Saudi Arabia, and to a lesser extent the other Gulf states, pursuing projects like this leaves me very confused. In the news, it seems like luxury projects are often employed as a means to break their economies off of oil, but it would seem to me like luxury and entertainment are rather odd choices. My gut feeling is that these are just vanity projects.
Does anyone have any insight as to why such projects of luxury and entertainment (e.g. sports) have such an appeal in the region for reducing dependence on oil as opposed to other other pursuits? Or is it just these projects that get headlines and there isn't out of the ordinary spending on such projects?
I feel like lots of the public has many negative perceptions of the region which makes these seem more unreasonable. There was a time when I was working for an ad tech company which got probably most of its revenue from a certain Gulf state, but the employees were always disparaging the country in conversations.
It’s not just one thing. Corrupting is a big part as extracting money from a government via good policies doesn’t work but handling a government project does.
Businesses and money can move outside the country, infrastructure can’t. Subsidize someone manufacturing heavy equipment or other businesses and the business is ultimately at a disadvantage as long as it stays where it is. It would be better off relocating so you’re stuck with an endless handout which stops working when the oil money runs out.
However large scale projects like roads have huge ongoing costs without directly generating revenue. A hotel should be self sustaining and revenue producing after construction.
And beyond corruption, foreign investment, cheap foreign labor, prestige, etc all play a role.
The advantage of luxury products is that it targets a market segment where people have lots of money.
Of course it is important to distinguish between a hard definition of "luxury" as the domain of the very very wealthy, and luxuries accessible to successful dentists and those who aspire to live like successful dentists. What I mean is successful dentists might buy Ferraris, but they are not buying diamond encrusted Ferraris (so to speak).
Part of the marketing for gcc countries is the superlatives. Tallest building in the world, longest/fastest zip-line, etc. luxury is just another superlative.
Does anyone have any insight as to why such projects of luxury and entertainment (e.g. sports) have such an appeal in the region for reducing dependence on oil as opposed to other other pursuits? Or is it just these projects that get headlines and there isn't out of the ordinary spending on such projects?
I feel like lots of the public has many negative perceptions of the region which makes these seem more unreasonable. There was a time when I was working for an ad tech company which got probably most of its revenue from a certain Gulf state, but the employees were always disparaging the country in conversations.