“We plan to set up a $2 trillion sovereign wealth fund. part of its assets will come from the sale of a small part of Aramco”. Prince Mohammed estimated that the Saudi fund will eventually be worth almost $3 trillion …
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“The 5 per cent is from the parent company”, Prince Mohammed told Al Arabiya in the interview.
The announcement of the long-term reform programme, dubbed “Saudi Vision 2030”, marks the beginning of a hugely ambitious attempt to move Saudi Arabia beyond oil, the backbone of its economy for decades, amid a steep fall in prices. But the plan gave few details on how this would be implemented, something that has bedevilled previous reforms.
According to a transcript of the Al Arabiya interview, Prince Mohammed appears to be focusing on long-term expats living in Saudi Arabia – specifically Arabs and Muslims – who send their earnings overseas but would “prefer to be part of the Saudi economy”.
A sweeping plan to wean Saudi Arabia from its dependence on oil, unveiled early Monday, has drawn cautious praise in global and domestic policy circles.
And the fall in oil prices is largely due to OPEC kingpin Saudi Arabia’s own refusal to cut production as it seeks to drive less competitive players out of the market, in particular United States shale producers. Even as oil prices plummeted by more than 50 percent over the past two years, Riyadh has continued pumping from its reserves, which still account for one in 10 barrels produced every day.
“We will smooth the process of listing private Saudi companies and state-owned enterprises, including Aramco”. Today they will be transparent. It also said it would lower the rate of unemployment from 11.6 percent to 7 percent.
The deputy crown price is also defence minister and the chair of the Council of Economic and Development Affairs set up previous year to oversee the economy, and also chairs a body overseeing Aramco.
The country plans to list less than 5 per cent of Aramco, the conglomerate that the deputy crown prince said was worth more than US$2 trillion. “It is estimated at between $2 trillion and $2.5 trillion”, Mohammed bin Salman said. Despite previous reform attempts, the kingdom’s schools have always been seen as focused on religious teachings rather than preparing students for a role in a modern economy.
Boosting Foreign Direct Investment (FDI) from 3.8 per cent of GDP to the global level of 5.7 per cent. As defence minister, the prince supervised the kingdom’s military intervention in Yemen, where a Saudi-led coalition 13 months ago launched air strikes against Iran-backed rebels in support of the embattled government.
Officials are already taking action to diversify revenue sources before existing state coffers get depleted. In the widespread social media discussion of the plan on Monday, some Saudis expressed doubt that the royal family – wrestling with its ever-present regional rivalry with Iran and the threat of Islamist extremism – would ever allow true reform.
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Raising non-oil revenues six-fold from $43.5 billion to $267 billion through, among other measures, major cuts in energy and other public subsidies.
