Sindalah showcases Saudi Arabia’s investment potential, says commentator Ali Shihabi

DUBAI: Sindalah Island, NEOM’s new luxury tourism destination under construction on Saudi Arabia’s Red Sea coast, represents a critical milestone in the Kingdom’s economic transformation and proves many of its early doubters wrong, Saudi commentator Ali Shihabi has said.

Appearing on Arab News’ current affairs program “Frankly Speaking,” Shihabi highlighted the significance of Sindalah, saying its launch marked an important shift in global perceptions of the Kingdom as a holiday destination and as an investment opportunity.

“The launch of Sindalah was very, very important because you needed proof of a concept on the ground to show what can be done,” he said.

“For people to come and see it and feel it and enjoy it and experience it” validates the vision that Saudi Arabia has for NEOM and similar projects.

Sindalah Island, which will feature world-class yachting, luxury hotels and a golf club, could soon rival the likes of Monaco or Greece as a global destination. It is the latest in a bevy of megaprojects under construction across the Kingdom as part of the Vision 2030 transformation.

This transformation is already drawing the interest of major investors. Shihabi mentioned a recent conversation with an Indian investor planning to establish a $15 billion steel plant in the Kingdom, describing it as an “exciting opportunity” that showcases the nation’s appeal to foreign investors.

“​​His group will be investing a billion dollars in equity,” Shihabi told “Frankly Speaking” host Katie Jensen. “And he was very excited about the potential, the structure of incentives that are given to foreign investors, whether industrial investors, whether it’s the SIDF (Saudi Industrial Development Fund), or other facilities that the Saudi government makes available for foreign investors, and the good size domestic market also for different products.”

In Shihabi’s view, the Saudi government’s approach to giga-projects like NEOM is akin to that of a venture capitalist. The government has taken on the financial risk of building and launching these projects to attract global investors.

“It was a theoretical opportunity and you needed the Kingdom to be the venture capitalist really: to build the first models, even if those are loss leaders, because you needed a proof of concept on the ground,” he said.

Shihabi said Saudi Arabia’s Red Sea coastline, largely untouched by mass tourism, is “one of the last, if not the last, unspoiled virgin territory of exquisite seafront.”

By acting as an initial investor, the government aims to establish Saudi Arabia as a legitimate luxury destination and to cultivate demand among global tourists.

While Shihabi acknowledged that it will take time for Saudi Arabia to fully emerge as a tourism hub, he is confident that the foundation stones are in place. “Putting Saudi Arabia on the tourist mindset and map is going to take a number of years,” he said.

However, the momentum of these projects and Saudi Arabia’s investments in infrastructure, marketing, and partnerships are advancing the Kingdom’s vision to create an attractive and competitive tourism sector in the region.

“It will take time for tourists to get used to the concept of coming to the Kingdom as a tourist destination,” said Shihabi. “But I think that the foundation stones are being put in place successfully.”

The recent annual conference of the Future Investment Initiative in Riyadh, commonly referred to as “Davos in the desert,” showcased the Kingdom’s commitment to becoming a significant player on the global stage.

Shihabi, who is both an author and commentator on the politics and economics of Saudi Arabia, acknowledged that FII plays a valuable role in promoting the Kingdom’s image and helping international investors understand the scale and seriousness of Vision 2030.

With the launch of projects like Sindalah and explosion of opportunities in NEOM, Saudi Arabia is gradually redefining its reputation on the world stage. However, Shihabi said changing global perceptions will require time and continued openness.

“The Kingdom has never been good at communication,” he said. “One of the deep structural problems the Kingdom had was it was closed off to the world. And the big change has been the opening up of the Kingdom to the world now.

“I encourage Western journalists, always, just to take a tourist visa, get on the plane and go and see things the way they are and the way they are developing and changing. And I can hardly think of a journalist who, having made the effort, has not changed his opinion of the Kingdom from what he had before he came to the Kingdom.

“The story really is a good one to be told on the ground and much easier to be told on the ground than to be explained in theory abroad. And there are a lot of skeptics; there are a lot of cynics.

“There’s a certain amount, I guess you can say, in the world of … I don’t want to exaggerate and use the word racism, but sort of prejudice toward Arabs and Muslims, which carries over to the Kingdom, prejudice against oil wealth. And a lot of historical baggage that the Kingdom has carried, which continues to affect its image.

“But I think that the more we open up the country and the more we allow people to come in and the more we allow people to see the changes on the ground, the better the image becomes.”