The International Business newspaper The Financial Times has reported on the ambitious plans of the Saudi Arabia’s prince Mohammad bin Salman. The 32-year-old heir to the throne said that the Kingdom was planning to diversify the economy in the next 15 years. To fulfill the plan, it is planned to invest about 500 billion US dollars in the creation and development of a free economic zone on the Red Sea coast.
The new city has already received a futuristic title of Neom. It will be managed personally by Prince Mohammad.
At the moment the presented project is the most ambitious project on diversification in the world. The city is planned to be located on an area of 260 thousand square kilometers. The brainchild will be financed from the treasury and the special Public Investment Fund, as well as by private investors.
The city is planned to be made energy-passive, providing it with fully renewable sources of electricity. The purpose and goal of creating a free economic zone Neom is to attract investments in innovative sectors of the economy, notably in the “green” energy and robotics. Prince Mohammad bin Salman Al Saud states that in 12 years a new innovative free economic zone on the shore of the Red Sea will have made a significant contribution to the country’s gross domestic product – $ 100 billion.
The creation of the city of Neom is part of a plan to transform the national economy adopted by the Saudi government about a year ago. The goal of the program is to reduce the dependence of the budget on oil production.
In the framework of the transformation program, in addition to the development of a free economic zone, mass privatization of assets, as well as unemployment reduction (by creating a million jobs) are also being planned.
This is not the Kingdom’s first attempt to reorient the country’s economy; in the 2000s it was announced about ambitious plans to create six new-type cities. However, the project hasn’t been implemented. The young prince states that the relevant lessons have been learned and no mistakes will be made. Well, we’ll see in ten years.
The material was prepared with the participation of Andrey Majorov,
a leading analyst of the brokerage company CT Trade