Saudi’s NEOM ’city in the desert’ project falters amid Gaza war

APR 25, 2024

Source

Faced with financial, logistical, and geopolitical challenges, Riyadh has been forced to review its ambitious project, The Line, and critically reassess “economic normalization” with Israel.

(Photo Credit: The Cradle)

Giorgio Cafiero

Launched in 2017, Saudi Arabia’s NEOM, a sprawling high-tech development on the northwestern Red Sea coast, was introduced as the crown jewel of Vision 2030. 

This futuristic desert megaproject, extending over some Jordanian and Egyptian territory, was cast as a bold leap toward economic diversification under the leadership of Saudi Crown Prince Mohammed bin Salman (MbS). But, recent geopolitical setbacks have raised significant concerns about the viability of some of NEOM’s components.

Initially celebrated for its revolutionary design, The Line, a linear city within NEOM, was to redefine urban living. Yet, recent reports suggest a dramatic scaling back. Earlier this month, Bloomberg revealed a massive reduction in the metropolis’ scope – from 105 to 1.5 miles – and a decrease in likely inhabitants from 1.5 million to fewer than 300,000 by 2030. Furthermore, funding uncertainties and workforce reductions indicate a project in jeopardy.

While this adjustment does not signify a wholesale failure of Vision 2030, it does prompt a re-evaluation of the project’s most ambitious elements. 

Experts suggest that The Line’s original scale was overly optimistic, lacking the necessary urban infrastructure for such an innovative endeavor. Financial and geopolitical challenges, including regional instability and insufficient foreign direct investment, further complicate NEOM’s future.

The drastic downsizing of The Line “appears to be a reassessment of timeline feasibility,” Dr Robert Mogielnicki, a senior resident scholar at the Arab Gulf States Institute in Washington, tells The Cradle. “There are many experimental, world-first dimensions within the NEOM gigaproject, and some are eventually going to need rightsizing or rethinking.”

Also speaking to The Cradle, Dr Kristian Coates Ulrichsen, a Baker Institute Fellow at Rice University, believes the project’s contraction to be a good thing:

Reports that The Line may be scaled back significantly is actually a positive move if it injects greater realism into a project whose initial scale appeared fanciful and difficult to translate into reality. Greater pragmatism in designing and delivering the gigaprojects associated with Vision 2030 is a good thing and means there is a greater likelihood of the projects making it off the drawing board.

Given financial and economic factors, The Line was never feasible as initially presented. Ultimately, the amount of wealth the Saudis generate from oil is not enough to finance the most ambitious of MbS’ Vision 2030 projects. And Riyadh has not been able to lure the levels of foreign direct investment needed to make these extremely expensive vanity projects realizable. 

“The vast scope of [The Line] always struck me and many other observers as aspirational rather than realistic,” explains Gordon Gray, the former US ambassador to Tunisia. 

Speaking to The Cradle, Ryan Bohl, a Middle East and North African analyst at risk intelligence company RANE, says: 

I’d argue that the goals for The Line were unrealistic from the start, given that there’s virtually no urban infrastructure in the area, and it’s very difficult for cities to be started from scratch like that, regardless of the amount of investment poured in. Even if Saudi Arabia had, for example, done something extreme like declare NEOM to be their new capital city, it would still probably struggle to attract residents as we’ve seen from other historical examples like Brazil’s shift of its capital to Brasília.

It attracts attention. That sort of discourse – positive or negative – creates a buzz. That buzz was supposed to attract investors who wanted to be a part of this, help Saudi Arabia build a city of the future, and try to do something completely outlandish and absolutely unconventional.

Gaza: a wrench in the works

The leadership in Riyadh has understood that the success of Vision 2030 heavily depends on attracting substantial foreign direct investment into the Kingdom. Ultimately, stability in Saudi Arabia and the wider West Asian region is crucial.

Consequently, Riyadh’s recent foreign policy has been less ideological, focusing instead on maintaining amicable terms with all major players in West Asia to advance Saudi business, commercial, and economic interests. 

Within this context, Riyadh has worked to reach a peace deal with Yemen’s Ansarallah resistance movement, made an effort to preserve the Beijing-brokered 2023 Saudi–Iranian détente, restored relations with Qatar and Syria, and mended fences with Turkiye.

Therefore, beyond financial and economic constraints that require a reassessment of the most ambitious Vision 2030 projects, such as The Line, Israel’s brutal six-month war on Gaza and the expansion of that conflict into the Red Sea have created headwinds for Saudi Arabia’s geoeconomic plans.

