The monarchy reevaluates its expansive “Vision 2030” projects, reducing the scope of some while emphasising adaptation to the current economic difficulties. The economic diversification agenda is still under examination eight years after Crown Prince Mohammed bin Salman unveiled the grandiose plan.
Several key projects have undergone modifications and evaluations, according to recent media reports. Notably, the crown prince’s 2022 metropolis project, “The Line,” was once planned to cover 170 kilometres and contain 9 million people. Only 2.4 kilometres, though, are anticipated to be finished soon; the remaining distance may be constructed at a later date.
Launched in October 2017 as the cornerstone of Vision 2030, the USD 1.5 trillion Neom project is also encountering difficulties. According to reports from Saudi economic sources, this metropolitan area’s ambitions have been abandoned in 70% of cases.
Over the past two years, the Kingdom has drastically cut back on its staff in Neom, resulting in a large-scale layoff of international workers, according to an unnamed source who spoke with The Media Line. Other businesses have taken on the local staff, and the project’s scope has significantly shrunk from its initial projections.
These projects are going through a thorough reevaluation, according to economist Raja Al-Hujairi of Jordan, who spoke with The Media Line. She admitted that development would continue in cities like Neom and The Line, but “not in the shape that was initially announced.”
These initiatives greatly surpass Saudi Arabia’s financial capacity, and no nation on earth has been able to carry them out.
Al-Hujairi added that the projects’ main goal in announcing them was to draw big investments to Saudi Arabia.
“However, these projects are obviously much above Saudi Arabia’s financial means; no nation in the world has been able to carry them out, and Saudi Arabia will not be able to either,” he said.
According to Saudi Arabia’s Finance Minister Mohammed Al-Jadaan, the country is not “arrogant” about modifying the scope of its massive projects under “Vision 2030” in response to evolving conditions.
“The Kingdom will adjust to the current economic and geopolitical circumstances and will endeavour to ‘reduce’ or ‘accelerate’ some of the projects being undertaken within the framework of the Vision 2030 programme,” Al-Jadaan noted.
Meanwhile, Saudi Arabia intends to build 230,000 hotel rooms, thousands of kilometres of train links to connect its cities and with other Gulf nations, and 11 new stadiums spread over 10 cities to host the FIFA World Cup in 2034.
In the first quarter of 2024, Saudi Arabia received USD 2.53 billion in foreign direct investment, up from USD 19.3 billion in 2023. This is still less than the USD 30 billion in investments that the United Arab Emirates, its rival, has drawn in.
These numbers are less than the lofty goals of Vision 2030, which called for yearly investments of more than USD 40 billion.
Noting that “Dubai has always announced large projects such as the Burj Khalifa and other giant projects, but they were more realistic and were able to achieve them,” Al-Hujairi blamed competition with the United Arab Emirates. Saudi Arabia was unable to carry out the larger projects that it desired.
Another “Vision 2030” initiative that is being considered is the resuscitation of the Saudi Football League. According to reports, the monarchy has used the Public Investment Fund to spend more than USD 2 billion over the last two years to entice foreign investors.
“Reexamining projects and their feasibility is flexibility and an advantage in the economy, not a weakness,” Saudi economic consultant Mohammed Al-Abdullah told The Media Line.
He emphasised that the COVID pandemic had not yet taken its toll and that the world economy had changed by the time the Neom project was revealed in 2017.
Al-Abdullah went on to say that several significant Saudi projects are bound to change as a result of changes in the world economy. He stressed that while still ongoing, initiatives like Neom, The Line, Qiddiya, and Riyadh Square are being reevaluated in light of fresh information.
According to The Media Line, Fahd Al-Yousef, a former project manager for real estate in the Kingdom, “Real estate patterns have altered, and the Saudi government is now focusing on new global economic trends.”
Al-Yousef said that postponing some projects makes sense, particularly in light of how important it is to get ready for the 2034 World Cup.
He was confident that the world would see Saudi Arabia’s transformation when it hosted the World Cup in 2034, which would encourage more investment and the completion of all of the country’s initiatives.
The Saudis will just rearrange and plan the execution dates of their projects, instead of giving up on them. Reprioritising the Saudi economy is a positive thing, according to Al-Yousef.