Saudi Arabia cabinet approves Vision 2030 reform plan

The plan is expected to involve sweeping changes to diversify the economy beyond dependence on oil exports.

Skyscrapers stand in the King Abdullah financial district in Riyadh, Saudi Arabia, on April 22, 2016. Waseem Obaidi for The National

Saudi Arabia’s cabinet agreed to implement a broad reform plan known as Vision 2030, which is expected to involve sweeping change to diversify the economy beyond dependence on oil exports, state media reported on Monday.

“We hope citizens will work together to achieve Saudi Vision 2030,” King Salman said in a brief statement carried by state television.

__________

Full coverage

■ Saudi Arabia to wean itself off oil as part of economic transformation plan

■ Saudi Arabia cabinet approves Vision 2030 reform plan

■ Construction professionals welcome possible easing of Saudi visa restrictions

■ Ambitious Vision 2030 pulls Tadawul index out of the red

■ Saudi reform plan to transform flagship carrier into money-maker

■ Saudi lenders biggest winners in Vision 2030's outlook

■ Saudi Arabia: selected economic indicators – graphic

__________

Updates:

• Saudi is to sell less than 5 per cent of oil giant Aramco in IPO: deputy crown prince, Mohammed bin Salman.

• He expects the value of Aramco to exceed $2 trillion as the kingdom prepares to sell part of the company in what could be the world’s largest initial public offering. The valuation of Saudi Arabian Oil Co. hasn’t been completed.

• A new investment fund will turn the world’s top oil exporter into a global investment power, deputy crown prince, Mohammed bin Salman said. The kingdom’s existing Public Investment Fund (PIF) had made returns of 30 billion riyals ($8bn) in 2015. Asked whether he thought the management of PIF would be too autocratic, he said there would be an elected board that would make investment decisions for PIF.

• “We plan to set up a $2 trillion sovereign wealth fund … part of its assets will come from the sale of a small part of Aramco,” he said.

• The Saudi stock index recovered from early losses and was up 1.8 per cent after the reform was outlined.

• A “green card” system will be introduced within five years to allow resident expatriates in the kingdom to have more rights in order to improve its investment climate. Sweeping reforms, of which the proposed green card is one, will be implemented even if oil prices rise back above $70 a barrel, prince Mohammed said.

• Plans for a military industries holding company fully owned by government at first and offered in IPO by end of 2017.

• The reform plan will not require major spending but will involve restructuring, prince Mohammed said, adding that spending on infrastructure projects would continue. He said that the government would restructure the housing ministry to help more citizens buy homes, said subsidies should not go to the rich, and said he aimed to reduce unemployment among Saudi nationals to 7 per cent from 11.6 per cent.

Follow The National's Business section on Twitter