As Arhama Siddiqa, a Research Fellow at the Institute of Strategic Studies Islamabad, explains to The Cradle:

Given the current instability in the Red Sea region, investors may hesitate to support a large-scale project like NEOM due to perceived risks. Even if the direct security threat to NEOM is minimal, the overall instability in the area can deter investors from committing substantial resources to a long-term venture. Additionally, the broader [West Asia] conflict further complicates the situation, adding another layer of uncertainty. Addressing these security concerns could require Saudi Arabia to allocate more resources to regional security measures, potentially diverting funds from the NEOM project.

There is no denying that Saudi Arabia’s economic diversification agenda is vulnerable to naval operations in the Red Sea. NEOM and other Red Sea projects require vessels to be able to freely travel from the Gulf of Aden through the Bab al-Mandab and up to Saudi Arabia’s west coast. 

The Gaza war’s potential spillover into this vital waterway continues to raise concerns for Saudi officials about the impact on the Kingdom’s Vision 2030.

These dynamics help explain Riyadh’s frustration with the White House for not leveraging its influence over Israel to negotiate a ceasefire in Gaza. It has led to Saudi Arabia’s decision to abstain from joining any US-led security initiatives and military operations in the Red Sea and Yemen.

The Israel–NEOM connection 

Israel’s geographic proximity to northwestern Saudi Arabia, its technological advancement, and its vibrant startup culture position the occupation state as a promising partner for Vision 2030 and the NEOM project, particularly in biotechnology, cybersecurity, and manufacturing. 

Writing in March 2021, Dr Ali Dogan, previously a Research Fellow at the Leibniz-Zentrum Moderner Orient, went as far as arguing that “relations with Israel are necessary for Saudi Arabia to complete NEOM.” 

Dr Mohammad Yaghi, a research fellow at Germany’s Konrad Adenauer Stiftung, similarly stated that NEOM “requires peace and coordination with Israel, especially if the city is to have a chance of becoming a tourist attraction.”

However, Saudi Arabia’s leadership role in the Islamic world, exemplified by the monarch’s title as the “Custodian of the Two Holy Mosques,” makes any formal normalization of relations with Tel Aviv highly sensitive. 

Initially, it was thought that while the UAE and Bahrain could establish overt relations with Israel, Saudi Arabia would continue to engage covertly, ensuring essential collaborations like those rumored in the tech sector could progress discreetly. 

An example being in June 2020, when controversy arose over Saudi Arabia’s alleged engagement with an Israeli cybersecurity firm, which the Saudi embassy later denied.

Yet, almost seven months into Israel’s campaign to annihilate Gaza, can Saudi Arabia still look to Tel Aviv as a partner in NEOM?

It appears that amid ongoing crises in the region, chiefly the Gaza genocide, Riyadh must be careful to avoid being seen as cooperating with the Israelis in covert ways, and full-fledged normalization seems off the table for the foreseeable future. 

Nonetheless, after the dust settles in Gaza and the Red Sea security crisis calms down, Saudi Arabia will likely maintain its interest in fostering ties with Israel as part of an “economic normalization” between the two countries. This could be important to Vision 2030’s future, particularly in NEOM. 

But Israel’s unprecedented military campaign in Gaza will likely alter West Asia in many ways for decades to come. Even after the current war in Gaza is over, anger toward Israel and the US will continue.

Without a doubt, the Israeli–NEOM connection will be increasingly sensitive and controversial, both in the Kingdom and the wider region – a factor that the leadership in Riyadh cannot dismiss.

The views expressed in this article do not necessarily reflect those of The Cradle.

The ‘Gulf’ widens as GCC states differ on US strategy against Yemen

DEC 27, 2023

Photo Credit: The Cradle

Khalil Harb

The US-led Red Sea coalition’s shaky start reveals the Persian Gulf’s vastly divergent views on the maritime force’s utility, with differences set to intensify as aggressions kick off.

More than a week has passed since US Secretary of Defense Lloyd Austin unveiled the multi-national naval task force Operation Prosperity Guardian to counter operations by Yemen’s Ansarallah-aligned armed forces in the Red Sea to blockade Israel-bound vessels in response to the war on Gaza.

However, the mission’s nature, objectives, and members – including Bahrain – have become increasingly ambiguous. While Manama announced its participation, the absence of fellow Gulf Coorporation Council (GCC) members Saudi Arabia and the UAE raises intriguing questions.

