Red Sea Tensions Threaten Saudi Mega-Project

The Red Sea warfare that has made one of the world’s busiest shipping routes hazardous for vessels poses an additional risk for Saudi Arabia, which has committed billions of dollars to developing a commercial and tourist center in Jeddah, on the sea’s eastern coast.

Authorities worry that if the weekslong shower of Houthi missiles and drone attacks is not contained, it could eventually drive away the investors and visitors that are key to the ambitious project.

The Jeddah Central Project, initiated by Crown Prince Mohammed bin Salman in 2021, is intended to transform Jeddah into a world-class tourist destination and enhance the city’s economic strength.

Aligned with Saudi Arabia’s economic diversification goals, the $19.9 billion development spans 5.7 million square meters in the heart of Jeddah, integrating modern amenities while preserving the city’s rich heritage.

Featuring four prominent landmarks — an opera house, museum, sports stadium and oceanarium — the project embodies a contemporary interpretation of Jeddah’s Hijazi essence. It also includes a marina, beach resorts, diverse dining options and modern residential areas.

Upon completion in 2030, the destination is set to offer 8,000 rooms across 50 hotels and 1,000 residential properties while creating around 70,000 direct and indirect jobs. It is projected to contribute $5.3 billion annually to the Saudi economy from 2030 onward.

The highly secured gates of Jeddah Islamic Port. (VOA)

The highly secured gates of Jeddah Islamic Port. (VOA)

Also threatened by the aerial warfare between a U.S.-led alliance and the Yemen-based Houthis — who say their attacks on shipping are in support of Hamas fighters in Gaza — is Saudi Arabia’s fast-growing Jeddah Islamic Port, which handled a record amount of freight in October, before the Houthi attacks began.

Trouble from the Iran-aligned Houthis is nothing new to Saudi Arabia, which has faced missile and drone attacks from its southern neighbor since spearheading a nine-nation military intervention in 2015 to try to reverse a Houthi takeover of the Yemeni capital, Sanaa.

In 2021, the group tried to damage a crucial Saudi Aramco facility at Ras Tanura, which is important for exporting petroleum. This led to Brent crude prices going above $70 per barrel, their highest point in 14 months, and pushed U.S. crude futures to their highest level since October 2018.

Earlier, Houthis claimed responsibility for attacks on military targets in Saudi cities like Dammam, Asir and Jazan. Before, in 2019, the Houthis claimed responsibility for attacks on oil facilities using missiles and drones on the Abqaiq and Khurais facilities, although the Saudi government blamed Iran.

In 2020, they targeted oil facilities in Jeddah, which is closer to their territory.

The Houthi-related insecurity has contributed to noticeably heightened security around the Jeddah Islamic Port, according to residents such as Khalid Ali, a Yemeni national with three decades of work experience in the Saudi city.

“We used to freely roam inside the port. However, in the past couple of years, the kingdom has heightened security, and authorities now restrict movement without proper permission or a specific purpose,” he said in an interview.

The United States has made a point of highlighting the threat posed to the regional economy by the Houthi attacks on shipping, even as the Houthi fighters claim to be acting in the interests of the region.

“The effects of Houthi attacks in the Red Sea have been devastating for countries in the Middle East,” the State Department posted this week on X. “The Houthis claim to act in the interest of the Palestinians in Gaza, but their actions impact the delivery of critical humanitarian aid into Gaza and are harming Palestinians.”

Joshua Landis, head of the Center for Middle East Studies at the University of Oklahoma, told VOA that the best answer to Saudi Arabia’s economic worries over the Red Sea lies in addressing the broader issues afflicting the Middle East as a whole.

“Businesses should lobby for a long-term solution to the Arab-Israeli conflict. This will certainly not solve all its problems, but it would be a beginning,” he said.

While multinational talks to that end are reported to be underway involving the United States, Saudi Arabia and other countries, Riyadh so far has not budged publicly from its long-standing position on the Israel-Palestinian dispute.

Saudi Arabia “reiterates its call to the permanent members of the U.N. Security Council that have not yet recognized the Palestinian state, to expedite the recognition of the Palestinian state on the 1967 borders, with East Jerusalem as its capital, so that the Palestinian people can obtain their legitimate rights and so that a comprehensive and just peace is achieved for all.” said a Tuesday posting on X from the Saudi Ministry of Foreign Affairs.

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