Saudi Arabia has unveiled an enormous new tourism project spanning more than 100 miles of its Red Sea coastline as part of continued efforts to boost the economy and international standing of the Middle Eastern Kingdom.
The 13,000 square mile project will see 50 untouched islands transformed into "an exquisite luxury tourism destination", governed by laws reflecting international standards, according to reports released by the Saudi Press Agency Tuesday.
The mammoth development, which exceeds the size of Belgium, is being backed by the country's sovereign wealth fund and is set to create up to 35,000 jobs and add up to $4 billion to the economy each year once completed.
Situated between the cities of Umluj and Al Wajh, 'The Red Sea' aims to capitalize on the region's natural and cultural merits, as well as developing world class leisure and entertainment facilities, to become a destination of choice for as many as 1 million visitors per year in less than two decades.
Phase one is set to start in autumn 2019 and complete in late 2022. This will involve the development of hotels, residential units, an airport and seaport, and other transportation links.
"Launching this project as an international tourist destination comes as a confirmation of the success of the outputs of the Kingdom Vision 2030, pointing out that this project represents great addition to the development and renaissance projects in our country," Saudi Arabia's Minister of Culture and Information Dr. Awad bin Saleh Al-Awad said in a press announcement Tuesday.
The launch comes as part of Saudi Arabia's wider 'Vision 2030' plans, which aim to reduce the Kingdom's dependency on its natural oil reserves.
The country boasts the world's second-largest oil reserves after Venezuela but, like its competitor, it has been hard hit by the fall in oil prices over recent years and has been at pains to manage oil supplies alongside other OPEC nations in a bid to boost prices.
It is expected that the government could sell a stake in its $2 trillion national oil company Saudi Aramco within the next year as it seeks to shift focus to private industry.
However, developing Saudi Arabia's appeal as an international tourist destination will not be without its difficulties. The Muslim country is subject to stringent religious and social codes and currently sees the majority of its tourists come from the Middle East, North Africa and Asia, often to visit the holy city of Mecca.
'The Red Sea' projects claims the region will be governed by a "special regulatory framework", which, as with some other Middle Eastern nations such as Dubai, makes certain allowances for tourists, such as allowing alcohol consumption by non-Muslims.
The details of this "semi-autonomous" region are not yet clear though and some analysts anticipate that the outcome of such decisions will be crucial to the success of the project.
William Jackson, senior emerging markets economist at Capital Economics, told CNBC that while the project could provide the economy with some much-need diversification, the hurdles – but financial and regulatory – remain high.
"The concern I would have is that it will be costly to develop the area in terms of building the infrastructure, etc. yet the hurdles to making it successful are quite high – including improving access to visas and relaxing more conservative social laws in the country.
"That depends on how far the authorities are willing to go, and the extent to which they face a backlash. Moreover, tourism in this region will face strong competition from Dubai and – depending on the security situation – Egypt too."