Custodian of the Two Holy Mosques King Salman has promised that the government would continue to invest in the training and education of citizens, which he said would help boost the econom
Arab leaders and global analysts have termed the Saudi Vision 2030 “bold and ambitious.”
Mohammed bin Zayed Al-Nahyan, Abu Dhabi’s crown prince, tweeted: “The Saudi Vision 2030 is an ambitious program from the decisive king and the man who makes historical decisions.”
He added: “Prince Mohammed bin Salman’s interview was an honor to future generations and the vision looks to benefit the Kingdom and the region as a whole.”
Mohammed bin Rashid Al-Maktoum, UAE vice-president and Dubai ruler, said on Twitter: “I carefully followed the announcement like others today. The vision is filled with ambition and hope for the Kingdom and the region under a young leadership that will surprise the world with its achievements.”
Bahrain’s foreign minister, according to Al-Arabiya, said the deputy crown prince’s interview “was a breath of fresh air.”
Christopher H. Johnson, chairman of the Middle East Council of American Chambers of Commerce, wrote for the National Council on US-Arab relations: “These changes not only promise greater economic stability to the Kingdom — a key regional and global energy, commercial, and security partner to the United States — but also present an opportunity for American companies to invest reliable long-term capital in a wide range of sectors and regions.”
Business and economic analysts also reacted to the news, one being Ali Al-Nasser, fund manager at London-based duet group, which has more than $1 billion invested in Middle East and North African strategies.
“The question is now again about execution. He said all of the right things, it is a matter of putting it all to work, and he seems to be very keen and very focused and all else being equal, there is pretty strong momentum behind it, and locally there is strong support for his agenda,” Al-Nasser wrote.
Ali Al-Nasser said the stock market reacted positively to the interview and some of the headlines that have been coming out.
Masood Ahmed, International Monetary Fund director for the Middle East and Central Asia, said the plan's objective of diversifying the economy away from oil is “exactly the kind of transformation that an economy like Saudi Arabia needs.” He added: “I think the real issue is going to be how to make sure that these very sensible and ambitious objectives can be translated into real changes.”
Khalid A. Al-Falih, chairman of Saudi Aramco, said: “Saudi Vision 2030 is a pioneering and game-changing plan that will enable sustained economic growth, diversification and job creation to the benefit of the Kingdom and its citizens for generations to come.”
He said: “Saudi Aramco will continue its commitment and remain fully engaged as a champion of transformation, ensuring that our significant contributions to the overall social and economic development of Saudi Arabia generate even greater positive impact in the future.”
Al-Falih said: “There needs to be a fundamental shift in our economic landscape if we are to reduce our unsustainable over-reliance on oil. Therefore, accelerating reforms across key economic sectors, privatization of key industries and the creation of a globally competitive small and medium-sized enterprise (SME) sector are essential to delivering Saudi Vision 2030.”
Amin H. Nasser, president and CEO of Saudi Aramco, said: “The Kingdom’s transformation vision demands innovation, technology and R&D to spur a new era of industrial growth. Saudi Aramco’s continued leadership and investments in upstream and new investments in downstream expansion will help drive the widespread and rapid in-Kingdom development of a vibrant population of SMEs focused on producing high-value finished and semi-finished products in the petrochemicals conversion sector.”
He said: “Saudi Vision 2030 will provide tremendous opportunities to strengthen Saudi Arabia’s local supply chain capabilities across every industry sector.”
However, some economists felt that Saudi Vision 2030's execution will pose a serious challenge, but that can be overcome with sustained efforts.
Ihsan Bu-Hulaiga, head of the Joatha Consulting, told Arab News: “It is important to know that Vision 2030 is based on exploiting comparative advantages of Saudi Arabia. For the last 70 years, we developed with one comparative advantage, which is oil.”
He added: “This vision is not asking for anything in essence except to take advantage of other resources of additional comparative resources the country is blessed with.”
Vision 2030 aims to propel the Kingdom from its ranking as the world's 19th largest economy to the top 15. It also includes major structural reforms, privatizations and efforts to increase government efficiency, the prince said.
