“The Council of Economic and Development Affairs has approved the final draft of the National Transformation Plan, which is one of the plans adopted and part of the 2030 vision, which was launched and adopted by the Saudi deputy crown prince, president of CEDA”, the source said.
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The NTP will be implemented through 543 initiatives across 24 government bodies at a cost of 270 billion riyals (S$98 billion) over the next five years, State Minister Mohammed al-Sheikh told a press conference in the western coastal city of Jeddah. He aims to overhaul many aspects of Saudi Arabia’s economy and society as the kingdom prepares for a future of shrunken oil revenues and a rising population. The overall goal is to both diversify the economy away from oil and implement social reforms after the country posted a almost $100bn deficit past year linked to tumbling crude prices.
Under the NTP, new non-oil revenue is expected to come from the introduction of a value-added tax (VAT), so-called “sin taxes” on sweet drinks and tobacco, and additional fees imposed on the private sector. Public-sector wages and salaries would fall to 456 billion riyals from 480 billion, and make up 40 per cent of total spending versus 45 per cent.
Reuters cited the document as saying oil production capacity would be maintained at 12.5 million barrels per day, gas output would increase from 12 billion cubic feet a day to 17.8 billion and refining capacity would increase from 2.9 million bpd to 3.3 million bpd. Mohammed Al-Sheikh, a cabinet minister, said there were no current plans to tax foreigners and referred further questions to the Finance Ministry.
Salman, son of Saudi Arabia’s King Salman, will be in Washington on June 14-16.
The kingdom will also look to install 3.5 gigawatts of renewable power by 2020 and spend SAR 300m on identifying locations for nuclear electricity plants.
The timing is likewise considerable because Monday is the first day of the Muslim fasting month of Ramadan, when company and federal government activity in the conservative Islamic kingdom have actually traditionally decreased. The minister of environment, water and agriculture said the government plans to privatise the Saline Water Conversion Corp. Prince Mohammed was provided a main function in decision making after his father, King Salman, ended up being monarch early past year, organizing CEDA, a new supercommittee of top ministers accuseded of overseeing reforms.
The NTP is the result of months of planning with foreign consulting firms and Saudi nationals.
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Other elements of the Vision reforms which are not included in the National Transformation Plan include the privatisation of state oil giant Saudi Aramco and the transformation of the Public Investment Fund into a massive sovereign wealth fund.
