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Saudi's economic cities under pressure to deliver

JEDDAH, Saudi Arabia (Reuters) - An hour’s drive north of Jeddah on the Red Sea coast, 8,000 workers toil under the relentless summer sun building what Saudi Arabia hopes will be the key to its social and economic future.

A view of King Abdullah City near Jeddah July 18, 2008. REUTERS/Susan Baaghil

If all goes to plan, the King Abdullah Economic City and three sister developments in Hail, Jizan and Medina will by at least 2020 be vibrant communities in a country with high unemployment and an over-reliance on oil.

Allowing women to drive cars and possibly permitting cinema houses, they may also add to the few bubbles of freedom in Saudi Arabia -- where suffocating gender restrictions have been eased in recent years, to the ire of many religious conservatives.

But while funds are plentiful -- the government says the plan has attracted $35 billion of investment from global players -- many forces including the religious establishment and tensions in nearby Iran and Iraq could hinder the process.

Saudi Arabia is a Sunni Islamic state where the Al Saud family rules in an alliance with clerics who are given control of courts, education, mosques and even a law enforcement agency to maintain their austere vision of Islamic law.

Authorities have tried to reduce some clerical influence since the September 11 attacks on U.S. cities in 2001 -- where 15 of the 19 Arabs who killed some 3,000 people were Saudis -- and the outbreak of al Qaeda campaign against the state in 2003.

In the “economic cities”, many expect the clerics to be kept at a distance from social life, the workplace and education.

“Society has changed fundamentally and the measure of it is that the official fatwa (religious edict) of old no longer has the hold it had,” said reformist cleric Abdelaziz al-Gasim.

He said social and political taboos had been broken, citing women revealing their faces in some public places and popular participation in 2005 municipal elections, diluting the idea maintained by the clerics of absolute obedience to the ruler.

“A girl or young man who hears a fatwa doesn’t just obey, he goes to Google and hears other opinions and discusses,” he said.


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Although there is not much to see so far, the King Abdullah City will be the jewel in the “economic cities”’ crown.

A grand gate bearing the king’s image and words “the vision of our leader has embodied our dreams” stands virtually alone in an expanse of desert covering over 388 square km (150 square miles).

But after the gate a long road with banners on lamp posts unveils the magnitude of the ambition -- a hypermodern, eco-friendly mix of port and industrial zone, financial centre, residential quarters, luxury resort and schools and colleges.

An architect’s model in a showroom by the sea shows a stunning mix of skyscrapers, beach and resort, with a “media city” thrown in for good measure where publicity posters suggest Britain’s BBC for one will maintain offices.

Developed by Emaar Economic City, a subsidiary of Dubai’s Emaar Properties, it was the first of the four when launched in 2006.

“Do you know the city will be larger than Washington?” said public relations manager Rayyan al-Dahlawia on a site tour. Two million people will work and play inside the protected zone.

The aims of the cities go beyond job creation to urban renewal, modern education and easing the grip of the religious establishment on a society that has doubled to include 17 million Saudis of a total of 25 million in 18 years.

Clerics require gender segregation throughout society, from cafes and restaurants to schools and universities. Clerical influence is strong in a state education system burdened by low standards and a strong emphasis on religion.

“Saudi Arabia today doesn’t offer the kind of services that are required,” said Fahd al-Rasheed, the chief executive officer of Emaar Economic City. “There is a lack of infrastructure and basic urban aesthetic beauty is also missing.

“We have 60 percent of our population under 30 and these people need places to live. So we are going to create the educational opportunities for them to come, study and work.”

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The plans are that by 2010 up to 10,000 housing units will have been completed in King Abdullah City with around 500 inhabited, and 10 percent of the city finished.

“We’re all looking forward to it,” said Samar Fatany, a columnist and radio presenter in nearby Jeddah, Saudi Arabia’s most liberal city where segregation rules are laxly enforced.

Critics say even these bubbles of modernity will not be enough to attract global or even Saudi interest, given the ease of living and working in neighboring cities like Dubai where there are, for example, no religious police on the streets.

The bureaucratic red tape and the reign of clerics in society at large could be enough to discourage many foreigners, including Arabs, from living and investing there -- particularly in underdeveloped Jizan near Yemen, and the desert town of Hail.

The Knowledge City in Medina, closed to non-Muslims, will aim to attract Muslim information technology experts from Asia.

“They are white elephants and not economically sustainable without huge subsidies,” said a senior diplomat, speaking on condition of anonymity because of the sensitivity of the topic. “It’s hard to find serious economists who aren’t in the pay of the Saudis who think it is sustainable.”

And the clerics and their vast network of supporters, bolstered by natural social conservatism, are not giving up.

“The king goes to parliament to talk about the need for women to participate but it’s all nonsense,” said Abdullah al-Alami, a columnist from Khobar, another liberal enclave, in the eastern part of the country. “The king has good intentions but when it goes down to lower levels there is resistance.”

He cited continued insistence on gender segregation in the workplace, schools and universities as a sign of clerics consolidating control in return for concessions in liberal zones.

Diplomats say King Abdullah and his advisers are worried that the shine is rapidly disappearing from the economic city concept and are pushing for results at the King Abdullah City.

Developer Emaar has had three CEOs since 2006 and business figures in Jeddah say the Saudi Arabian General Investment Authority, charged with overseeing the project, is being pressed to produce results.

Progress has been faster at the King Abdullah University of Science and Technology (KAUST), just next door to the King Abdullah City and in the care of Saudi Aramco, widely seen as the country’s most efficient and modern corporate institution.

Teaching at KAUST, where classes will be desegregated, is due to begin in October. The king inaugurated it only last year.

But adding to concerns is a sense that the future of the cities is tied up with the fate of social and political reforms. Many liberals fear the king’s successors will be less concerned with openness and relaxing clerical control.

“We are putting our faith in King Abdullah because obviously he’s a reformist,” Fatany said. “He represents optimism and tolerance and a progressive way of thinking.”

But the rulers’ whims could as easily turn again, given the region’s political tensions. “If Iran involves itself more in Iraq and the Americans tried to back the Shi’ites ... we’ll resort once more to the religious establishment,” said reformist cleric al-Gasim.

Editing by Sara Ledwith