Under the plan, the share of nonoil exports will rise from 16 percent to 50 percent of nonoil gross domestic product.
The Vision 2030 envisaged raising nonoil revenue to SR600 billion by 2020 and SR1 trillion by 2030 from SR163.5 billion ($43.6 billion) last year.
On opportunities for foreign investors, Al-Falih said: “The message is clear; Saudi Arabia is opening itself for further investment by those already in the Kingdom, as well as openly inviting potential future investors. Investment and export opportunities exist for global companies who want to take advantage of Saudi Arabia’s ready access to infrastructure and abundant supply of energy.”
He added: Saudi Arabia provides unrivaled competitive advantages and investment opportunities as a manufacturing and trading base to reach global markets. The government will continue to ease regulations to make the Kingdom one of the most attractive locations in the world to do business.”
John , director of economics research at the Gulf Research Center, said: “The economy is undergoing reforms that will unlock the private sector’s growth and the public sector’s efficiencies and productivity.”
The main theme of Vision 2030 is to diversify, liberalize and reform the Saudi economy, and the reliance on oil income will gradually fall, Reuters said quoting Shakeel Sarwar, head of asset management at Bahrain's Securities and Investment Co.
"I believe this vision has a lot to offer and am optimistic, but the biggest challenge will be its execution," said Mohammad Al-Shammasi, head of asset management at Riyadh-based Derayah Financial.
Commenting on Saudi Vision 2030, a regional analyst who wants to be anonymous said: “I think this is an important leap in the right direction. It shows the seriousness of purpose in this part of the world to tackle important challenges in a way that is structured and trans-formative.”
Al-Rajhi Capital said in its commentary on Saudi Vision 2030 that SMEs in the Kingdom are not yet major contributors to the Kingdom’s GDP. In fact, SMEs contribute only 20 percent of GDP whereas in advanced economies this contribution can reach up to 70 percent. To attract the necessary skills and funding, the government plans to remove the existing barriers.
The report said financial institutions would be encouraged to allocate up to 20 percent of overall funding to SMEs by 2030. The government aims to increase SMEs’ contribution to 35 percent of GDP. This should also help the government’s drive to reduce overall unemployment to 7 percent from 11.6 percent currently.
On renewable energy, Al-Rajhi Capital said domestic energy consumption is set to increase 3x by 2030. To satisfy the increase in energy demand, the government is looking to tap renewable energy potential in the Kingdom. The arid and sunny climate makes it naturally suitable to harness solar energy. Overall, 9.5 GW of renewable energy is targeted by 2030, supported by localization of the renewable energy value chain.
Al-Rajhi Capital said the thrust on privatization will achieve multiple objectives of the Vision 2030 document. Apart from improving transparency and governance, the proceeds from privatization will also aid the Kingdom’s fiscal consolidation efforts over the medium term.
The Saudi Vision 2030 plan is comprehensive and outlines proposals which are designed to wean the economy away from dependence on oil, Al-Rajhi Capital added. The emphasis is on privatization of state assets, which will result in improved transparency, also supporting the fiscal arithmetic at the same time. However, it said the large caps, which have ability to be the first entrants in areas potentially opening up to opportunities, will be key beneficiaries.
The Saudi government plans to work closely with the private sector to ensure that the economy grows for the benefit of the country’s citizens under Vision 2030, with further details to be announced soon on how this would take place.
This is according to Deputy Crown Prince Mohammed bin Salman, second deputy premier and defense minister, who provided further clarity on some initiatives at a press conference on Monday, the Saudi Press Agency reported.
He had earlier announced sweeping economic reforms to reduce the country’s dependence on oil and ensure long-term sustainable development, with plans for a $2 trillion sovereign fund.
These were some of the questions, edited by Arab News, posed by journalists to the prince at a press conference in Riyadh.
Q: We are beginning to see a new Saudi Arabia, where the contribution of the private sector is 40 percent. Privatization will focus on education and health but there are experiments in other countries where the privatization projects benefited the rich by virtue of financial capacity. How do we make sure that the results of this privatization will not make the rich richer and the poor poorer?
