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

APR 25, 2024

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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.

Question in Beirut: Will the Syrians, Saudis, Iranians strike a new Lebanon deal?

FEB 22, 2024

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The visit of former Lebanese PM Saad Hariri to Beirut has tongues wagging. Will the impetus of the expanding Gaza war force a Saudi–Syrian settlement that can once more impose stability in Lebanon?

Photo Credit: The Cradle

Malek al-Khoury

The visit of former Lebanese PM Saad Hariri to Beirut has tongues wagging. Will the impetus of the expanding Gaza war force a Saudi–Syrian settlement that can once more impose stability in Lebanon?

On 21 February, a Syrian website, citing sources in Damascus, broadcasted news that Saudi Crown Prince Mohammed bin Salman (MbS) would shortly pay a visit to Syria, causing an uproar in regional political circles. Despite government-aligned newspaper Al-Watan denying the report, the prospect of a top Saudi visit evoked memories of an era past when Syrian–Saudi understanding secured Lebanon’s internal balances, which are shaken or resolved based on the tempo of West Asia’s hegemons and the status of their relations with one another.

عاجل – مصدر سوري مطلع لـ"الوطن": لا يوجد أي شيء رسمي حول زيارة محتملة لولي العهد السعودي الأمير محمد بن سلمان إلى سورية.

— جريدة الوطن (@alwatan_sy) February 20, 2024

A decisive response to rumors of an impending MbS visit remains elusive. A Syrian diplomatic source would only confirm to The Cradle that “Syrian–Saudi communication is gradually developing, and the discussions have become more detailed about the mutual common interests of the two countries” concerning the “post-war scene in Gaza.”

While the source did not deny or confirm Bin Salman’s visit, he suggested that the development of communications might reach the stage of “mutual visits” not only with Saudi Arabia “but also with Egypt.”

While the improvement in relations between Syria and Arab states is not limited to Saudi Arabia, discussions with Riyadh have become more significant recently – to the extent that an Arab foreign minister, believed to be the Emirati FM, made an effort in mid-February to persuade members of the US Congress to retract its Syrian boycott law, which US-based anti-Syria activists insist on upholding. A source tells The Cradle that these activists “train with a US agency, alongside the Iranian opposition, on formulating and marketing these lobbying projects and forming pressure groups” to halt any policy reversals in Washington.

But the discussion about reopening relations with Damascus is no longer only taking place in Arab corridors. Cypriot President Nikos Christodoulides, in an announcement following talks last week with his German counterpart Frank-Walter Steinmeier, revealed “the work of the Republic of Cyprus in cooperation with other member states” to advance European–Syrian ties. 

The EU, in general, shares that view about opening up member-states’ relations with Damascus, in discussions which the Syrian source says are also progressing, especially in the matter of identifying “the parts of Syria that are sufficiently safe” for the return of refugee populations.

On 16 February, on the sidelines of the 60th Munich Security Conference in Germany, Turkish Foreign Minister Hakan Fidan met with EU Foreign Affairs Chief Josep Borrell to discuss several regional issues, including Syria, reports Anadolu Agency, which quotes Turkish Foreign Ministry sources as saying “both sides” stressed the need to involve Damascus “in the political process.”

As for the Americans, the White House is engaged in difficult negotiations with many Arab states “in search of a diplomatic achievement” for the Joe Biden administration as his re-election campaign heats up. Washington is busy seeking mechanisms to consolidate its interests in West Asia within the significant barriers created by the Chinese-brokered Saudi–Iranian rapprochement agreement, which, for the US, has been maddeningly stable thus far. Indeed, Saudi Foreign Minister Faisal bin Farhan went to bat in Munich for his “Iranian neighbors,” saying the Iranians “do not want escalation in the region.”

As US–Iraqi negotiations over US troop withdrawal pick up pace, a Syrian source tells The Cradle that an American delegation “visited northeastern Syria, to discuss the possibilities of maintaining a US presence there in the event of withdrawal from Iraq.” Interestingly, the head of Iraq’s Popular Mobilization Units, Faleh al-Fayyad, visited Turkiye on 20 February to discuss “the future of the process of securing the borders from Kurdish organizations in the event that the US–Iraqi negotiations lead to the dismantling of the US military bases and the retention of officers as advisors only,” according to an Iraqi journalist source.

