Saudi Arabia’s sovereign wealth fund plans to transform a 200-kilometre area of Red Sea coastline, twice the size of Belgium, into a luxury resort.
The Public Investment Fund of Saudi Arabia (PIF) will provide initial investment to The Red Sea Project that will create 35,000 jobs, according to a prospectus of the project. The project is part of the kingdom’s Vision 2030 economic development plan that seeks to reduce the reliance on oil and diversify the economy. The plan considers tourism as a key area to develop.
“The project aims to attract the world’s leading names in the tourism and hospitality sectors to harness its expertise, competencies and financial investments to enrich the experiences of this destination, provide more value to its visitors and maximise the economic gains of the Kingdom,” says the state body Saudi Press Agency.
The development will stretch across more than 50 natural islands between the cities of Umluj and Al-Wajh, just a few kilometres from one of the kingdom’s protected reserves and extinct volcanoes in Harrat Al-Rahat area.
Foundations will be laid in the third quarter of 2019 with the first phase completed in the final quarter of 2022. At this stage the development will include an airport, port, hotels and luxury residences, infrastructure, and transport services.
While the PIF will fund the initial stages of the project, it then hopes to partner with leading international companies.
Saudi Arabia is renowned for its stringent enforcement of Islamic law, its codes of behaviour and dress, and severe penalties for homosexuality, extra-marital sexual relations and possession of alcohol. Until recently, women were not allowed to drive. Getting a visa is far from easy.
Bringing tourists to Saudi could transform a tourism industry that relies almost solely on Muslim pilgrims visiting holy shrines in Mecca and Medina. But past mega-projects to diversify the economy have struggled to get off the ground, and questions are likely to be raised over how acceptable the plan is to the kingdom’s influential religious establishment.
The project suggests that it could become a semi-autonomous area governed by independent laws and a regulatory framework developed and managed by a private company. So it could ease strict rules applied elsewhere in Saudi Arabia.
The project will be a centre for recreation, healthcare and relaxation and includes development of an airport, seaport, hotels and luxurious apartments.
It could be a “if we build it, they will come” tourist project or a “white elephant”.
Much will depend on being able to attract international partners and hoping that there is not a backlash from the religious and Saudisation lobbies.