Mohammed bin Salman, Deputy Crown Prince of Saudi Arabia, revealed on Monday the country’s plans to diversify its economy by reducing its reliance on oil revenue.
The Arab country’s cabinet approved “Saudi Vision 2030”, a roadmap for the kingdom’s post-oil journey.
Nearly 80 per cent of Riyadh’s revenue comes from oil, but the country has been hit by the sustained drop in oil prices.
The new vision is premised on developing an economy that is not dependent on the commodity alone, Bin Salman said in an interview to state-owned Al-Arabiya TV
He said Saudi Arabia can live without oil and that, by 2020, the kingdom won’t be dependent on oil.
“When King Abdul Aziz founded the Saudi Kingdom (in the 1940s), there was no oil,” he remarked.
He stressed that the country would go ahead with reforms, even if oil rises above $70.
The deputy crown prince’s glimpses of the new package of economic and social policies included the much-hyped IPO of Saudi Aramco, as well as the green card for expatriates, plans to tackle unemployment and a proposal to enhance the participation of women in the country’s workforce.
He said that less than five per cent of Aramco would be offered to public shareholders on Saudi’s Tadawul and other bourses outside the country, adding that the oil giant was valued at up to $2.5 trillion.
Bin Salman said Saudi Arabia will introduce a “green card” system within five years, which will allow Muslims and Arabs from other countries live for long durations in the kingdom, as opposed to current visas, which allow expats a stay of up to two years, after which the permit has to be renewed.
“We should benefit from expats who have lived here for more than ten, 15 years,” he said. “They should be part of our economy and we are moving in that direction.”
The reform plans will seek to reduce citizens’ unemployment to seven per cent from the current 11.6 per cent. It also aims to increase women’s participation in the workforce to 30 per cent from 22 per cent now.
He remarked that all infrastructure development projects in the country will continue and added that nothing has stopped. The construction of the Mecca metro will be completed as soon as possible, he said.
The kingdom will also aim to increase the contribution of smaller companies to the GDP from 20 per cent to 35 per cent. In addition, it will privatise some companies in the health sector and float them, he added.
The cabinet will restructure ministry of housing, aiming to help more citizens own affordable housing, the crown prince said.
On government subsidies, he said: “They are meant for the poor, not the rich.”
He also mentioned in the interview that the country’s water ministry failed in adjusting water prices properly. “Heavily subsidized water and electricity are being misused by rich people,” he said.
“Seventy percent of government support is going to the rich people, (which shouldn’t be the case),” he concluded.
(With inputs from Reuters)