Where does this leave Lebanon?

There is no doubt that the recent Beirut visit of former Lebanese Prime Minister Saad Hariri – who currently resides in Abu Dhabi, which enjoys friendly relations with Syria – resonated deeply in Lebanon. It was viewed as a harbinger of the return of “Hariri-ism,” which comes laden with regional political settlements and top-level shuttle diplomacy – and reflected a tacit sign of new Saudi approval.  

During his visit, Hariri spoke in the language of his father – former Lebanese Prime Minister Rafik Hariri, assassinated in Beirut on 14 February 2005 – about “peace and stability” in Lebanon and its neighborhood, and even invoked, during an interview with Saudi news channel Al-Hadath, his father’s key political role in Lebanon’s civil war in paving the way to the Saudi-brokered Taif Agreement that settled the 15-year conflict.

It is important to note that Riyadh–Hariri relations have been estranged for years – unlike the close Saudi relations his father enjoyed. Tensions between them grew during the war in Syria, with Hariri’s inability or unwillingness to curb Lebanon’s Hezbollah from defending the Syrian state from a Saudi-backed war.

While Hariri said during his Beirut stopover that the time was not yet ripe for him to return to Lebanon’s muddy political arena, he offered his “intervention” if he “felt that the Sunni community in Lebanon was leaning toward extremism.” Many have linked his comments to the trial of 84 civilians in the UAE last week, charged with membership in “Muslim Brotherhood” (MB) organizations – a group banned in the UAE – as well as Turkiye’s remarkable withdrawal of MB leading figure Mahmoud Hussein’s citizenship amidst Ankara’s thrust to mend ties with Abu Dhabi.

A Lebanese source who accompanied Hariri on his visit hints to The Cradle that “concern over the Muslim Brotherhood may pave the way for the return of Hariri’s relations with Syria.” In other words, the former PM could gain support from the anti-MB Saudis, Emiratis, and Syrians if he toes this political line within Lebanon. Interestingly, a Lebanese figure close to pro-MB Qatar attacked Hariri immediately upon his arrival at the airport via X (formerly known as Twitter).

Regional winds appear to be shifting direction, in large part because the Gulf’s traditional “guarantor” of security, the United States, is knee-deep in fanning an untenable crisis by unconditionally supporting Israel’s assault on Gaza. In Munich, Egyptian Foreign Minister Sameh Shoukry sought a “Palestinian consensus” that would pave the way for a “two-state” settlement, in which, according to him, Hamas is excluded. The Arab–Islamic consensus is currently seeking a long-term Palestinian solution after the dust in Gaza settles, which would necessarily include luring “Hamas” and “Fatah” into a national consensus government.

In Beirut, former President Michel Aoun senses this consensus and has made a show of opposing any links of “Lebanon’s fate to Gaza.” Aoun, who once opposed the Taif Agreement, awaits the opportunity to oppose it again. This is, of course, a domestic play mainly to ensure the country’s minority Christian voice is heard in whatever political arrangements lie over the horizon. 

But Gaza remains unavoidable in Lebanon, with Israel waging war against Hezbollah on the country’s southern border, which reached 45 kilometers into the country this week when Tel Aviv struck civilian sites near Sidon. The Gaza war is now being played out in multiple theaters – in Lebanon, Syria, Palestine, Iraq, and Yemen – and has the potential to expand and deepen further. It is this war waged by Israel and its US ally that is rapidly drawing Arab states to recalibrate the region’s direction from within and amongst themselves. 

This begs the question now frequently heard in Beirut: What if Damascus, Riyadh, and Tehran agree this time? Everyone is waiting for that moment to reserve their seats in West Asia’s latest theater.

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

What Just Happened In Jordan?

By Andrew Korybko

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Last weekend’s arrest of several prominent people in Jordan, including the unofficial house arrest of former Crown Prince Hamzah, on suspicion of conspiring to destabilize the country in possible coordination with foreign intelligence agencies is more than likely a preemptive security operation aimed at thwarting a latent threat and not an urgent response to what some have feared was an imminent regime change attempt.

