Update On Saudi Arabia's Theme Park -- August 3, 2019

Before we get to Fantasy Land, let's see how Saudi Arabia is doing financially. Actually quite well considering how low oil is priced. Imagine this chart if oil sold for $65. Or $75. Or $100. Fantasy Land is crazy, crazy, crazy, but availability of money won't be an issue. Remember: Saudi could see another $2 trillion when/if they go ahead with the Saudi Aramco IPO.

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The "Prince Salman" plan is tracked at the sidebar at the right.

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SHARMA, Saudi Arabia—This seaside corner of northwest Saudi Arabia is so barren that the only abundant resources a group of consultants could identify were sunlight and “unlimited access to salt water.”

But Saudi Crown Prince Mohammed bin Salman didn’t see a wasteland when he landed in his helicopter here a few years ago. He saw the future— and hatched a plan for a $500 billion city-state to cover 10,000 square miles of rocky desert and empty coastline to attract the “world’s greatest minds and best talents” to the world’s best paying jobs in the world’s most livable city.

They’ll fly drone taxis to work while robots clean their homes. Their city will supplant Silicon Valley in technology, Hollywood in entertainment and the French Riviera as a place to vacation.

It will host a genetic-modification project to make people stronger. These ideas are laid out in 2,300 pages of confidential documents by consultants at Boston Consulting Group, McKinsey & Co. and Oliver Wyman that The Wall Street Journal reviewed, and discussed in interviews with people involved in the project called Neom, a portmanteau of the Greek word for “new” and the Arabic word for “future.”

The documents, dated September 2018, offer the most detailed look inside Neom and its planning since the project was unveiled in 2017. Tasked by the crown prince, known as MBS, to help turn his imaginary city into a reality, the consultants created an expensive mix of science fiction and corporate buzzwords interrupted by uncomfortable realities: Local tribes would be forcibly relocated. A court system developed by law firm Latham & Watkins and labeled “independent” would have judges reporting directly to the king, and operating under Shariah law, or Islamic jurisprudence.

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De facto leader Crown Prince Mohammed bin Salman has been trying to address the problem, but it has been on the revenue side of the ledger and carries its own price tag. He is, for example, throwing money into Neom, a futuristic city that is Saudi’s self-proclaimed “world’s most ambitious project.” It is meant to pivot the economy away from oil, but will cost $500 billion in the interim. Despite some austerity when oil prices collapsed, the kingdom is spending heavily on guns and butter. It has been engaged in a multiyear war against Iran-backed rebels in Yemen. A report from the Stockholm International Peace Research Institute pegged the country as the third largest military spender in 2018 by dollar value at more than $67 billion—far higher than the U.S. as a percentage of gross domestic product.