Apple, the most valuable publicly traded company, has a market capitalization of about $585 billion.
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In essence, the aim of the “Vision 2030” economic reform blueprint is to curtail the country’s reliance on oil exports and create jobs.
Custodian of the Two Holy Mosques, King Salman bin Abdulaziz Al Saud of Saudi Arabia, announced the approval for the “Vision 2030” plan in a short televised announcement on Monday in which he called on Saudis to work together to ensure its success.
For the long term, global efforts to combat climate change create huge uncertainty about demand for oil in the future.
Saudi Arabian Deputy Crown Prince Mohammed bin Salman said Monday that Saudi Aramco will offer a small minority stake through an initial public offering.
Aramco will likely replace Apple as the most valuable company.
Lower oil prices pushed Saudi Arabia into a budget deficit of almost $100 billion last year and a projected deficit this year of $87 billion.
According to Prince Mohammed, the value of Aramco is to exceed $2 trillion.
Asked where Riyadh would find the funds for a US$2 trillion dollar fund after recent borrowing, he said it would come from transferring the ownership of Aramco to the PIF. “We will endure and the economy will take off”. In addition to that there are other assets that will be added to the fund, and part of it is already added.
Aramco is probably going to be the world’s most valuable company while the wealth fund will be the largest of its kind.
He said the lack of transparency of Aramco has “upset” many people. Today they will be transparent. If Aramco is listed then it would have to announce its results quarterly and be open to scrutiny by financial and other institutions locally and overseas, he said.
The 30-year-old second-in-line to the throne also serves as the country’s defence minister and chairs a committee to oversee economic policymaking.
While the plans are most ambitious, ever launched in Saudi Arabia but Prince hasn’t followed through with details over how he plans to achieve it, especially non-oil revenue part.
Salman criticised military spending in Saudi Arabia saying: “When I enter a Saudi military base, the floor is tiled with marble, the walls are decorated and the finishing is five stars”.
Karen Young, a senior resident scholar at the Arab Gulf States Institute in Washington, said these initiatives are particularly important to the kingdom as sectarian tensions with rival Iran play out across the region.
Saudi Arabia’s real GDP grew 3.4 percent last year, but the International Monetary Fund anticipates this growth will slow to 1.2 percent this year and will be just 1.9 percent next year.
Increasing the presence of women in the workforce is one of the components in Saudi Arabia’s new package of economic and social policies for its post-oil journey.
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“For me as a Saudi, I am concerned by the education transformation plan”, said a Saudi entrepreneur.