Even Bahrain’s motives are hazy, given that it lacks any naval fleet of military significance, and relies on small vessels and combat forces for its own maritime defenses. As such, skepticism surrounds the extent of the tiny Persian Gulf emirate’s actual military contribution. 

Bahrain has Israel’s back 

One Bahraini opposition leader, speaking to The Cradle on the condition of anonymity, describes Manama’s participation as “the necessity of what is not necessary.” The leader points to Bahrain’s complex loyalties to the US, Saudi Arabia, the UAE, and Israel, in addition to its GCC membership as likely reasons for its odd decision.

The Bahraini government’s stance, especially amid Israel’s genocidal onslaught in Gaza, has shocked many within the country, in spite of its unpopular decision in 2020 to normalize relations with the occupation state. Under pressure, however, Manama did recall its ambassador from Tel Aviv and temporarily suspended economic relations on 2 November – though the Israelis claim they had not been officially informed of the withdrawal of the Bahraini ambassador and say relations between the two countries are stable. 

A well-informed Bahraini source informs The Cradle that this detached position aligns with the government’s policy since signing the UAE-led and Washington-brokered Abraham Accords. The government, he says, has sought to adopt a neutral stance on the Palestinian-Israeli conflict, not recognizing it as a struggle against occupation and overlooking its significance to Arab national security. 

“This policy, first, was expressed by the Bahraini Crown Prince and Prime Minister Prince Salman bin Hamad Al Khalifa, when he described what Hamas has done as a terrorist act, and at the same time condemned the Israeli massacres in an attempt to maintain a neutral center.”

The source further points out that Bahrain’s alignment with Abu Dhabi’s policy reflects a shift towards “the Emirati orbit over the Saudi one.” This is evident in its delayed reconciliation with Qatar, initiated by Riyadh but met with hesitation in Manama. Likewise, the UAE had a slower approach to restoring relations with Doha than the Saudis. 

Submissive stance to US influence

Bahrain has a historical role as a key US military ally since 1995, when it opened large areas of its small territory to establish regional headquarters for the US Fifth Fleet. Today, those facilities include an aircraft carrier, several submarines, naval destroyers, dozens of fighter jets, thousands of American soldiers, and their residential headquarters within this military base, which is considered one of the largest centers of the US military outside the United States.  

According to the aforementioned Bahraini source, the Manama-based US naval force serves as “an advanced American base to carry out Washington’s intelligence and military work in the region, and its presence reflects the latter’s dominance over the political decision in the Kingdom when the need arises.”  

Bahrain is also the headquarters of the Joint Maritime Force, established in 2001 to confront the so-called “threat of international terrorism.” The force includes 39 countries, including Britain, which has established an expanded military occupation on the territory of Bahrain, specifically at Juffair Naval Base since 2018, which represented Britain’s first military base in West Asia in four decades. 

The Bahraini source explains that while the US and UK have all the resources they need in the Persian Gulf to run the new anti-Yemen maritime themselves, what they really needed was Arab cover for these hostile activities:

“In essence, Washington does not need Bahraini forces to secure navigation in the region while it has more than 30,000 soldiers in the  Gulf and it can manage these operations from its various military bases, but it needs Arab cover after many Gulf countries, led by Saudi Arabia and the UAE, rejected Arab and Gulf legitimacy (publicly) for this alliance.” 

It is a risky move for Manama. Bahrain’s participation in the naval coalition is unlikely to yield positive outcomes for the state and could pose threats to its strategic security, particularly if Yemen’s Ansarallah forces decide to retaliate against Prosperity Guardian’s strikes. 

Targeting Bahrain would be “low-hanging fruit” for the Yemenis, not just because it is small and largely defenseless on its own, but also because it hosts bases for leading western aggressors – the US and UK.

As the opposition leader explains to The Cradle:

Manama also “risks facing further isolation and internal separation, given that the people of Bahrain are unanimous in rejecting the Israeli occupation, covering for it, or working to achieve its interests at the expense of the Palestinian people.” 

Bahrain’s decision to participate in the US-led coalition, despite GCC leaders Saudi Arabia’s own refusal over security concerns, only goes to show the extent of Bahrain’s submission to US hegemony and its new ally Israel. Says another Bahraini source:

“There is no justification for Bahraini participation at a time when Saudi Arabia, its major neighbor, for security considerations rejects confronting Ansarallah and maintains its position on the massacres committed against the Palestinians.”

