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Comment by cs02rm0 | Hacker News Reader

No great surprise, they have form here.

The Saudis announced six megaprojects in 2005. King Abdullah Economic City was the only one that went anywhere. I believe it was supposed to have 2 million people and reached about 7 thousand.

They've kicked people out of the area, killed at least one person, trashed the area with initial construction efforts (I've driven past) and now the inevitable seems to be coming to pass already.

They still have time but they need to do something to diversify from oil in the way Dubai has eventually. Building a new Dubai, with a different legal framework (only rumoured for Neom AFAIK), doesn't seem like the worst idea to me, but starting with an overly ambitious design probably isn't the way to get traction. The Middle East do love a pissing contest though so starting small isn't what they're into.

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Is Dubai really diversified away from oil? My naive impression is that it’s a major center for capital, with most of that capital coming from oil.

Saudi diversification from oil is a fantasy. The culture is medieval from the POV of the rest of the world, and the hostile climate is only getting worse.

I think Dubai has from oil production, at least on the surface. Much of its economy is in retail, tourism, construction, transport, IT and financial services, etc. Yes the initial capital came from oil, the bigger issues for them now are perhaps how much comes from debt and how much comes from neighbouring states if their oil economies collapse.

Saudi is at the mercy of it's leader and little else. The culture isn't generally medieval but the Al Saud certainly can be.

Yes, Dubai diversified away from oil.

I'm not sure if Saudi Arabia can reproduce the success. The entirety of Arabian peninsula is pretty much immune to cultural development, but Dubai got a pass because they were the first ones in that area to try building a normal healthy economy, meanwhile whatever Saudis do, they have to compete with Dubai which is already highly developed.

My point being, why would people invest in Saudi Arabia if they can invest in Dubai.

In 2018 bout 67% of Saudi's exports were essentially zero-value-add extracted oil & gas. About 12% were higher-value chemicals (still mostly basic chemicals, though some amount of super-high-value advanced materials or agrichemical or specialty chemicals). Value-added chemical exports as a % of total exports increased by 2021 although the data now includes a giant block for "trade data discrepancy", so results are not directly comparable to 2018.

In 2018 "only" 43% of UAE's exports were zero-value-add extracted oil & gas. 11-12% was "Gold, Diamonds, Precious Metals"(?). The rest is pretty evenly split between very different industries - value-added chemicals, electronics, cars, metals, industrial machines, and textiles.

Overall, UAE pulls in a higher % of their foreign currency from non-oil-and-gas economic activity than Saudi does, but still leans heavily on it for 40-60% of their exports. Saudi exports ~20% more oil & gas than UAE on a nominal total USD basis. However, UAE's total exports are 30-40% higher than Saudi's on a total USD basis. So UAE sells less oil, more other stuff.

If I had to pick, I'd definitely rather be in Dubai's position than Saudi's. I've also lived in both places, and I'd definitely say that Dubai appeared to have a more diverse economy and drew from a deeper talent pool (mostly immigrant-based, though).

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