A: We have the experience of STC when it was privatized; its shares were offered for public subscription. Those who subscribed were the citizens and not businessmen. In the health sector, the idea now is to have the hospitals owned by the Ministry of Health to fall under a holding company and then be offered for public subscription. In this way, they will be offered to citizens directly. This will mostly prevent businessman and the wealthy from taking advantage of the privatization process because of the enhanced transparency.
Q: The vision is being carried out along two tracks: A clearer economic track and the social track. The question is about the social track: How will it materialize for citizens? Is there a timetable, whether in health, education and housing? And what about Aramco and freezing of oil production?
A: Forthcoming programs will be announced and launched under the umbrella of the Kingdom of Saudi Arabia’s Vision 2030, the first of which is the national transformation program expected to be announced by the end of the fifth month or the beginning of the sixth month. It will be an executive program to achieve the objectives of the vision in many sectors, the most important of which is the services sector, to meet the needs of citizens.
Firstly, we are talking about more than a $1 trillion, but the valuation of Aramco has not been completed. We are working on this with the banks and specialized centers. We expect that the valuation of Aramco will be more than $2 trillion.
Non-Aramco assets will also be added to the fund to the value of $300 billion in addition to the current value of the fund which is nearly $200 billion. In this way, we will have a public investment fund of more than a trillion, nearly $3 trillion.
Freezing the production of Aramco has nothing to do with its value or entry into the fund. The decision is for the benefit of Aramco. Already, the Kingdom has announced that it will welcome any process to freeze production if agreed among all the major states in OPEC, but so far the other states have not committed to a freeze.
Q: What is being done about the role of women, the driving issue, Aramco and young people?
A: Women’s driving is not a religious issue but rather a social one. Currently our society is not convinced that women should drive and there will be very negative consequences if this happens. But I stress that this issue is totally related to the desire of members of Saudi society and we cannot impose something on them they do not want. But in the future, changes will occur and we hope it will be positive changes.
On Aramco’s IPO, the company will offer less than 5 percent and companies owned by Aramco will be offered very shortly afterwards. We expect that there will be a high growth rate in the Saudi economy over the next 15 years. We do not expect it to be in the first years because these will be years of reform, but after that we expect very high growth that will make us one of the twenty largest economies in the world.
Young people are the real power of our country. They are strong, creative, ambitious and have high standards and values.
Q: You spoke about the sovereign fund and said 50 percent would be directed to foreign investments and the rest to the domestic market. Will there be a preference given to foreign investments? And what about research centers?
A: The fund looks to invest for pure profitability. The fund’s function is not to bear the responsibility of the nation. Its role is to create revenues and profits, and the role of government is to look for revenues. So, the focus of the fund is purely an investment focus.
We are using Saudi expertise and offices in planning and this is important work currently taking place with the king and the team working with him, which includes the Ministry of Planning.
Q: What is the situation with regard to the oil price, and human resources?
A: We can achieve the vision if the oil price is $30 or less and we think it is nearly impossible that oil falls below $30 by virtue of the current demand existing in the world. However, a rise in oil prices would help achieve the vision, so that the country is not vulnerable to fluctuations.
Saudi human resources are vital for the plan to work. Saudis are able to work in all sectors of the economy to help care for future generations.
Q: What is your vision on manufacturing in the Kingdom?
A: We have major global factories in the Kingdom today. We want to develop the country’s military industries to bolster and create a new economic sector that will provide many jobs and be a source of great profits.
Q: What is being done about bureaucracy and other obstacles, including convincing the public about the plan?
A: There will be intensive work with the legislative authority to issue or modify some of the regulations that have to do with the work of businessmen and Saudi companies to facilitate procedures, and to raise the level of services provided for them.
One of the obstacles was to convince some Saudis that Aramco was not part of our faith. Aramco is an investment, and there are many obstacles we’ve faced within the Saudi government, some parts of the media and among some readers. But when you explain to them things clearly, many people are convinced, like today. We need this support to achieve this vision because it will benefit everyone.
