Sindalah, the first part of Saudi Arabia’s NEOM megacity, opened this week as Saudi Arabia’s Future Investment Initiative conference began.
Sindalah is a luxury island resort, and sits five kilometres off the northwestern Saudi coast in the Red Sea. The development targets high-end tourists, as part of Saudi Arabia’s efforts to diversify its economy away from oil.
“NEOM is committed to supporting the Kingdom’s new era of luxury tourism, with the opening of Sindalah,” said NEOM CEO Nadhmi Al-Nasr. “NEOM’s inaugural destination offers visitors a ‘first glimpse’ of what the future holds for our extensive portfolio of destinations and developments.”
At the Future Investment Initiative conference, running from October 29-31, officials from the Saudi Public Investment Fund (PIF) said that it would cut its international investments. While these investments are now 30% of its total, the Saudi target is 18-20%.
CEOs and presidents from companies including Tesla, Alphabet, Morgan Stanley, Goldman Sachs, and Softbank have spoken so far at the summit.
Saudi Arabia has been scaling back spending as oil prices have fallen. As much of the Saudi budget is being spent on NEOM's construction, the projected oil price the kingdom would need to break even has also risen 19% this year.
In March 2024, the PIF’s cash reserves dropped to US$15 billion, the lowest in four years.
The kingdom has been targeting US$100 billion of foreign direct investment annually by 2030, which would be around three times as much as its previous record.
In April, Saudi Arabia reportedly drastically cut down the scope of NEOM’s flagship development, The Line, due to rising costs. While the kingdom’s original goal was to house 1.5 million people in The Line by 2030, its current projection is that The Line will have less than 300,000 residents by then.
NEOM has also faced criticism for human rights abuses, with Saudi officers reportedly being ordered to use lethal force against those already living where NEOM is set to be built.
According to an ITV documentary that first aired on Sunday, Kingdom Uncovered: Inside Saudi Arabia, workers at NEOM have regularly been made to work 16-hour shifts.