Saudi prince unveils sweeping plans to end 'addiction' to oil

The powerful young prince overseeing Saudi Arabia's economy unveiled ambitious plans on Monday aimed at ending the kingdom's "addiction" to oil and transforming it into a global investment power.

Deputy Crown Prince Mohammed bin Salman said the world's top oil exporter would raise the capital of its public investment fund to 7 trillion riyals ($2 trillion) from 600 billion riyals ($160 billion) and would sell up to 5% of shares in state oil giant Aramco. 

The plans also included changes that would alter the social structure of the ultra-conservative Muslim kingdom by pushing for women to have a bigger economic role and by offering improved status to resident expatriates.

"We will not allow our country ever to be at the mercy of commodity price volatility or external markets," Prince Mohammed said at his first news conference with international journalists, who were invited to a Riyadh palace for the event.

"We have developed a case of oil addiction in Saudi Arabia," he had earlier told al-Arabiya television news channel.

His "Vision 2030" envisaged raising non-oil revenue to 600 billion riyals ($160 billion) by 2020 and 1 trillion riyals ($267 billion) by 2030 from 163.5 billion riyals ($43.6 billion) last year. But the plan gave few details on how this would be implemented, something that has bedevilled previous reforms.

The 31-year-old prince gave assured answers to questions on the plan, and appeared to pitch his comments to appeal across the Saudi social spectrum, and in particular to young people, who face unemployment and an economic downturn despite their country's oil wealth.

Even before oil prices started to plunge in 2014, economists had regarded Riyadh's fiscal policy and economic structure as being unsustainable, but reduced income from energy sales has made reform more urgent.

At the center of the plan is the restructuring of its Public Investment Fund (PIF), which Prince Mohammed said would become a hub for Saudi investment abroad, partly by raising money through selling shares in Aramco.

Opening Aramco accounts 

The partial privatization of Aramco was also central to the plans, and Prince Mohammed said it would be transformed into an energy company that he expected to be valued at $2 trillion to $3 trillion, and that less than 5% of it would be listed on the stock market.

Page 1 of 3
About the Author