Q: Will the number of pilgrims be increased?
A: It is very difficult to greatly increase their numbers because of time and site limitations. We are dealing with the Haj as a religious duty. It is our duty to offer Haj services completely free, and this is the duty of all Saudis toward the Muslim world.
As for Umrah, there is a chance to increase Umrah performers and visitors throughout the year. We’re looking at increasing them to 30 million within the next 15 years. Yes, we will also target tourists in various fields: in history, civilization and culture, and also through some distinctive natural sites.
Q: Which services can’t be privatized? And what about relations with other countries?
A: Privatization of some services such the Red Crescent and Civil Defense is difficult because of the lack of profitability.
We will rely on Egypt and Sudan in agriculture. We will rely on Egypt in a very big way for the promotion of our exports to Europe and Asia. This will be of huge benefit for Saudi Arabia and Egypt. We also have other programs with the Gulf states linking roads, connecting rail networks and ports. We have programs with Jordan in line with the vision, and others with all neighboring countries.
Q: What role should civil society organizations play, and family owned companies?
A: We’re focusing very strongly on the development of the non-profit sector. I can assure you that most wealthy families in Saudi Arabia have a very strong desire to do non-profit work but they have not found the suitable environment and appropriate regulations that will protect their money.
We’re looking to the non-profit sector to support education, culture, health and research. There are opportunities to convert some companies into non-profit enterprises such as King Faisal Specialist Hospital. There has also been a plan mooted to do so with King Saud University.
Q: How would Vision 2030 affect sports clubs?
A: We’re focusing on the sports market or football market. We want it to be a successful market providing revenues for clubs. I think there are many issues that can be addressed in terms of reducing the cost of running Saudi clubs and creating additional profits for them. For example, if the number of foreign players were increased then payment for Saudi players will be reduced. This will reduce the running costs of clubs.
Q: How will the private sector contribute to the economy?
A: Aramco’s IPO is a part of the plan to grow the country’s Gross Domestic Product. Aramco will be a part of the private sector and not the public sector. Privatization will increase private sector productivity.
Economic objectives outlined
Deputy Crown Prince Mohammed bin Salman, second deputy premier, minister of defense and chairman of the Council of Economic and Development Affairs, stressed that the Kingdom’s Vision 2030, approved by the Cabinet on Monday, constitutes a road map for the country’s overall development in the next 15 years.
In an exclusive interview with Al Arabiya News Channel by Turki Al-Dakhil, Deputy Crown Prince Mohammed bin Salman said that the Kingdom of Saudi Arabia was founded by late King Abdul Aziz and his companions without the need for oil, pointing out that it is very dangerous to deal with Aramco company as our constitution. He said that Aramco’s reverence by some is a very big problem and we have a state of oil addiction in the Kingdom, which disrupted the development. He added “we will turn Aramco into a holding company and move its operations to companies owned by it.”
The deputy crown prince explained that high risks would have occurred if there had not been a move to offer Aramco for public subscription, saying that the investment fund will not manage Aramco and there will be a board of directors to manage it. He pointed out that we have three strong points on which nobody competes with us: They are our Arab and Islamic depth, our investment strength and our geographical location.
The following are excerpts from the interview:
Q: You have declared more than once that you will offer part of the shares of the world largest oil company, the Saudi Aramco company, for public subscription both in the Kingdom of Saudi Arabia and abroad. Everyone is talking about that Aramco is a public property; how did you manage to give up Aramco by this offering?
A: First of all, we are talking today about a vision. The vision is a road map for our goals of development and economy and other aspects for the next 15 years; Aramco has a very small part of this vision in which there are so many contents. We should not reduce them to Aramco. No doubt that Aramco is part of the main keys of this vision, and for the renaissance of the economy and the renaissance of the Kingdom of Saudi Arabia. The IPO of Aramco has several benefits. The first and most important of these benefits is transparency. People in the past used to be upset that Aramco’s files and data are not announced, unclear and not transparent. Today, it will become transparent. If Aramco is listed in the market, this means it must announce its statements and declare every quarter. It will come under the supervision of Saudi banks, Saudi analysts and thinkers. All world banks and all research and planning centers in the world will intensively monitor Aramco. Aramco today works as a facilitating limited company. This is a very dangerous matter: A giant company of this size is managed and treated as a facilitating limited company. I see the portion that will be offered for public subscription as very small, less than five percent.
