Saudi Arabia will rapidly from dependence on oil. This must be done, inter alia, with the partial scholarship bringing the state oil company Saudi Aramco, in financial terms, the largest company in the world. Nearly 5 percent of Aramco’s possible next year if the stock market.
“I think we will survive in 2020 without oil,” said the Prince Mohammed bin Salman Monday with the announcement of Vision 2030, the blueprint for a thorough reform of the Saudi economy. “We have developed an addiction to oil. It must come to an end. ” Saudi Arabia is now 90 percent dependent on oil.
The 30-year-old Prince Mohammed, the principal architect of the so-called “transformation plan. Saudi Arabia wants to transform a lazy, almost entirely on the export of crude oil dependent economy into a dynamic country that lives by the private sector for at least 60 percent. A number of revenue sources other than oil should be tapped over the next fifteen years. The main element of the plan is the reform of the Public Investment Fund (PIF), a state fund for investments. It is also considerably increased thanks to the sale of shares Aramco, from the current 600 billion rials (142 billion euros) to 7 trillion rials (1.66 billion euros). Thus, the PIF would be the largest state investment fund in the world. Even sales of 1 percent of Aramco would be enough for it, according to the prince. “We will soon have control over more than 10 percent of global investment capacity.”
Saudi Arabia wants to do with IPO end to oil dependency
Vision 2030 yesterday was not published in its entirety. King Salman bin Abdul Aziz al Saud announced in a brief television speech that the Government adopted the plan. Next, details of which were announced by Prince Mohammed, in an interview with the television channel Al Arabiya, which is owned by the royal family. The young prince, second in line to the throne, has a meteoric rise experienced in the Saudi hierarchy. After the death of King Abdullah, early last year, his brother Salman moved to the highest position in the absolute monarchy. The 80-year-old Salman appointed his son Muhammad on two key government posts: Minister of Defense and Chairman of the Council for Economic Development.
The 80-year-old Salman appointed his son Muhammad on two key government posts: Minister of Defense and Chairman of the Council for Economic Development
On both counts Muhammad pursued a policy change through. Saudi Arabia was under him sail internationally a stronger currency and made serious efforts intentions were discussed for years in Riyadh economically (as was presented the plan Vision 2020 in 2002), but never really acted upon. That’s not happened yet, but the statements on Vision 2030 are concrete enough for observers to trust that they are effectively implemented. A catalyst for Vision 2030 is the sharp drop in world oil prices. Which plummeted in 2014 to 110 dollars, now, $ 40 per barrel. Saudi Arabia had the previous ten years the state coffers see flooding itself, but is now faced with sharply reduced revenues. To finance current expenditure, this year was even for the first time made a selection in the treasury.
in the longer term, with a low oil price and on unchanged policies, the modernization plans in jeopardy
In the longer term, with a low oil price and on unchanged policies, the modernization plans in jeopardy. So the government wants large-scale investment in infrastructure. Center built in the desert, five “economic cities”, there are new airports and railways (also to expand Islamic tourism) and the big cities have subways, starting with the capital Riyadh. Saudi Arabia and other states in the Persian Gulf must prepare for a long period of low oil prices, as reported to the International Monetary Fund (IMF) Monday. The Gulf States do, therefore, to diversify their economies well, according to the IMF. Last year, the Gulf States has totaled 346 billion euros in lost profit. This year may increase according to the fund to 444 billion euros.