BY LAUREN SILVA LAUGHLIN 

Saudi Arabia was offering drafts of Kool-Aid in the desert this week. The vision of the crown prince, Mohammed bin Salman, for a $500 billion mega-city may have generated even more buzz than the mooted IPO of oil behemoth Aramco, bullishly pegged to be worth $2 trillion. But any kind of success depends on people wanting to do business and live there.

Unveiled before an audience of international bigwigs attending the Future Investment Initiative, the ambitious project, dubbed NEOM, involves forward-looking ideas like building a bridge linking Asia with Africa, funding biotech research, using renewable energy and deploying cutting-edge technology like sea-water farming. The SoftBank Vision Fund, backed by Masayoshi Son’s Japanese company and Saudi money, is supporting the plan. The Russian Direct Investment Fund is also interested, according to news reports on Thursday.

The vibe from the Ritz-Carlton in Riyadh is that the kingdom could be at a turning point. Yet seen from 8,000 miles away, that seems far too optimistic. The young crown prince talks frankly about reforms he wants and needs to enact – at least within NEOM’s boundaries. But he’s pushing against the fabric of a conservative absolute monarchy, of which he is also part. King Salman only just decreed that women should be allowed to drive cars, and they remain restricted in many other ways. The government doesn’t allow the practice of religions other than Islam, according to the U.S. State Department. Last year a journalist was jailed for tweets he sent. And so it goes on.

The Vision 2030 economic plan set out last year by MbS, as the crown prince is known, is evidence of the effort to make Saudi more welcoming for commerce, but there’s a way to go here, too. The country ranks 94th out of 190 in the World Bank’s ease of doing business rankings. It does better on the World Economic Forum’s competitiveness list, at 30th out of 137, but at 64th of 180 on the Heritage Foundation’s economic freedom list, it’s below the United Arab Emirates and Qatar, for example.

There’s even a historical cautionary tale. It’s King Abdullah Economic City, a flagship project launched in 2005 and named after the then sovereign. The plans included 2 million people with a big port, rail and roadways, industrial parks, and modern housing. Twelve years on, the city’s population has reached a mere 7,000, according to a Reuters report. NEOM is supposed to be different – the entrepreneurs involved will make the rules. That sounds a bit like democracy – part of the uphill road on competitiveness and freedom Saudi faces.

First published Oct. 26, 2017

(Image: REUTERS/Faisal Al Nasser)