Q: On what basis this percentage (less than 5 percent) has been set?
A: First, Aramco’s size is very huge. To date, there is no final valuation and we expect Aramco to be valued at more than $2 trillion. We talk about more than SR7 trillion. If only one percent of Aramco’s shares was offered for public subscription, it will be the largest IPO in the history of the world.
Aramco’s IPO will be in the Saudi market and there are ideas about finding outlets for Aramco shares outside the Saudi market. Today, you can buy gold from the US market, or oil through funds in the US market and we have something similar. For example, in the Saudi market there is the Falcom Fund which buys in several companies. Ideas include establishing a fund in the US market only for buying Aramco’s shares. This is one of the outlets that will be very important in bringing liquidity for Aramco trade or other companies in the Saudi market. The Aramco company is a part of the keys of the Kingdom of Saudi Arabia’s Vision 2030 and Aramco’s IPO will make it transparent and under the supervision of banks and everyone else.
Q: This means that you will not violate, as some say, any sacred thing when you offer Aramco or part of it for public subscription?
A: This is a very big problem.
Q: Aramco’s reverence?
A: Yes. King Abdulaziz and all men who worked with him all over the Kingdom, when they established the Kingdom, there was no oil. They founded and ran the country without oil and they lived in this country without oil ... Today, oil has become our constitution; the Qur’an and Sunnah and then petroleum. This is a very dangerous thing. We have a situation of oil addiction in the kingdom, which disrupted the development in many sectors in the past years.
Q: Is oil the main item on which the economy of the Kingdom of Saudi Arabia depends?
A: Yes. Oil comes from your work in investment no less, no more. Investment is a company that has value and should be owned as an investment, not owned as a main commodity or a main source of income.
Q: So you are seeking to diversify the sources of income?.
A: Yes. Aramco’s IPO has many benefits other than the transparency, its benefits for the Saudi market. When you offer a company of more than SR7 trillion in the Saudi market, then you have doubled the size of the Saudi market. There is also a second phase of the offering. Aramco’s parent company and then its affiliated companies will be offered in the market, it would give the Saudi market a larger size, this the second benefit for the market. The third benefit and the most technically important after Aramco’s IPO is shifting Saudi Arabia’s income from oil to investment. What remains is how to diversify your investments. Most assets of your investment portfolio are in energy companies, we must diversify the investment by borrowing and entering in other opportunities in order to balance your portfolio, and this is what will be done in the coming years, which will help to increase the size of your portfolio.
Q: So, you will offer initially five percent of Aramco’s parent company or of some of its affiliated companies?
A: Less than five percent of the Aramco’s parent company and most of Aramco’s affiliated companies. We are trying to turn Aramco into a holding company and the operating sector will only belong to the companies owned by Aramco.
On the Public Investment Fund’s extent of risk in relation to Aramco, that lack of action is much riskier and that the Public Investment Fund will not manage Aramco in the future. Aramco will be run by a Board of Directors. The Board of Directors will be elected by a general assembly, which represents Aramco’s owners. The owners may be the fund or other citizens, or investment entities at home and abroad, who will buy Aramco’s shares. This will make a very huge leap. Preliminary data points out that the fund will be in control of more than ten percent of the world’s investment capacity. The fund’s size of assets will be more than 3 percent of the global assets. We believe that it will exceed these estimates.
Question on lands:
A: Lands, we believe that their development will solve part of the problems and crises that we have in the cities, whether in commercial, financial, business or housing complexes . There are very large assets, which are areas that have not been developed so far in this field, especially the tourism field or others. I expect that these assets will amount to one trillion Saudi riyals. Investment Fund will not manage Aramco Company. There will be a Board of Directors for Investment Fund that will control 10% of the investment capacity in the world. The Investment Fund was restructured last year. With little studies, the investment fund gained profits which amounted to SR30 billion in 2015.
