Saudi Arabia Agrees Plans to Move Away From Oil Profits
The Saudi cabinet has approved sweeping economic reforms aimed at moving the country away from its dependence on oil profits.
Just over 70% of revenues came from oil last year but it has been hit by falling prices.
One part of the plan will see shares sold in state-owned oil giant Aramco to create a sovereign wealth fund.
Announcing the reforms, Deputy Crown Prince Mohammed bin Salman described his country as being addicted to oil.
The Vision 2030 plan, he told the Saudi-owned Al-Arabiya news channel, would ensure “we can live without oil by 2020”.
Among the reforms he announced in his interview were:
- Shares worth less than 5% of Aramco, a company he valued at up to $2.5tn (£1.7tn), will be sold
- Some of the proceeds will go towards a sovereign wealth fund worth $2tn
- A new visa system will allow expatriate Muslims and Arabs to work long term in Saudi Arabia
- Steps will be taken to diversify the economy, including investment in mineral mining and expanding military production
- Participation of women in the workforce to increase
Even just selling 1% of Aramco would create the biggest initial public offering in history, the prince said, outstripping blockbuster sales like Facebook and Alibaba.
The IMF called the Saudi plan an “ambitious, far-reaching effort” but warned implementation would be a challenge.