With Red Sea mega-city, Saudis eye economic unity with Egypt, Jordan

“If they are really going to develop this in desert areas of all three countries, you’d expect Israeli technology perhaps to have a role to play."

By BEN LYNFIELD
Updated: MARCH 14, 2018 04:46
Building Red Sea mega-city, Saudis eye economic integration with Egypt, Jordan, March 13, 2018
To observers, Saudi Crown Prince Muhammad bin Salman Al Saud’s flagship idea may seem overly ambitious – to build a mega-city known as Neom along the Gulf of Aqaba and the Red Sea that extends across the borders to Jordan and Egypt.
Indeed, its proponents are describing the planned 26,500 square kilometer city in almost messianic terms. “Neom is positioned to become an aspirational society that heralds the future of human civilization by offering its inhabitants an idyllic lifestyle set against a backdrop of a community founded on modern architecture, lush green spaces, quality of life, safety and technology in the service of humanity paired with excellent economic opportunities,” says Neom’s website.
That may be overstating Neom’s significance, but the project, which is yet to get under way, promises to be extremely important – not only for Saudi Arabia but for the region as a whole. For Riyadh, it is a central component of plans by Muhammad to ween the kingdom off of its dependence on oil exports and diversify the economy by emphasizing, for example, knowledge-based industries. Egypt and Jordan are reacting with enthusiasm to the plan, hoping it can give a boost to their depressed economies.
While Muhammad was in Egypt last week, the two countries set up a $10 billion joint fund to develop the Egyptian side of Neom. Egypt has reportedly earmarked more than a 1,000 square kilometers in southern Sinai for the project. As part of economic integration the two countries are planning to build King Salman Bridge, linking them across the Gulf of Aqaba.
Mohab Mamish, chief of the Suez Canal Development Authority, is touting the northeastern Egyptian city of Ismailia as the gateway for the Neom project, Emirati daily newspaper The National reported last week.
Meanwhile, Jordanian officials are in the midst of discussions with their Saudi counterparts to identify projects to be implemented in Aqaba as part of Neom, The Jordan Times reported on Saturday.
In a related development, Reuters reported on Saturday that Saudi Arabia will work with Egypt and Jordan to attract European cruise companies to operate in the Red Sea during winter season. The report said that Riyadh is negotiating with seven such companies and plans to build yacht marinas.
In the view of Yoram Meital, an Egypt specialist at Ben-Gurion University in Beersheba, Neom “is seen by [President Abdul-Fattah] al-Sisi as a new space for more cooperation, for creating more Egyptian employment.”
“The idea of building a bridge, and around the bridge a modern commercial industrial zone, is seen by Egypt as a potential major boost,” he said.
For the Saudis – and for the Arab world – the economic integration would be a new departure. “The scale is unprecedented; and if it happens in the way that’s being discussed it would create a more integrated relationship among Egypt, Jordan and Saudi Arabia than in the past, and that’s new,” said Brandon Friedman, a Middle East specialist at Tel Aviv University’s Moshe Dayan Center for Middle Eastern and African Studies.
But, Friedman added, leveraging its economic wealth to cement its influence has been a long standing component of Saudi policy. In the past it took the form of aid or loans; now Muhammad “is trying to directly link the economies of Egypt, Jordan and Saudi Arabia.”
“The Saudis see increased economic health for Egypt and Jordan as being in their own security interest,” Friedman said. “The more vulnerable Egypt and Jordan are, the more difficult it potentially [becomes] for the Saudis to stabilize the region. They are trying to create more dynamic economies in Jordan and Egypt as a means to creating a stronger, more stable moderate Sunni bloc in the region.”
Neom’s progress should be followed closely by Israel, especially since some of the sectors planned for the mega-project coincide with areas of Israeli expertise: energy and water, biotechnology, advanced manufacturing, and technological and digital sciences.
“Depending on how the project evolves and how Saudi relations with Israel evolve, given Israel’s relations with Egypt and Jordan, there is potentially a role for Israeli economic integration,” said Friedman. “If the Israeli-Saudi relationship revolves around its current trajectory, it would be natural to assume that at some stage there would be Israeli integration.
“If they are really going to develop this in desert areas of all three countries, you’d expect Israeli technology perhaps to have a role to play,” Friedman said.