Saudi vows to diversify economy after oil slump

The great and mighty oil producing country, Saudi Arabia, will be diversifying its economy, deputy crown prince, Mohammed bin Salman, has revealed.

According to Salban, the aim is to turn the country, which is already a tourism hub for pilgrims from all over the world, to a global investment destination.

What he termed ‘Vision 2030’ envisaged raising non-oil revenue to 600 billion riyals ($160bn) by 2020 and 1trn riyals ($267 billion) by 2030 from 163.5bn riyals ($43.6 billion) last year.

“We will not allow our country ever to be at the mercy of commodity price volatility or external markets,” Salman was quoted by Reuters to have said at his first news conference with international journalists in Riyadh palace.

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

He revealed that his expectations are that the state oil company, Saudi Aramco, will be valued at more than $2 trillion ahead of the sale of less than 5 percent of it through an initial public offering (IPO).

“So big is the state oil company because of its rights to the kingdom’s crude reserves, that selling even 1 percent of its value would create the biggest initial public offering (IPO) on earth.

“People used to be unhappy that files and data of Aramco are undeclared, unclear and not transparent. Today they will be transparent. If Aramco gets IPO-ed that means it has to announce its statements of accounts,” he said.

He said other Aramco subsidiary companies would be listed along with other publicly-held companies, and added that one major benefit of privatization was that it would increase transparency and help limit corruption.

Reuters quoted Salman as saying the kingdom would raise the capital of its public investment fund to 7 trillion riyals ($2 trillion) from 600 billion riyals ($160 billion).

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.