Saudi Arabia confirms April announcement of reform agenda

17 April 2016

Kingdom’s deputy crown prince says it will cover developmental and economic programmes

Riyadh has confirmed it will announce the economic reform agenda in April, detailing plans on how to prepare the kingdom for the post-oil era.

The “Vision for the Kingdom of Saudi Arabia” will be unveiled on 25 April, encompassing several developmental, economic, social and other programmes, Deputy Crown Prince Mohammed bin Salman al-Saud told US-based news agency Bloomberg.

One component of the broader economic agenda is the National Transformation Plan (NTP), which will be launched 30-45 days after the announcement in April.

The kingdom plans to transform Saudi Aramco from an oil company into an energy and industrial conglomerate. The future of the Public Investment Fund (PIF) will also be part of the comprehensive vision, said the prince.

Saudi Arabia is seeking to reform its economy to reduce the kingdom’s reliance on hydrocarbons for revenues after oil prices plunged from a mid-2014 peak. The prince in an earlier interview with Bloomberg said Saudi Arabia’s reform agenda includes raising non-oil revenue by $100bn by 2020, as well as turning the PIF into the world’s largest sovereign wealth fund for the kingdom’s most prized assets.

Saudi Arabia intends to sell less than 5 per cent of Aramco’s parent in an initial public offering that could happen as early as next year, and transfer the remaining shares to PIF, inflating its size to $2 trillion.

Apart from share sale of Aramco, the kingdom has identified about 146 state-owned entities that could be privatised or sold to the public as Opec’s largest oil producer looks to monetise assets to meet budget shortfalls amid low oil prices and shrinking revenues.

The list, prepared by the Economy & Planning Ministry, includes subsidiaries of core government ministries and government-related entities (GREs), sources familiar with the matter told MEED on 27 March.

 

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