An Unexpected Conspiracy In The Heshemite Kingdom

Jordan is one of those few countries that’s friends with everyone and enemies with no one, which is why the world paid attention last weekend after the arrest of several prominent people on suspicion of conspiring to destabilize the country in possible coordination with foreign intelligence agencies. This included the unofficial house arrest of former Crown Prince Hamzah, who subsequently released footage of himself condemning alleged corruption in the monarchy that he claimed was responsible for worsening his citizens’ living standards, after which he pledged loyalty to King Abdullah II to de-escalate the crisis (presumably while under pressure). Former Crown Prince Hamzah had also reportedly met with some tribal leaders who’ve purportedly been unhappy with the stagnant – if not, according to some accounts, gradually deteriorating – socio-economic situation in the Kingdom. Amman has since banned all coverage of this palace scandal on traditional and social media in an attempt to quell the uncertainty that it provoked in this so-called “oasis of regional stability”.

A Saudi, “Israeli”, Or Joint Saudi-”Israeli” Coup Attempt?

These fast-moving developments prompted a lot of speculation about what might really be going on behind the scenes, especially concerning the possible role of foreign intelligence agencies. It can’t be known for sure, but it doesn’t seem like there was any imminent regime change attempt that was thwarted at the last possible minute by the security services. Rather, it appears to be the case that the government staged a preemptive security operation after finally obtaining enough indisputable evidence that something foul was afoot, hoping to nip this latent threat in the bud long before it blooms. Some have suggested that the connections that two of the detained individuals have with Saudi Arabia hints at Riyadh’s covert involvement in recent events. Others, meanwhile, saw a hidden “Israeli” hand behind everything due to the Mossad ties that the businessman who reportedly offered to fly former Crown Prince Hamzah out of the country is alleged to have. It’s unlikely, however, that those secretly allied governments played any significant role in what just happened in Jordan.

Interpreting The Reported Foreign Intelligence Connections

It’s an open secret that foreign intelligence agencies, especially those based and/or active in the Mideast, cultivate a broad network of agents, informants, and “useful idiots”. Neither Saudi Arabia nor “Israel” have any serious problems with Jordan that can’t be amicably resolved, and therefore wouldn’t benefit from a destabilizing regime change in the neighboring kingdom between them. It’s therefore likely the case that while both of their intelligence agencies probably at least have some indirect presence close to the Jordanian royal family, they each lack the strategic motivation whether unilaterally or jointly with one another to overthrow King Abdullah II. In all likelihood, they might have been aware of former Crown Prince Hamzah’s recent meetings with increasingly unhappy tribal leaders and perhaps even his speculative resentment at being passed over for the throne by the current King in favor of the latter’s son in 2004, but it’s doubtful that they sought to operationalize this in any way. They likely only observed and monitored it, that’s all.

A Possible Disruption To The “Phased Leadership Transition”?

This brings the analysis around to discussing the domestic situation in Jordan. Many people are reportedly unhappy with everything there, and have allegedly been so for quite a while already, but the majority of the population is also loyal to the royal family and doesn’t seem to harbor any serious aspirations of replacing it with a republican form of government or any other. Like all monarchies, Jordan will inevitably undergo a “phased leadership transition” one way or another when power is transferred from the current King to his successor at some point in the future, but it’s here where the security services might have feared that a speculatively resentful former Crown Prince Hamzah might try to make a last-ditch move in an attempt to reassert what he and his unclear network of supporters (likely a combination of civil society elements, tribal leaders, and perhaps even some members of the royal family) believe is his rightful claim to the throne. They therefore probably acted preemptively in order to thwart that scenario before it had a chance to materialize.

Concluding Thoughts

As it stands, Jordan’s stability doesn’t seem threatened. Palace intrigue is normal in any monarchy, just like intrigue between members of a democracy’s permanent military, intelligence, and diplomatic bureaucracies (“deep state”) is too, but it was nevertheless unexpected that something so dramatic took place in Jordan last weekend since few thought that such intrigue had became so intense to warrant such a high-profile security response. At the very least, former Crown Prince Hamzah’s reported closeness with increasingly frustrated but also supposedly influential tribal leaders was a cause of serious concern for the Kingdom’s security services since they feared that it represented a latent regime change threat which might materialize in the midst of the inevitable “phased leadership transition” from King Abdullah II to his son sometime in the future. There might even be a bit more to it than just that, but it’s extremely unlikely that any such speculation will ever be confirmed. For now, King Abdullah II doesn’t seem to have anything to worry about except for the economy.