Saudi Arabia is reevaluating its ambitious projects as a result of the country's current financial troubles. It may reportedly be necessary to reduce the scope of some of these projects or postpone their completion to meet financial constraints.
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Saudi Arabia's Financial Challenges
The centerpiece of Vision 2030, Saudi Arabia's massive desert development project Neom, has seen ambitions reduced in recent months. In addition to Neom, Saudi Arabia is planning thirteen additional massive building projects, or 'giga projects,' with a combined value in the trillions of dollars.
Moreover, along with an abundance of other cultural and tourist hotspots, these include an entertainment metropolis on Riyadh's outskirts and several five-star island resorts in the Red Sea. However, the lower prices of oil have affected the finances of the government, which has compelled Riyadh to reevaluate these projects and investigate other funding sources.
A government-affiliated advisor who requested anonymity claimed that the projects are now being evaluated and that a decision is anticipated to be made shortly. He said that the decision would be based on several different considerations. Yet, it is certain that a recalibration will occur. There is a possibility that certain projects will be postponed or scaled down while others will go as planned.
Prince Mohammed, the de facto ruler of the Gulf state, is the driving force behind this economic diversification effort, which aims to wean the country's economy off of its dependence on imported oil. On the other hand, because of the rapid growth of renewable energy and fresh oil finds in other parts of the world, economists have warned that the system could not be maintained permanently. As a result, Riyadh needed to transition quickly toward an economy that is based entirely on industry and services.
Many economists have expressed their approval of Prince Mohammed's Vision 2030 initiative, which has been criticized for being overly optimistic. They believe that the diversification plan, even if it is only partially executed, has the potential to wean Riyadh off of its dependence on oil and gas reserves. Accordingly, Some have accused the de facto ruler of carrying out a ruthless crackdown on activists, even going so far as to murder local campaigners whose communities NEOM threatened to wipe out.
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NEOM Ambitious Projects
The NEOM project, which is estimated to be worth $1.5 trillion and was initiated in 2017 by Crown Prince Mohammed Bin Salman (MBS), comprises sixteen regions that are planned to be constructed in the western Tabuk province of the country, which is located towards the Red Sea.
Along with the development of NEOM, Vision 2030 also includes the creation of thirteen additional massive building projects, sometimes known as giga projects, which are estimated to be worth trillions of dollars. These include several high-end resorts on islands in the Red Sea, an entertainment city on the outskirts of the capital, Riyadh, and other vacation spots.
'The Line' is an example of a mega project that has received the greatest attention. In the beginning, it was described as a linear city that stretched across an expanse of desert and consisted of two adjoined parallel skyscrapers that were 1,640 feet tall and of mirrored construction.
The Kingdom had high hopes that it would one day become a 'carbon-free linear city,' that it would be home to nine million people, and that it would revolutionize the way people live in metropolitan areas.
Nevertheless, earlier this year, some speculations stated this was going to be reduced to a length of only 1.5 miles and would be home to approximately 300,000 people. When asked about the future features, experts have said that such technology does not exist, therefore it is unclear how many of those would be kept. As of September of the previous year, the nation had only $15 billion in cash reserves, even though the government-controlled assets were worth over $900 billion. The government has projected that the deficit for 2024 will be $21 billion.
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