Saudi Arabia to introduce post-oil vision for economy’s future
The Saudi Arabia government is expected to release a plan this week that will liberate the kingdom from its reliance on oil.
Deputy Crown Prince Mohammed bin Salman, the 30-year-old son of King Salman, told Bloomberg that he will announce his “Saudi Vision 2030”, a comprehensive strategy to diversify the kingdom’s economy and create more jobs. According to official sources, it is expected to set goals for the next 15 years and a broad policy agenda to reach said goals. Details on the budget and economic policies will be released four to six weeks after the initial announcement in the form of his “National Transformation Plan”.
The prince, who is second in line to the throne, leads the Council for Economic and Development Affairs, which oversees the country’s finance, oil and economic agencies.
The kingdom remains dangerously dependent on oil exports and low global prices created a state budget deficit of nearly $100 billion in 2015, emphasizing the need for change.Saudi stocks have suffered at the whim of crude oil prices, which fell this year to its lowest point in a decade.
According to a Bloomberg report, the long-term plan involves changes to the kingdom’s own oil company, Saudi Aramco, to transform it into an energy and industrial conglomerate. This is in line with the prince’s goal of raising non-oil revenue by $100 million by 2020. He also plans to sell a small portion, less than 5%, of the parent company in an initial public offering and transfer the company to the country’s Public Investment Fund, which the Council for Economic and Development Affairs oversees. The prince said that this structural change would be key in building an economy reliant on stocks rather than crude oil.
Reuters reported that among the reforms expected in the prince’s vision are an efficiency campaign, an expansion of the private sector outside of the oil industry and changes to the kingdom’s foreign assets.
Previous reforms in recent decades have yielded modest results at best. But the prince’s proposal might be boldest yet since the founding of the kingdom.
Source: USA Today