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    • Nov 2, 2022
    • 6 min read

How NEOM will impact you? (2022)



The Middle-East for the past few years has been the center of some spectacular marvellous engineering in the field of construction. I am convinced that if you are reading this, then you already know a few. Since most of the online sources that discuss this topic are either government controlled newspapers, sponsored media or by people who hate middle-eastern countries; a reliable analysis of this project is nowhere to be found.

Therefore, considering its global impact that this new city may have; I decided to have an unbiased analysis of this project as a global citizen. (November 1, 2022.)


What is NEOM?

NEOM is a linear smart city being built in the southern Tabuk province of Saudi Arabia. Here, sustainability, environment and technology are the key defining aspects. In numbers, is 170 kilometers long, 200 meters wide and 500 meters high. Its estimated cost is 1Trillion Dollars. Along with the city, many smaller projects are also included to aid the city, like a floating harbour called OXAGON.


Why is it being built?

There are many reasons for it: -

First, the days of oil are ending. If we look at the major companies of the last century, there were mainly oil companies. Oil made the most of the money and oil producers ruled the economy with their control over oil prices. But now, DATA is the new OIL. After 2008, we saw a rise in revenue in the tech industry due to rapid digitalization and technological advancements. All the leading tech companies are tech companies like Google, Microsoft, etc.

Oil still has some control left in the market; but it is waning away. Since the Saudi Arabian economy is totally based on oil, it is their last chance to diversify.



Second, with the success of the United Arab Emirates (especially Dubai) in attracting tourist and diversifying the economy to some extent, Saudi Arabia is trying to mimic Dubai's transformation into a developed economy. The primary advantage of the UAE is the natural geographical gulf. A gulf is considered as a large inlet of water (oceans and seas) into a landmass. This geographical topology allowed it to become a natural harbour for travelling merchant ships. Similarly, Saudis want to capitalize on the Asian-European international shipping trade route that passes through the Red Sea.


Third, Saudi Arabia has seen no major civilian development since its creation. Most of its developments were near religious sites or in their capital city. NEOM will be the first developmental project that is intended solely for the people of Saudi Arabia. Considering recent progressive events that are taking place in Saudi Arabia and reinvesting trillions of dollars into the country for the people, signals the fact that the Government is seriously considering the modernization of the country and its people. Therefore, we can say, this ultimately helps the monarchy in retaining relevance in this modern world.

Finally, the increased competition from its allies is also a reason this project is huge. When 2 world leaders have a meeting together and smile at the camera, ordinary people think that both the nations are best friends. But in the world of politics, there is no such thing as allies and enemies; only opportunities exist, the opportunity to outperform the other person/nation; and when there are no opportunities, nations engage in wars to make some. This war may be a competition. Since oil is the main source of income for most of the Middle Eastern Countries, Saudi Arabia needs to be better than all its neighbours in their attempt to diversify their economy and reduce their dependence on oil exports.


How does NEOM affect the people of the Middle East?

With NEOM completed, the Middle East will have a development role model they can refer to when building their own smart cities to diversifying their economies. There will be an increase in revenue for the region. An increase in revenue in Saudi will probably help neighbour countries as well. One such example: during weekends, usually,Saudi nationals travel to Qatar for vacation. During this period, Qatar gets higher revenue from sales and tourism.


Will it succeed?

The success of NEOM depends on its absolute completion. Unlike most of the projects of the Middle Eastern nations that only exist on paper, NEOM should see its completion and should function as expected. Since Saudi Arabia is the main nation of interest in this article, let us consider the Jeddah Tower as an example. Jeddah Tower was destined to be taller than the Burj Khalifa and become the world's tallest building, with a height of 1km. But due to politics and pandemic, the project is currently on hold, since 2020.


If we believe the information presented to us by the Government, other factors like trade and lifestyle of the residents will improve.


Threats

NEOM project is directly controlled by the Crown Prince Mohammed Bin Salman; Therefore, he is vital for the Development of NEOM. For him, the success of this project is politically important. The video below shows he himself explaining NEOM.


With the recent politics connected to THE WAR, adverse countries could attempt to remove him from power. This can negatively impact NEOM.

There needs to be a steady flow of funds to the NEOM project for its development; but recent oil price fluctuations and politics can significantly impact NEOM's development in the long term. Furthermore, investors are less likely to invest in a desert city with no investment protection. (Considering Human Rights issues in Saudi Arabia). Saudi Arabia needs to build a trustable governmental system before marketing NEOM for investment.

Other important Issues in the Middle East


Click the button below to read the article written exclusively for this topic.

How can NEOM affect the World?

In terms of trade, a new accessible smart-port on an international shipping route always increases trade and commerce opportunities by adding a new stop for the ships. Considering its location, it is right in the center of Europe, Americas, Asia, Africa and Oceania. The Red Sea shipping route accounts for 10% of the world's trade. Trade Stops can act as junctions where the ships can take new directions into new trade routes. The trade stops act as a place to load and unload goods that are destined for different locations. Just like smaller roads that originated from bigger roads, new sea trade junctions increase the interconnectivity via the shipping routes; thereby reducing the shipping costs and global supply chain issues.

New development means new job opportunities for people. Considering the dependence of Saudi Arabia on foreign skilled workers, the job opportunities will be global. Most of the technology that is needed for its development is imported from western countries. While migrant workers from South Asia make the bulk of the workforce on site. Since Saudi Arabia does not offer citizenship or permanent residency, like Western countries, international remittance from Saudi Arabia can be expected from the workers. These remittances will help the home countries of those workers as an increase in foreign exchange reserves and taxation. I am including this point because this project talks in terms of Trillion $. Because billions of dollars will be spent as wages for the workforce over 10 years. (If they pay.)


Why Africa will benefit the most from NEOM?

Africa will be a silent beneficiary of this NEOM project in the Saudi Project. There are many reasons for it: -

Decrease in Pirates



With a continuous active presence of military and merchant ships near Somalia, there will be a decrease in sea piracy and other illegal activities in the region.



New opportunities in Africa

As soon as a shop opens in a neighborhood, many smaller shops accompany it soon. This leads to a cascading development in the region, which attracts tourism and customers. Similarly, Africa, as a continent, will see a new influx of trade ships from NEOM after its completion. This trade will most likely be associated with the eastern side of Africa along the coastline. This phenomenon will increase the income to the African Continent as a whole.



Can consider NEOM as a stepping stone to the Development of Africa.


I am currently writing an article dedicated to The Rise of Africa as a Supercontinent where I will detail its development.


 

I totally agree that the NEOM has the potential to become a revolutionary change in how people live. But considering the threats that it faces are considerably serious, it needs to be seen whether we will see its completion and functioning as intended.


 

NOTE: This article does not intend to malign or disrespect any person on gender, orientation, color, profession, or nationality. This article does not intend to cause fear or anxiety to its readers. Any personal resemblances are purely coincidental.


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