Riyadh’s recalibration 

The absence of Saudi Arabia from the coalition is especially noteworthy. Disillusioned by past US policies, including the Arab Spring and the 2015 nuclear deal with Iran, Riyadh now seems inclined towards a reconciliation with Tehran and has ratcheted up relations with US adversaries Moscow and Beijing, marking a shift in its regional and global strategic considerations.

Rather than deeply engaging in efforts against Israeli aggression or the Iran-led Axis of Resistance, Saudi Arabia appears more focused on dialing down regional conflicts, particularly its own eight-year war against Yemen. The kingdom has welcomed the UN’s road map for peace and Omani-brokered negotiations with Sanaa, indicating a desire to exit the devastating war and shift its focus away from a heavy reliance on US support.

For the Saudis, the ongoing war in Gaza and Yemen’s prominent role in the regional resistance axis present an opportunity to extricate itself from the war against its southern neighbor, in which it is emphasizing a local settlement between Yemeni parties and the Sanaa government led by Ansarallah.

Riyadh showed its direction early, in November, by hosting the Arab-Islamic summit to “dutifully”show solidarity with Gaza without actually taking meaningful action. The Saudis appear uninterested in engaging too heavily in the fracas, whether to halt Israeli aggressions or to confront the “axis of resistance” in whose ranks Yemenis are a vital player. 

Stability after all, is crucial for Saudi Crown Prince Muhammad bin Salman’s Vision2030 and its ambitious projects such as NEOM, Expo 2030, and the 2034 FIFA World Cup, prompting a reconsideration of its involvement in yet another US-led regional aggression that offers little upside. 

UAE’s geostrategic considerations

The UAE, known for its strategic calculations, appears to be treading much more cautiously in the regional confrontation, and is playing a strong role behind the scenes. When Ansarallah threatened sea lanes, the UAE moved to develop a land bridge through Saudi and Jordanian territories to Israel for the transportation of goods from East Asia. 

Although risky for Abu Dhabi to so openly aid Israel’s economy while Tel Aviv imposes a draconian siege on Palestinians in Gaza,  by doing so, the UAE has significantly boosted its economic and political value to the occupation state. In this, the Emiratis have displayed a steadfastness to normalization that could trigger dangerous repercussions should regional confrontation escalate.

Considering the potential backlash, the Emiratis are hesitant to openly support Israel through military naval power, fearing Yemeni and broader Arab and Muslim resentment. Abu Dhabi prioritizes its image as a safe and stable oasis, mindful of Ansarallah’s missile and drone attacks from just a year ago. 

Essentially, the Persian Gulf state aim to avoid jeopardizing their security interests by engaging in ambiguous military actions that could undermine their carefully crafted narrative of stability and progress.

The fate and feasibility of Operation Prosperity Guardian is currently shrouded in uncertainty, particularly in light of recent setbacks and the withdrawal of crucial western allies from participating under a US command. 

The divisions among Persian Gulf states regarding the maritime coalition further highlight a region awakening to the realization that Washington’s dominance is no longer as unassailable as it once seemed. The emerging awareness suggests that Yemen and other members of the Resistance Axis possess the capability to impose a new equation against Israel.

The views expressed in this article do not necessarily reflect those of The Cradle.

Regional Talks to Secure Interests of Gulf Nations: Iran FM Spox

August 21, 2023

Nasser Kanaani, Iranian Foreign Ministry Spokesman.

Iran’s Foreign Ministry spokesman has hailed the “positive atmosphere” created in the region, saying dialogue between regional countries will secure the common interests of all Persian Gulf nations.

“With the positive atmosphere we are witnessing in the region, we are on the path of dialogue and exchange of views, and the next steps can provide the basis for the formation of such dialogues, which can lead to securing the common interests of all parties in the north and south of the Persian Gulf,” Nasser Kanaani said at a press conference in Tehran on Monday.

Pointing to a recent visit by Iranian Foreign Minister Hossein Amirabdollahian to Saudi Arabia, Kanaani said trade issues and the resumption of agreements between the two sides were discussed during the trip.

“It was agreed that the meeting of the joint commission for economic cooperation between the two sides will be activated as soon as possible,” he said, expressing hopes that both sides make progress in this regard.

