The (final) Saudi century?

Breathless accounts of MbS's vaunting ambition don't take account of what is really happening in Saudi Arabia

Let’s start this post with a little live OSINT investigation. Readers will probably be familiar with the concept of OSINT (open-source intelligence). Journalistic networks such as Bellingcat and a whole host of Ukraine-focused sources have achieved amazing results drawing on openly available information to debunk official Russian disinformation, or prove the presence of certain military units at a particular moment. If you look up Neom - the Saudi megacity project spearheaded by Crown Prince Muhammad bin Salman (MbS) you find all kinds of exciting images online, including a video proclaiming Neom is Real. When an authoritarian government feels the need to tell you that a city is “real”, it is reasonable to wonder if in fact the opposite is the case. And the answer to that question tells us a lot about the crisis in MbS’s Saudi Arabia.

Rather than rely on a flashy promo video, much of which appears to be CGI footage rather than pictures of an actual city, the OSINT analyst should look for unfiltered data. A good place to start is Google Earth’s brilliant Explore New Satellite Imagery Tool which shows the latest satellite captures and the date of the images. Click on this link and zoom into the bit of Saudi Arabia where the Gulf of Aqaba meets the Red Sea. This is the proposed site of Neom and thanks to Google Earth we can see that the area inside the boxes has the most recent satellite imagery, allowing us to get a good sense of whether Neom is, in fact, “real”.

Thanks to Google Earth we can get imagery of Neom taken on 27-30 April 2023

Zoom a bit closer to the ground and you’ll find that there is very little actual Neom in existence. A few isolated resorts and a golf course. No evidence of human habitation, or economic activity. Certainly not what could be called a city. The video promises direct flights from London to Neom on Saudia airlines. Again, a quick online search demonstrates that these direct flights are not in fact available.

Can anyone find Neom in this desert??

A photo shared online from January 2023 shows a lonely filling station and a couple of fast-food joints, near to an encampment of shipping containers, a familiar sight to anyone who has visited the Gulf, used to house mostly South Asian migrant workers. The existence of the small camp shows that some construction work may be underway, but there is no evidence of a city being built. Neom is supposed to be a “start-up the size of a country”, with giga-projects such as The Line - a dystopian 170km city which, for no obvious reason, is only 200 metres wide, making all of its elements stretched out and unnecessarily distant (thanks to Google Earth you can confirm that The Line remains happily fictitious, no more than an architectural fever dream).

Why does this matter? Because the fake city of Neom is emblematic of a much bigger fake - the myth of Saudi Arabia’s rise to global power, led by its ambitious, ruthless mastermind MbS and powered by limitless oil money. In an excellent cover article in the New Statesman, How Saudi Arabia is Buying the World, Quinn Slobodian explains that, in a period of scarce capital with high interest rates in most of the world, the Saudis find themselves with an unusual opportunity to set a global economic agenda on their own terms. Western countries, from the UK, to the US and Italy, are lining up to beg for the Saudi petrodollar, whilst promising not to mention inconvenient things like the murder and dismemberment of dissident journalist Jamal Khashoggi on the instructions of MbS.

Where I differ from Slobodian is in the gap between rhetoric and reality, between flashy YouTube video and unsparing Google Earth imagery. To be fair to Slobodian, he himself calls out the degree to which people make money from puffing up these fake projects, with the pithy line “[t]he first rule of the gravy train is you don’t ask why the gravy keeps coming.” Star architects who have bravely rationalised their dislike of feeding bodies into incinerators, public beheadings and mass starvation in Yemen, along with other inbuilt features of MbS’s Saudi Arabia, don’t need to worry if their crazy designs will ever be built. They can earn astronomical fees dreaming up improbable cities, indifferent to whether a team of mistreated Asian migrant workers may at some future point be killed in their construction (around 10,000 migrant construction workers die every year in the Gulf region, according to FairSquare, an NGO).

It ain’t Call of Duty

At the heart of all of these discussions is the personality of MbS himself. Undoubtedly, he has achieved a centralisation of royal power in his own hands where it was previously distributed among a set of brother-princes. This is seen as evidence of strategic genius, although it reflects little more than a willingness to be ruthless with his uncles and cousins in a system that used to treat the most senior royals with kid gloves. Those that know MbS personally will explain privately and quietly, that he grew up playing video games and eschewed the traditional international elite educational institutes favoured by his siblings and cousins. He remains happiest in the company of his gamer buddies and the simplistic violence of the video game is easily discernible in his approach to governance.

The idea of MbS as a ruthless strategist is one that he has successfully promoted, through a series of supposedly unofficial biographies, profiles and documentaries, most of which were subtly guided by the prince’s paid media advisers. But it is an idea that simply does not stand up to analysis. In the field of foreign affairs MbS has had a succession of disasters: the failed blockade of Qatar; the failed war in Yemen; the failed kidnapping of the Lebanese Prime Minister and most notoriously the murder and dismemberment of Khashoggi. From the perspective of someone playing Call of Duty - Black Ops, the Istanbul murder probably looked like a success. Back in the real world it fatally undermined the Saudi relationship with the United States. In the short term, this hasn’t had much impact on the Saudis, enjoying relatively high oil prices and an America preoccupied with Russia and China. But the Saudi security relationship with the Americans dated back to 1945 and a meeting between Franklin Delano Roosevelt and MbS’s grandfather, Ibn Saud. If MbS were thinking in the timeframes used by his father’s generation, he would probably have been less inclined to dismiss the United States, which came to the Saudis’ rescue in 1991 when an invasion by Iraq looked possible, It is now a lot less likely to do so next time an existential threat faces the kingdom.

