Saudi Arabia: Saudi unveils $500bn new city to end dependent on oil - CALIPHATE MEDIA

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Friday, 27 October 2017

Saudi Arabia: Saudi unveils $500bn new city to end dependent on oil

27 October, 2017

The Crown Prince of Saudi Arabia Prince Mohammed bin Salman earlier in the week  announced a $500bn plan to build a business and industrial city that that will border the kingdom with Jordan and Egypt as part of its efforts to cut the kingdom from over dependence on crude oil

The new city which is dubbed NEOM is a 26,500 square km zone which will focus on industries including energy and water, biotechnology, food, advanced manufacturing and entertainment, Saudi Crown Prince Mohammed bin Salman said.
Crown Prince Of Saudi

The announcement came as an international business conference got under way in Riyadh, drawing over 3,500 people from 88 countries. The conference is been put together by Saudi Arabia sovereign wealth fund, the Public Investment Fund (PIF) with “Future Investment Initiative as the central theme. This is a deliberate effort by the Kingdom to present the world’s top oil exporter as a leading global investment destination.
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Saudi Arabia’s economy, though rich, has struggled to overcome low oil prices. Prince Mohammed has launched a series of economic and social reforms — such as allowing women to drive — to modernise the kingdom.
NEOM could be a major focus of new investment. The Saudi government, the PIF and local and international investors are expected to put more than half a trillion dollars into it in coming years, Prince Mohammed said.
“Adjacent to the Red Sea and the Gulf of Aqaba and near maritime trade routes that use the Suez Canal, the zone will serve as a gateway to the proposed King Salman Bridge, which will link Egypt and Saudi Arabia”, the PIF said.
“NEOM is situated on one of the world’s most prominent economic arteries … Its strategic location will also facilitate the zone’s rapid emergence as a global hub that connects Asia, Europe and Africa.”
NEOM is a business and industrial zone extending to neighbouring Jordan and Egypt and spanning a whopping 26,500sq km — making it 33 times bigger than New York City, and more than twice the size of greater Sydney.
The proposed megacity will be financed by the Saudi government and private investors and powered entirely by wind and solar energy. It will focus on the food, entertainment, energy and water, biotechnology and advanced manufacturing industries.
The Kingdom said it was already in contact with potential investors and would complete the project’s first phase by 2025.
Image result for neom city
Saudi Arabia will need huge financial and technical resources to build NEOM on the scale it envisages. Past experience suggests this may be difficult.
Bureaucracy has slowed many Saudi development plans, and private investors are cautious about getting involved in state projects, partly because of an uncertain legal environment.
The zone, which will have its own tax and labour laws and an autonomous judicial system, is to power itself solely with wind power and solar energy, PIF said – a goal which may be hard to achieve in practice.
But the project underlines Prince Mohammed’s ambition to rescue the economy from severe damage caused by low oil prices. NEOM will reduce the volume of money leaking out of Saudi Arabia by expanding limited local investment options, the PIF said.
A key source of future investment funds for the PIF, which now has about $230bn of assets under management, is the government’s planned sale of a roughly 5 per cent stake in national oil giant Saudi Aramco, which could raise tens of billions of dollars.

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