saudis building $500b mega-city

saudis building $500b mega-city

DUBAI: The International Monetary Fund has endorsed an ambitious Saudi Arabian plan to build a $500-billion business and industrial zone extending into Jordan and Egypt, saying the project could benefit the whole region. Jihad Azour, head of the IMF’s Middle East department, said Riyadh would need to balance the huge cost of the zone and other economic projects with its drive to cut a big state budget deficit caused by low oil prices, reports The Business Standard.
But the plan to develop the zone, known as NEOM, could stimulate trade and allow the Middle East to capitalise on its location as a bridge between Asia and Europe, Azour said in an interview. “It is a signal that greater regional cooperation is back on the table,” he said. “We see value and necessity in regional cooperation.” The NEOM scheme, unveiled by Saudi Crown Prince Mohammed bin Salman at an international conference in Riyadh last week, would develop industries such as energy and water, biotechnology, food, advanced manufacturing and entertainment in a 26,500-sq-km (10,230-sq-mile) zone with its own laws and judicial system. The project has been welcomed by Jordanian officials but so far there has been little public response from the Egyptian government, a diplomatic ally of Saudi Arabia.

Riyadh has indicated that a great deal of the massive value of the region will be borne by the Saudi government, but a large, even though undisclosed, portion would come from home and international non-public investors. Azour said fundamental private quarter participation would be vital for NEOM’s success, with the Saudi authorities supplying land and rules rather than making an attempt to be intently concerned in most funding decisions.
Governments in the vicinity are beginning to seem outwards again after having spent the past 5 or six years targeted on coping with political instability and a plunge in oil prices, he added. “Authorities in a range of international locations are now reassessing more and greater the want to do reforms and initiatives to grow faster and to address the difficulty of job creation.” NEOM could match in with two different international monetary schemes, Azour said: the Belt and Road Initiative, Beijing’s power to win change and investment deals alongside routes linking China to Europe, and the G20 Compact with Africa that targets to promote non-public funding throughout the continent.