Saudi Arabia’s cabinet has approved the highly anticipated Vision 2030 plan, setting out sweeping economic reforms and strategy for the next 15 years.

The cabinet approved the plan at a special session on 25 April, the kingdom’s state news agency SPA reported. Following the approval of the draft plan, the Council of Economic Affairs & Development was mandated to establish the framework and mechanisms to implement the 2030 economic programme.

At the session, the cabinet stated that all government ministries, and other related government bodies, will be required to take the necessary measures to implement the Vision 2030 plan.

Saudi Arabia has been forced to introduce sweeping reforms due to oil prices plunging from a mid-2014 peak of $114 a barrel to about $40 a barrel for most of 2016. The kingdom has embarked on spending cuts to compensate for shrinking oil revenues. The SR444.5bn oil proceeds in 2015, represented 73 per cent of the kingdom’s total revenues. This is 23 per cent less than the income generated from the sale of crude a year earlier.

The kingdom, which expects a SR326bn ($87bn) budget deficit in 2016 has resorted to drawing down on the foreign reserves and tapping the Saudi banks and financial institutions with local currency bonds to plug the budget deficit. Riyadh is now close to raising $10bn from a group of international banks, its first bid to tap international debt market for more than a decade. The loan, which is expected to be signed before the end of April will have a life span of five years.

Saudi Arabia, the biggest regional economy, is also mulling plans to monetise some of its assets as part of the borader economic reforms and has identified about 146 companies, in which its plans to sell take to public or strategic private investors. Saudi Aramco, the world’s biggest oil producer is on top of the list. 

Saudi Arabia’s Deputy Crown Prince Mohammed bin Salman al-Saud confirmed on 25 April, his plans to list less than 5 per cent of the oil giant’s shares. The prince who has been driving the country’s agenda to add new revenue streams and cut its dependence on sale of hydrocarbons for revenues said a listing will value Saudi Aramco at more than $2 trillion and all financial information related to Saudi Aramco will be disclosed.

The prince earlier in an interview with the Saudi-based TV Al Arabiaya said that the kingdom will be able to live without oil in 2020, and added that the economic vision would not be linked with the oil price.

“We have an addiction to oil,” he told Al-Arabiya. “This is dangerous… it has delayed the development of other sectors.”

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