Saudi Arabia is kick-starting its plans to transform its economy and cut down on the kingdom's reliance on oil.
Using the kingdom's sovereign wealth fund, the country has planned to develop a large portion of land by the Red Sea into a tourism destination, which will be governed by laws "on par with international standards," according to Bloomberg. Initial construction is set for Q3 2019 while the initial phase, which includes "the development of hotels and luxury units, as well as all logistical infrastructure—including air, land and sea transport hubs"—will be complete by Q4 2022.
The project will spread across 50 islands and approximately 13,000 square miles between the cities of Umluj and Al Wajh. According to a statement sent to Bloomberg, the development, which is set to be bigger than the size of Belgium, is intended to attract "luxury travelers from around the globe." Prince Mohammed's Public Investment Fund will invest in the project and begin partnership deals between the kingdom and international companies.
Although the announcement emphasized the economic benefits of the project, a number of past mega-projects to diversify the economy have failed. Meanwhile, the project may raise questions about how acceptable the development is to the kingdom's influential religious establishment. “If you can’t change restrictions on alcohol and dress, that market disappears,” Crispin Hawes, London-based MD at Teneo Intelligence, told Bloomberg, referring to foreign tourists. The kingdom's interpretation of Sunni Islam bans alcohol, enforces a dress code, limits gender mixing and prohibits women from driving cars.
However, it’s possible the area may not have strict rules applied in the rest of Saudi Arabia. The area will be "semi-autonomous" and governed "by independent laws and a regulatory framework developed and managed by a private committee." Either a visa will not be required for entry or tourists will be able to receive one online.
This idea of a separate area for foreigners with fewer restrictions is not uncommon in Saudi Arabia. The Saudi Aramco compound in Dhahran, the most famous of these developments, was designed to like an American suburb. King Abdullah University of Science and Technology, which is attended by Saudis, has a mixed-gender campus. Not only can women drive, but they can also wear whatever they choose. Although alcohol has remained illegal, it is still consumed in many private homes and compounds mainly populated by wealthy emigrants, who have access to liquor through homemade distilleries and distributors often apprehended by authorities.
Crown Prince Mohammed bin Salman added the proposed project to his major strategy in order to prepare the biggest Arab economy post-oil. Not only have authorities started to loosen restrictions for entertainment, but they also have planned to double spending on recreation to 6 percent. This is due to the influx of travelers interested in the concerts, dance shows and film screenings Saudi Arabia has seen over the past few years.
According to Abu Dhabi-based political commentator Saeed Al Wahhabi, authorities may have created the long period between the announcement date and the start of construction to wait for the public's reaction to the plan. “We are waiting for social change within the upcoming two years before we start the project. Let the people talk about it, discuss it,” he told Bloomberg by phone. The promise of development in a rural area outside of major cities may squash concerns about Western influences permeating into Saudi society. This is possible since the strategy includes adding close to 35,000 jobs for the project "once it's up and running." The project is also expected to increase Saudi Arabia's gross domestic product by $4 billion.