Bin Salman has previously said that the reforms will help Saudi Arabia to generate $100bn in non-oil revenue by 2020, and create six million jobs in non-oil sectors by 2030 by focusing on manufacturing, mining, tourism and healthcare.
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Saudi Arabia on Monday approved a long-awaited plan laying out overhaul priorities for the next decade and a half, setting in motion what is seen as likely to be a period of significant economic change in the oil-rich kingdom. Prince Mohammed said the kingdom would raise the capital of its public investment fund to 7 trillion riyals, from 600 billion riyals.
Speaking to reporters, [Prince Mohammed] said the project… includes plans to sell less than 5% of state-owned oil giant Saudi Arabian Oil Co., known as Saudi Aramco, and transfer ownership of the company to Saudi Arabia’s sovereign-wealth fund, the Public Investment Fund, so it can build a war chest for non-oil investments overseas.
The plan envisages a massive increase in Saudi Arabia’s capacity to receive Islamic pilgrims, to 30 million annually from 8 million.
Part of the funds from the share sale will be used to set up a $2-trillion sovereign wealth fund, which would easily surpass Norway’s $865-billion fund as the world’s biggest.
Key to the success of the plan is the valuation of Aramco, which the prince said will be more than $2 trillion.
A number of fund managers, including Shakeel Sarwar, head of asset management at Bahrain’s Securities & Investment Co., said low oil prices seem to be pushing the kingdom to take measures to make the economy more dynamic in the long run. “If Aramco gets IPO-ed that means it has to announce its statements of accounts”. In Saudi Arabia, men and women are separated in restaurants and other public spaces, and only male “guardians” can authorize decisions about women’s travel, work or marriage opportunities.
Although it comes against a steep fall in oil prices, the plan “was not created only” to face that challenge, the sandal-wearing prince said, answering questions for 50 minutes at a royal palace in a rare government press conference.
Saudi Arabia would prepare a new education curriculum, Prince Mohammed said.
He added that there are non-Aramco assets that will enter the fund and part of them will be also income for the fund with a value that may reach $ 300 billion in addition to the current value of the fund which is almost $ 200 billion. State price subsidies would be targeted more carefully so they went to the people who needed them, not the rich.
Within five years, Riyadh also aims to start issuing green cards to foreign workers who have lived in the country for a certain period of time.
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Saudi Arabia has already announced an array of spending cuts.