The same video-game mentality applied to domestic policy has resulted in the Vision 2030 concept. In this, the Kingdom of Saudi Arabia seeks to diversify its economy away from the hydrocarbon sector whilst rapidly expanding its Public Investment Fund (PIF). This is where so-called ‘gigaprojects’ such as Neom come in: the idea is to drive new sectors and growth in an economy that has been stubbornly dominated by hydrocarbons throughout the history of the country. But the unbuilt, largely fictitious Neom is no exception: Vision 2030 is way off-track. None of the key milestones are likely to be met.

The simple truth is that Saudi Arabia is not a place where it is easy to get things done quickly. Whilst I am not in the business of sympathising with someone like MbS, it is likely that he has been discovering this the hard way. Anyone who has worked in Saudi Arabia will know of the months it will take for something simple to be commissioned, like a straightforward project for a central government ministry. Talk to anyone who has years of experience of working in the Kingdom, and they will regale you with tales of delay, stasis and uncertainty, all the while chasing seemingly limitless opportunities. Mega-projects rarely happen.

For an illustration of the fact that this is a not a new phenomenon, take a look at the excellent 2012 novel by Dave Eggers A Hologram for the King which became a 2016 Tom Hanks film. As far back as 2005, as Slobodian reminds us, then-king Abdullah, also seen as a reformer, albeit of a very different generation, proposed the “Future Economic Cities” project. In case anyone thinks that Neom is a radical new concept, these six cities were touted as “the largest projects of their kind in the world”, a “radical approach” that would kick-start the diversification of the Saudi economy away from the hydrocarbon sector. Readers will not be surprised to learn that none of these cities were built at any sort of scale that reflected the original plans and none of the dreamed-for industrial transformation occurred. Nonetheless, architects and consultants will have done very well from it all.

For years, Saudi Arabia has been able to divine it’s biggest problem - a massive over dependence on a finite resource with an economy that has next to no dynamism outside the extractive sector, in a country with a rapidly growing population. From 1980 - 2010, the Saudi economy barely grew in GDP/capita terms, in a period where Norway, the archetypical democratic petrostate, grew consistently. Norway is relevant here because of its famous sovereign wealth fund that is now large enough to manage a transition away from hydrocarbons as the main source of income for the Nordic nation.

The boring professionalism of the Norwegian sovereign wealth fund (largest holdings: Apple; Microsoft; Google) contrasts with the flashy faddishness of the PIF (largest holdings: Lucid Group - an EV company that has never successfully made a production car or turned a profit; Activision Blizzard - which makes video games which MbS likes to play; Electronic Arts - which also makes video games…). In earlier years some of the PIF’s largest investments were with Softbank’s Vision Fund, which succeeded in turning initial capital of $200 billion into $138 billion by May 2023, an investment performance worthy of Donald Trump.

It turns out that buying things that are of personal interest to MbS may not prove to be a very successful investment strategy. Nevertheless, the PIF has branched out into sporting investments, following the model set by regional neighbours the United Arab Emirates and Qatar, both of which have lavished billions on football teams and hosting sporting events. These ‘investments’ work as promoters of national reputation and influence (although Qatar learned the hard way that hosting a World Cup may also expose you to unwanted scrutiny). But it is very unusual for the ownership of a sport team to bring in actual profit. The PIF’s purchase of Newcastle United may have improved the reputation of the Kingdom in the northeast of England and revived the fortunes of that struggling team, but it isn’t reasonable to expect it to generate revenues that will help Saudi Arabia replace the oil and gas industry, as any football club owner would be able to tell MbS. In a similar vein to the video game investments, the purchase of the PGA golf tournament is largely driven by the personal interest of PIF governor Yasir Al-Rumayyan in the game of golf. Time will tell if it proves a surprising money-spinner for the kingdom.

Do we still need oil?

When I first started working on Middle East issues in the late 1990s, the talk was of whether the Saudis would come up with an economic plan for “when the oil runs out”. In the event, this isn’t the problem: what will run out is the world’s demand for oil and related products. The current rate of progress towards net zero feels painfully slow, but the extreme weather events of 2023 so far, including temperatures in the Gulf region that render it uninhabitable by humans, will change the calculus. It is pointless for Saudi Arabia to develop a tourism industry if catastrophic climate change means it is no longer possible to spend time in the country for much of the year. However, in a net-zero scenario, Saudi Arabia’s energy revenues shrink to a fraction of their current level. There are no good options for the Saudis. This is particularly important if we take a timespan that relates to MbS’s own age: as effective ruler now at 37 years, he is very likely to be in control in 2050, at which point the global market for Saudi oil will be insufficient to support the kingdom’s economy. Video games aren’t going to pay for the loss of trillions of dollars of revenue.

This is why I don’t buy the idea of a ‘Saudi century’. There’s a current Saudi bubble, helped by MbS’s friend Vladimir Putin and his war on Ukraine. But that isn’t any kind of long-term situation. If there was serious evidence of a sustainable, professional investment strategy and real economic transformation, things might be different. But the science-fiction that is Neom is a reminder that this is an opportunistic grift: a lot of people are getting rich planning a city that will never be built. In the long run, the people that pay the price will be the Saudi Kingdom’s subjects: unlike Norwegian citizens, they have no influence on how their rulers invest their patrimony. But they will still have to live with the consequences.