Covering 26,500 sq km, Neom will be larger than Sardinia, Lebanon and Israel, so it is hard to imagine that it will be simply a city. In fact, 32-year-old Crown Prince of Saudi Arabia Mohammed bin Salman has much more ambitious aims for the project of his creation: the goal of what is set to be a kind of Silicon Valley in the heart of the Middle East is to change the country’s economy, by liberalising it and making it less oil dependent. The name Neom is not a coincidence: it combines the Latin root “neo” with the letter “M”, the first letter of mustaqbal, which means “future” in Arabic.
The city will be strategically placed – on a greenfield site along the Red Sea coast, in the north-western part of the country, on the border with Jordan and Egypt. Prince Mohammed bin Salman, when introducing it last autumn at the Future Investment Initiatives Forum (attended by 3,500 business people from 88 countries, including the Italian Minister of Economy Pier Carlo Padoan) assured his audience that Neom “will become a global hub that will connect Asia, Europe and Africa and will be the safest, most efficient and future-oriented place in the world, as well as the best place to live and work”.
But perhaps not quite the best place for some, for example, alcohol will be banned (Islamic law prohibits it). “A foreigner who wants to drink alcohol is free to go to neighbouring Egypt or Jordan”. Luckily for those who are partial to a tipple, the city will be connected to Sharm El Sheikh by bridge, resting on the islands of Tirana and Sanafir (which were “donated” to Saudi Arabia on 4 March by the Egyptian president Al Sisi during the Saudi king’s visit to Cairo).
To attract foreign talent and investment, Neom will have a free zone with its own customs system, special taxation and labour legislation and an independent judicial system subject to independent regulations, which will be drafted (and this is big news too) hand-in-hand with local and non-local business people. Only manufacturing and business involving valuable products will be allowed in Neom, with a focus on nine investment sectors: energy and water, transport, biotechnology, food, technology and digital sciences, advanced manufacturing, and media and entertainment. Formally, territorial sovereignty will be held by Riyadh.
The project, worth USD 500 billion, is part of the Saudi Vision 2030, a two trillion dollar plan that the Saudi king kicked off in 2016 with a clear goal: to diversify the economy of what is the largest oil exporter, create jobs in the private sector and streamline bureaucracy – thus turning Saudi Arabia into a new country. Saudi Arabia aims to compete with (or imitate) the United Arab Emirates (especially Dubai) and Qatar, both of which have become examples of an economic development model supplementary to oil production and export.
The management was entrusted to world-renowned Western manager Klaus Kleinfeld, former CEO of Siemens and Alcoa. In addition to foreign investment, a large part of the required funding will come from the investment fund (PIF) chaired by Salman himself, and which can now count on USD 230 billion worth of assets but which aims to grow even more once 5% of the Aramco company is listed on the stock exchange (New York, London, Tokyo and Hong Kong stock exchanges are currently in the hunt for winning Saudi Aramco’s IPO).
The city will have a new – hyper-technological and sustainable – housing model. The “ideal city”, nestled between the Gulf of Tiran and Jordan, will be entirely fed by renewable sources: wind and solar plants. All the transport systems will be equipped with automatic driving software, drones packed with passengers will fly among the skyscrapers, and high-speed Wi-Fi internet connection will be guaranteed everywhere. By 2030, the plan envisages completion of a residential area, a financial district, a sector for entertainment and tourism and a network of dedicated industrial parks: renewable energy, water sector, biotechnology, food supply chain, technology and digital sciences. The works are expected to kick off in the first quarter of 2019, and the first phase of development should be concluded by the end of 2025. With over 70 companies engaged in major infrastructure projects, Italy is one of the main trade partners of the Saudi kingdom. And thanks to Neom, business opportunities are set to soar.