And last August, the “Silver Spirit” or “Silver Spirit” ship began offering voyages off the coast along hundreds of kilometers in an area the Kingdom hopes to turn into a global tourism site and an investment attraction center as part of an ambitious plan to diversify the oil-dependent economy.
The luxury ship, which was chartered for two months by a company owned by the Saudi Public Investment Fund, provides a window to view projects worth billions of dollars that the Kingdom is developing on the Red Sea coast despite austerity measures.
“We are introducing the Red Sea to the world … and highlighting its value,” Tourism Minister Ahmed al-Khatib told AFP in an interview on board the ship.
During a four-day cruise last week, the ship sailed near huge development projects, including the “Red Sea” project, which aims to convert dozens of islands and a group of mountain sites on the Red Sea coast into luxurious tourist resorts.
For a few hours, the ship anchored on two islands, between them, Sendala, which are part of the NEOM project, the huge area slated to be built at a cost of $ 500 billion along the Red Sea coast and in areas in Jordan and Egypt.
A number of well-known social media account holders were invited to take part in the full-cost paid trip, during which they took pictures on the white sandy beaches.
Questions about the feasibility of these projects
Some question the feasibility of these mega projects that come in the midst of a decline in government revenues due to the shock of low oil prices in addition to the emerging Corona virus crisis.
Saudi Arabia, the world’s largest oil exporter, has announced that it plans to cut government spending by more than 7 percent next year, while the public budget is expected to record a deficit of 12 percent of GDP in 2020.
At the same time, Saudi Arabia is awarding billions of dollars worth of contracts for mega construction projects.
The Saudi Public Investment Fund recently awarded contracts to develop NEOM to the American project management company Bechtel and Aecom.
According to the Middle East Economic Digest, the Red Sea project has awarded contracts worth 5 billion riyals ($ 1.33 billion) and is expected to award contracts worth more than 3.5 billion riyals ($ 933 million) by the end of this year.
“New projects on the Red Sea coast are moving forward despite Covid-19 and lower oil prices,” said Colin Furman, editor of the newsletter.
“During the next three years, the Saudi government will be smaller, but its projects will be bigger,” he added.
For his part, the Saudi Minister of Tourism says that the projects are moving at a “very fast” rate, stressing that they have “unlimited support” from the Saudi leadership.
“Not a positive step”
The Kingdom presented the luxury ship for the first time while the Covid-19 pandemic affected global tourism.
Last year, Saudi Arabia launched tourist visas and opened the door to tourism as part of Saudi Crown Prince Mohammed bin Salman’s plan to diversify the economy.
And the prices of the trip on the boat start from 6000 riyals (1600 dollars), and it seems that it aims to attract wealthy tourists from inside Saudi Arabia, with the suspension of travel due to the virus.
The cruise offers spacious suites as well as a personal butler service.
The trip started from King Abdullah Economic City, a huge project near Jeddah that cost billions of dollars, but it is a warning of the fate of some mega projects.
The mega project, launched more than ten years ago as part of a diversification plan to build new cities, appears nearly empty and reflects the Kingdom’s difficulties in attracting investments in sectors other than the hydrocarbon sector.
“The political commitment to moving forward with mega projects appears to exist,” said Karen Young of the American Enterprise Institute.
However, she pointed out that “spending limited state resources on projects that do not focus on creating job opportunities or removing the largest possible number of people from government sector salaries is not a positive step towards further economic diversification.”
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