Saudi Arabia to build new $500B city

Could Saudi's new 'NEOM' overtake Dubai?
October 28, 2017 09:00AM

(Alan Chia)

This week Saudi Crown Prince Mohammed bin Salman announced his government would be building a new city named NEOM to offer residents a different lifestyle — and legal code — than the rest of the country.

Spanning 10,000 square miles, NEOM will be located in the north west end of the country with parts of the new city spilling into neighboring Jordan and Egypt. The Saudi government has committed to $500 billion in financing and announced the city’s development will be driven by additional investors.

For London School of Economics professor Steffen Hertog, NEOM is a larger version of free zones which have been most successfully implemented in Dubai; these areas allow businesses to function according to different tariffs, regulations and laws.

“In Dubai, this has worked well, but attempts to copy it have done less well in the region,” he told Bloomberg News. “If [NEOM] is to be an international hub, it needs to offer something better than Dubai, which is a high bar to cross.”

The announcement of NEOM comes amid a series of new initiatives launched since bin Salman’s rise to power.

[Bloomberg News] — E.K. Hudson