How will Saudi Arabia’s plan to create new cities, on both the Persian Gulf and Red Sea coasts, be beneficial in finding alternative means of providing wealth in anticipation of the oil deposits eventually drying up?
For decades, Saudi Arabia has been one of the world’s richest countries. However, it has not had a very advanced economy. It has only been rich because of the massive amounts of oil that it extracts when compared to its very relatively small population. Saudi Arabia has not really had to develop any other ways of creating wealth. This is where the new cities that are being planned would be important.
The importance of these cities is that they could serve as incubators for new industries in Saudi Arabia. Each city is planned as a center for a certain type of industry. By gathering together various firms that are connected to these kinds of industries, the Saudi government is hoping to create synergies that will help new industries to develop. In a sense, they are trying to create new “Silicon Valleys” that will be hotbeds for certain types of industry.
These cities will be hopefully be important because they will jumpstart the creation of new types of economic activity that can diversify Saudi Arabia’s economy.