Plans for a Saudi Arabian megacity are currently underway.

Dubbed Neom -- a combination of Latin neo, or new, and "m," the first letter of the Arabic word for future, mustaqbal -- the planned city is ambitious in scope. Descriptions of it are increasingly reminiscent of an imagined utopia, but Crown Prince Mohammed Bin Salman reportedly views the project seriously.

According to plans, the desert city project is to be a "utopian metropolis serving humankind," and a launch pad for the "next era of human progress." It is meant to serve as a hub for manufacturing, renewable energy, biotechnology, media, and entertainment. It will be populated with luxury hotels and make extensive use of robotic labor, thereby freeing humans from manual labor and drudgery. It seeks to be an idyll, offering high quality of life, a pristine environment, and "excellent economic opportunities."

Of course, the ideal city of the future does not come cheap: Neom is slated to cost $500 billion, and take up 10,000 square miles and stretch from the Red Sea into Egypt.

© U.S. Department of State / Commons Wikimedia

Neom may just be another Saudi Arabian attempt to wean the nation off its reliance on oil. Although the national stock of oil isn't slated to run out for decades to come, fluctuation in oil prices make it an unstable source of revenue.

Neom is not the first "economic city," and its predecessors have not been successful. The King Abdullah Financial District (KAFD), for example, was erected ten years ago in Saudi Arabia at the direction of the late King Al Saud. A similar venture to Neom, it is currently home to under 10,000 people, a huge underperformance compared to the two million the city hoped to accommodate. The KAFD remains unfinished after over a decade, although it was initially intended as a rival to Dubai. The KAFD has not managed to attract the high-powered financial institutions it sought to its buildings.

But is there anything that can set Neom apart to make it successful? Or will it go down the same path as its predecessors? Neom may benefit from both increased political support and centralized leadership. Other economic cities encountered red tape in the form of unclear jurisdictions and a lack of cooperation with relevant government agencies, but Neom's path is comparably more clear.

© Wajahat Mahmood / Flickr.com

Further, unlike the other economic cities, Neom's primary mission is not to create jobs for Saudi youth, who constitute a massive percentage of the nation's total population: 50% of all Saudis are under the age of 25, and half of them are unemployed. Rather, Neom is marketing itself as a global cosmopolitan center that will endorse Western cultural norms, practices, and funding, perhaps giving it a broader appeal.

The Saudi government's sovereign wealth fund will financially support the city, but Neom still requires international investors in order to progress. Softbank (TYO: 9984) plans to invest $15 billion in the new city; the Russian Direct Investment Fund has also pledged to participate. However, Saudi Arabia's own financial circumstances are more limited than in previous years, and so it runs the risk of failing to be able to make substantial investments of its own immediately, before private funds are injected.