Crown Prince Mohammed bin Salman’s ambitious NEOM project has faced financial and public scrutiny, with recent reports revealing that Saudi Arabia’s Public Investment Fund (PIF) secured a $3 billion loan from Italy’s state-backed financial and insurance group. The loan underscores the financial challenges plaguing the futuristic city, which is projected to cost between $500 billion and $1.5 trillion. Critics argue that NEOM symbolizes the Crown Prince’s misplaced priorities, focusing on image-building at the expense of economic sustainability and citizen welfare.
The Financial Strain of NEOM
Initially envisioned as a groundbreaking zero-carbon city powered by artificial intelligence and robotics, NEOM has struggled to secure foreign investment. With many global companies hesitant to participate due to human rights concerns and doubts about the project’s feasibility, the Saudi government has taken on the bulk of the financial burden.
To cover NEOM’s funding gaps, the PIF previously secured a $2.67 billion credit facility from Saudi banks, including Al Rajhi Bank, Riyad Bank, and others. These funds are intended for short-term financing needs as the project continues to face delays. Meanwhile, Saudi Arabia’s public debt has ballooned to 972 billion riyals ($259 billion) as of 2022, with experts warning that NEOM’s financial demands could further strain the nation’s economy.
Criticism of the Crown Prince’s Priorities
Economists and analysts have criticized Mohammed bin Salman for pursuing extravagant ventures like NEOM while neglecting pressing domestic issues. Reports indicate that the Crown Prince’s spending priorities have left many Saudi citizens grappling with rising poverty, inflation, and unemployment. Observers argue that the debt incurred for NEOM risks burdening future generations with financial instability.
Saudi Finance Minister Mohammed Al-Jadaan acknowledged the challenges in funding NEOM, citing a significant financing gap that necessitated scaling back or delaying some aspects of the project. Despite this, bin Salman continues to push forward, framing NEOM as a symbol of Saudi Arabia’s modernization under Vision 2030.
Efforts to Revive Investor Interest
To generate enthusiasm for NEOM, the Saudi government has invested heavily in promotional campaigns, including inviting global influencers to showcase the city. However, these efforts have been met with skepticism. Reports from American media highlight that social media posts about life in NEOM often depict an uninspiring reality, contradicting the Crown Prince’s futuristic vision.
Moreover, there are allegations of coercion and intimidation against influencers who fail to promote NEOM positively. Sources claim that some influencers have been detained and threatened with imprisonment for not publishing sufficient content to bolster bin Salman’s image.
Debt-Fueled Development
NEOM is not the only project contributing to Saudi Arabia’s growing debt. The Crown Prince has pursued a series of high-cost initiatives, from sports partnerships to AI ventures, often funded through borrowing. Critics argue that these projects serve more as tools for international image-building than as drivers of domestic economic growth.
Bin Salman’s reliance on debt to finance these ventures raises concerns about the sustainability of Saudi Arabia’s fiscal policies. As the country’s budget deficit grows, many question whether NEOM and similar projects will deliver the promised returns.
The $3 billion loan for NEOM highlights the financial challenges and controversies surrounding Mohammed bin Salman’s ambitious vision for Saudi Arabia’s future. While NEOM has the potential to redefine urban living, its heavy reliance on debt and the lack of clear benefits for Saudi citizens have drawn significant criticism. As the Crown Prince presses on, the question remains: is NEOM a beacon of progress or an expensive gamble that risks the kingdom’s economic stability?