He also said the Saudi side reiterated Saudi King Salman’s invitation to Iranian President Ebrahim Raisi to visit the kingdom, noting that there is a mutual understanding that the trip will be made at the right time.

‘Iran at forefront of fighting terrorism’

Elsewhere in his remarks, Kanaani pointed out that Monday marks the International Day of Remembrance and Tribute to the Victims of Terrorism, saying, “The Iranian nation is also regarded as a major victim of the sinister phenomenon of terrorism.”

“Iran is at the forefront of the fight against terrorism in the region and the world, and the IRGC is, according to the Supreme Leader of the [Islamic] Revolution, the largest counter-terrorism organization in the world,” he added.

Iran’s blocked assets in South Korean banks

Regarding Iran’s blocked assets in South Korean banks, he said that the necessary agreements and negotiations have been made with the South Korean side, and the implementation process has begun, adding that the Iranian government is doing its best to defend the rights of Iranians and is pursuing this matter seriously.

The release of Iran’s assets in South Korea is taking place despite attempts by the United States to block Iranian properties and assets in other countries through unilateral sanctions; however, through diplomatic and legal efforts by the Iranian government, the United States has had no choice but to comply with Iran’s rights, Kannani said.

World Mosque Day

Kanaani also referred to World Mosque Day, August 21, saying that the Al-Aqsa Mosque – in occupied Al-Quds – as the first Qibla of Muslims is of great importance among Muslims.

He also mentioned World Mosque Day, which falls on August 21, and highlighted the significance of the Al-Aqsa Mosque in occupied Al-Quds.

Iran reacts to Quran desecration

The chargés d’affaires of Sweden and Denmark were summoned to the Ministry of Foreign Affairs in Iran due to repeated insults to the holy Quran in their countries, Kanaani said, adding that Iran has announced that it will not accept a new ambassador from Sweden in protest of the desecration and the lack of serious action by the Swedish government.

The spokesman stated that these countries cannot claim to be peace-seekers while challenging the peace-seeking attitude of religions, noting that they have told Iranian authorities that they are following up on the issue, but Iran will not consider their words as a real determination until it is assured that deterrent measures have been taken by the governments.

The diplomat warned that burning the Quran under the slogan of freedom of expression is not justifiable at all and that the Quran is the deepest and most beautiful expression, so desecrating it under the pretext of freedom of speech is not acceptable by any means.

Iran believes that if there is determination, such insults can be prevented even within the framework of existing laws and these countries are pitching themselves against Muslim countries, he said.

On the basis of resolutions ratified in an extraordinary session of foreign ministers and the missions assigned to the Secretary-General of the Organization of Islamic Cooperation Hissein Brahim Taha, the issue of desecration of the holy Quran will be pursued in a serious manner, Kanaani said, adding that Iran also raised the issue in a conversation with High Representative of the European Union for Foreign Affairs and Security Policy Josep Borrell.

Necessity of frequent visits of Iranian technical delegation to Helmand River

The Foreign Ministry spokesman commented on Iran’s Technical Delegation’s recent visit to the Dehrawud Hydrometric Station in Afghanistan’s Helmand River, saying that the visit demonstrates Afghanistan’s commitment and is part of the agreement on Helmand water.

Kanaani stated that Iran sees this as a first step in good faith and added that to accurately assess the amount of water behind the dam, such visits should be made monthly, as per the agreement between the two countries. This will help determine the average water input.

He also said that negotiations will continue, and it is expected that Iran’s water rights in this region will be measured and granted.

President Raisi’s visit to South Africa for BRICS summit

The spokesman also commented on President Ebrahim Raisi’s upcoming visit to South Africa to attend the BRICS summit, saying that Iran’s cooperation with BRICS and its membership in the organization is important to Tehran, and President Raisi’s attendance at the summit is in line with this goal.

Kanaani also stated that Iran has submitted its request for membership in the BRICS organization and also mentioned that Iran is one of the few countries that has dialogue and cooperation with all BRICS members.

Iran reacts to oil theft by the US

The Foreign Ministry spokesman commented on news stories about Iran’s oil being offloaded near Texas, saying that he has seen such news in the media, but he has not received any confirmed information on the matter.

The official stated that there is a general principle that Iran will not remain passive in the face of any attack on Iranians’ rights and will cut off the hands of the invaders.

Kanaani warned those who plan such plots to remember Iran’s response to similar cases in the past, adding that invading tankers carrying Iranian oil is a clear instance of piracy.

Source: Agencies