S Arabia OKs vast economic reform plan
Saudi Arabia announced on Monday that it had approved an ambitious economic plan which is meant to turn the economy around from reliance on oil to being investment-driven within the next decade and a half.
The approval of the plan – dubbed "Saudi Vision 2030" – was publicized by Saudi King Salman in a televised announcement.
The plan – which appears to be the brainchild of the king's son, Deputy Crown Prince Mohammed bin Salman – is expected to set in motion what could be a period of significant economic change in the oil-rich kingdom.
It basically focuses on privatizations, further reductions in subsidies, and selling the shares of the state-owned oil company Saudi Aramco and the creation of a giant $2 trillion Sovereign Wealth Fund.
"We plan to sell less than five percent of Aramco. Aramco's size is very big. It is estimated at between $2 trillion and $2.5 trillion," said Prince Salman who is second in line to the throne and serves as the country's defense minister.
"We plan to set up a $2 trillion sovereign wealth fund... part of its assets will come from the sale of a small part of Aramco," he told the Saudi-owned Al-Arabiya news channel.
The prince further emphasized that another way to drive up non-oil revenue is by investing more in mineral mining and boosting the kingdom's own military production capacity.
To the same effect, he said a plan is on agenda to set up a holding company for military industries that would be fully owned by the government at first and listed later on the Saudi bourse.
"We are now about to establish a holding company for the military industries 100 percent owned by the government that will be listed later in the Saudi market," Prince Mohammed told
Al-Arabiya TV. "We expect it to be launched by end of 2017 with more details."
Saudi Arabia was the world's third largest arms buyer last year, with purchases of more than $87 billion last year.
The prince also said the kingdom, which annually welcomes millions of Muslim pilgrims to the holy cities of Mecca and Medina, would become more welcoming to other types of tourists — in line with Saudi Arabia's values. A new residency visa program could generate additional revenue and would allow Muslims and Arabs to live for extended periods in the country, he said.
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