Riyadh is right to prioritise King Abdullah Economic City

20 June 2008
Given the scale of activity involved in developing six economic cities, Sagia is right to focus on them one by one.

The scale of Riyadh’s plans to develop a series of economic cities to stimulate investment in the country’s non-oil economy highlights its desire to create a mature, diversified economy in the kingdom.

So far, the initiative has been a great success. It has generated good publicity for the kingdom, which has attracted interest from investors. It seems that barely a day passes without a contract being signed, developments being announced or multi-national companies get-ting involved.

But a closer look reveals a less positive picture. The vast majority of this activity is focused on King Abdullah Economic City (KAEC) on the Red Sea coast at Rabigh, the flagship project, which is backed by the king and Dubai developer Emaar.

The focus on KAEC has led some involved in the other five cities in Tabuk, Medina, Jizan, Hail and Ras al-Zour to question the future of their developments. Many of those involved in these projects are questioning the government’s back-seat approach to their developments, arguing that the government must play a lead role if they are to be successful.

Saudi Arabian General Investment Authority (Sagia), which is charged with masterplanning the development of the cities, says it is unreasonable to expect cities to simply emerge out of the desert, that it will take time, and staggering their development is the only way to go about it.

Given the scale of activity involved in developing these cities, Sagia is right to focus on the cities one by one, and certainly ensuring the success of the first one, KAEC, will be the best way of ensuring success in the others

However, if Riyadh is serious about delivering all six cities, it must not give the impression that some are less importance than others. This will guarantee their failure.

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