Saudi Arabia Spends Billions Building New Desert Cities

Among the most expensive elements are an array of what he calls “gigaprojects.” They include New Murabba, a Riyadh development with the giant cube, and a yacht resort on the Red Sea. The most notable is a planned sci-fi-like city of nine million called Neom that features a pair of mirror-glass-covered, 110-mile-long buildings taller than the Empire State Building with a $500 billion price tag.

Much of the spending is only just ramping up. A $62 billion Riyadh gigaproject called Diriyah is a sea of construction cranes, while armies of excavators are digging foundations for the first sections of Neom’s lengthy towers. Neom last month committed $5 billion to build a dam at the base of a planned arid mountain ski resort marked by its heavy reliance on artificial snow-making.

“It’s mind-boggling the amount of stuff that’s trying to be done here,” said Tim Callen, a visiting fellow at the Arab Gulf States Institute think tank in Washington. He estimates the government may need to contribute another $270 billion to PIF by 2030. “It will involve taking more risk” fiscally, he said, either by adding debt or lowering reserves that keep the Saudi riyal currency pegged to the dollar.