Q: Are these lands owned by the state?
A: Yes, these lands are owned by the state. And now we have finished the procedures regarding the transferring of their ownership to the Public Investment Fund.
Q: Thus, will they be offered or invested through the construction of malls and commercial centers?
A: No, the Fund does not enter into malls; and its size is very large. The Fund enters into huge opportunities, mostly lands and great opportunities. The lands will be transformed into projects, transformed into a company and offered at whole in the market.
Q: So, don’t you consider that you will manage, in your capacity as you are responsible for the Public Investment Fund and chairman of the Council of Economic and Development Affairs, these funds with a policy having some risks?
A: No, we have worked in the Public Investment Fund which was restructured last year. Small details have remained, and the full program of Public Investment Fund will been announced; and how to manage the resources and make the decision. The Fund’s transparency will be clear to everyone. I am the chairman of Board of Directors of Public Investment Fund. I do not have the decision. The decision is taken by the Board, according to the mechanism and governance that will be released and announced to everyone. I can not take a decision without accordance with this governance.
Q: This means that a chairman or board of directors can not dictate opinions.
A: No, the board can not dictate its viewpoints.
Q: Why?
A: Because the board of directors can not vote except based on the mechanism announced by public investment fund governance or it will be announced.
Q: What have you done after the restructuring of the Fund?
A: The introduction of new assets to the Fund; Aramco and other assets, and re-solving the problems of current assets owned by the Public Investment Fund, whether companies or other projects. There were stalled projects and restructuring some of them. Some of the problems facing some other companies owned by the Fund were solved, and this will support and increase the profitability of these companies and lead to more profits for the Fund.
Q: Some believe that the Fund was managed with a conservative investment policy, do you overpass this conservative investment policy?
A: The word conservatism and risk is sensitive. The Fund’s decision is based on a clear study, a clear analysis and a clear vision. The decision became studied and procedures have not changed. The Fund in the past was not working well, and not achieving high profits. In 2015 we were able to realize a profit from the fund amounting to approximately SR30 billion, which led and contributed to raising non-oil revenues by 35 percent in 2015. This is in one year, is this conservative? Or did it earn additional profits for the government?
Q: You stressed on three main axes in the vision released today, on what basis have you built this vision? Is it only on these elements?
A: Of course, there was a very big debate, like entering human development into it, or other elements . What is the vision? It is to put your strength areas which you can operate on them in the date of this vision.
Q: Will it be in the time that you have set?
A: In the time that we have set, we have three areas of strength that we have not exploited them and no one competed with us regarding them. The Arab and Islamic depth, we have Muslims’ Qibla and we have Madinah and very huge Islamic heritage. Our Arab depth is strong. Arabism was launched from the Arabian Peninsula and the Kingdom constitutes the large part of it. This is not being fully exploited, and we have the world’s leading investment force. Today we will launch the largest Sovereign Fund in the globe, and this will be a key driver of the globe, not only for the region, there will not be any investment or movement or development in any region of the world, without the voice of the Saudi Sovereign Fund which executes the projects of this state, if they do not succeed or we do not invest in them that will affect directly, and vice versa. The Kingdom of Saudi Arabia will be a strong investment force through its Sovereign Fund, and through other funds owned by the government, and through the most important profession; Saudi businessmen. Yes, we have many businessmen in different industries, but most businessmen are in investment companies. The Saudi mentality is an investment one, we must use it, and push the Sovereign Fund and other funds, and all Saudi companies, so as to be an investment force to move the Saudi market and the global market.
The third aspect is the geographical location. We are in a very special geographical location, we have three most important marine straits in the world and almost 30 percent of global trade passes by sea through the Kingdom and now we will have King Salman causeway between the Kingdom of Saudi Arabia and Egypt, which will be the most important land border crossing in the world and the major part of trade between Asia and Africa and a major part of trade from Europe to Asia pass through the Kingdom.
