2.1% in 2023.
“The downgrade for Saudi Arabia for 2023 reflects production cuts announced in April and June in line with an agreement.
The boom was propelled by record crude output of around 10.5 million barrels a day and prices averaging $100 a barrel as the conflict in Ukraine roiled energy markets.
“The Saudi cut could be costly,” said Jean-Michel Saliba, Middle East and North Africa economist at Bank of America Corp.
The US lender’s base case is a slowdown in growth to 0.9 percent. But it forecasts a contraction of 0.6 percent if the supply reductions aren’t reversed this year. A drop to that level would make Saudi Arabia the worst-performing economy in the G20 after Argentina, according to Bloomberg surveys.
Experts have earlier warned that the sharp decline in foreign investments by 85% in just one year is a real disaster that proves that foreign investors do not trust the projects launched by the Saudi crown prince.
Efforts to attract inward investment have been hampered by the clampdown on senior business executives and other figures in 2017 – billed by the authorities as an anti-corruption drive.
The sudden changes in the Kingdom’s economic policy and the absence of fixed laws regulating the work environment made international companies even more wary of investing in Riyadh.
Nonetheless, the chaotic trajectory of NEOM so far suggests that MBS’s urban dream may never be delivered.
“I was not alone in realizing that it was spurious at best,” Andy Wirth, an American hospitality executive who worked on NEOM in 2020, says of the project. “The complete absence of being tethered to reality, objectively, is what was demonstrated there.”
Despite the ongoing harsh criticism pointed towards Saudi NEOM project, MBS has continued his crackdown on al-Huwaiti tribe with the aim of implementing his controversial $500 billion megaproject.
Shortly after the killing of the citizen Abdul Rahim al-Huwaiti, who refused to leave his grandfathers’ house in profit of NEOM project, Saudi Arabia authorities forced people of Al-Shabha village to live in a refugee camp after demolishing their houses in profit of the megacity project.