We have a huge opportunity to create logistical services, both in aviation or ports or industrial complexes or in the economic centers that will be developed or in linking the Gulf countries, Egypt, Jordan and other countries to find a very large movement by exploiting the geographical location centers. This will make many goods pass through the Kingdom of Saudi Arabia that worth hundreds of billions.
Q: From Asia to Europe?
A: Yes, this will make many commodities amounting to billions of dollars pass by. This will create very huge economic opportunities and new industries, and jobs, and at the same time, they will help in the growth of the global economy. These are the three main pillars of the vision which are your strength that must be exploited. We must not focus on other pillars in which we are weak, and we can not strongly grow them up. We want to exploit the strength areas that we have and then move on to another stage.
Q: Let me ask you about oil again, did you launch this vision due to low oil prices?
A: Never, this vision was about to be launched, whether oil price is high or low.
Q: If oil prices return and stabilize above $70, how the vision would be affected?
A: The vision will not be affected in general. If oil price rises, no doubt it will be a strong supporter and incentive, because too many procedures will be easier for us, but the vision does not need high oil prices, but it deals with less oil prices.
Q: What is the date in which you will not need oil income and therefore other income would be relied on?
A: I think that if oil stops in the year 2020, we will be able to live without it.
Q: You focused in the vision to preserve the high living standards and raising citizens’ living standards?
A: Yes, this is part of the vision. This requires the cooperation being exerted by citizens in order to maintain a better standard of living and improve it.
Q: What do you expect from citizens to do?
A: Everyone must work in it. Today we are making more effort to convince everyone, whether in the government agency or in executive, legislative or judiciary authorities, whether citizens or businessmen. This is our fate we all as Saudis must do their turns in this vision.
Q: You referred within the vision to the vital society; you talked about the development of Haj and Umrah, and providing more welfare services for pilgrims and Umrah performers?
A: Of course.
On April 25 the prince is scheduled to unveil his “Vision for the Kingdom of Saudi Arabia,” an historic plan encompassing broad economic and social changes. It includes the creation of the world’s largest sovereign wealth fund, which will eventually hold more than $2 trillion in assets — enough to buy all of Apple, Google, Microsoft, and Berkshire Hathaway, the world’s four largest public companies. The prince plans an IPO that could sell off “less than 5 percent” of Saudi Aramco, the national oil producer, which will be turned into the world’s biggest industrial conglomerate. The fund will diversify into nonpetroleum assets, hedging the Kingdom’s nearly total dependence on oil for revenue. The tectonic moves “will technically make investments the source of Saudi government revenue, not oil,” the prince says. “So within 20 years, we will be an economy or state that doesn’t depend mainly on oil.”
For 80 years oil has underwritten the social compact on which Saudi Arabia operates: Absolute rule for the Al-Saud family, in exchange for generous spending on its 21 million subjects. Now, Prince Mohammed is dictating a new bargain. He’s already reduced massive subsidies for gasoline, electricity, and water. He may impose a value-added tax and levies on luxury goods and sugary drinks. These and other measures are intended to generate $100 billion a year in additional nonoil revenue by 2020. That’s not to say the days of Saudi government handouts are over — there are no plans to institute an income tax, and to cushion the blow for those with lower incomes, the prince plans to pay out direct cash subsidies. “We don’t want to exert any pressure on them,” he says. “We want to exert pressure on wealthy people.”
Saudi Arabia can’t thrive while curbing the rights of half its population, and the prince has signaled he would support more freedom for women, who can’t drive or travel without permission from a male relative. “We believe women have rights in Islam that they’ve yet to obtain,” the prince says. One former senior US military officer who recently met with the prince says the royal told him he’s ready to let women drive but is waiting for the right moment to confront the conservative religious establishment, which dominates social and religious life. “He said, ‘If women were allowed to ride camels [in the time of the Prophet Muhammad, peace be upon him], perhaps we should let them drive cars, the modern-day camels,’” the former officer says.
Source : http://www.arabnews.com/
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