The Saudi prince Mohammed bin Salman presents one of the most extensive reform initiatives in the country’s history. If he succeeds, to reduce dependence on oil?
the newspapers in Saudi Arabia had flowery headlines devised to build tension before the big event: “rendezvous with the future today,” headline in the English-language journal ArabNews and showed a picture of Mohammed bin Salman, the king’s son, Defense Minister and Deputy Crown Prince, more important still – head of the Committee for economic Affairs and development. In this role he wanted in 2030 to introduce a comprehensive plan, which was announced as the biggest reform initiative for the economy and society in the history of the conservative kingdom on Monday night, the Saudi Vision; the Cabinet has decided on Monday.
The core elements of the program have been the 31-year-old Prince recently in two more hour interview with the Bloomberg news agency price and in an interview with the television station al-Arabiya, the extracts in advance publications. The primary goal of the plan is therefore to reduce the dependence of Saudi Arabia of oil. Already in 2020 the income from other sources should reach 100 billion dollars, leading to a balanced budget. In 20 years, the economy will no longer be mainly driven by oil, said Mohammed bin Salman further
Long made from the tax on oil exports 90 percent of government revenues. by the decline in oil prices of more than $ 110 per barrel to temporarily less than $ 30, the proportion was but like already 2015 to below 70 percent. Saudi Arabia recorded a budget deficit of $ 98 billion – a budget of 300 billion and an economic output of about 660 bln. An economic advisor to the prince said the Kingdom had burned in the first half to $ 30 billion of its foreign exchange reserves every month to fill the gap. For 2016, the budget was reduced by 15 percent. At the same time the Prince rolls up to the procurement of the military, which he, like many other government institutions deems ineffective and wasteful. The goal is the development of its own defense industry.
impressions from the Saudi capital Riyadh.
(Photo: Waseem Obaidi / Bloomberg )make plans Saudi social contract in question
core of diversification of the economy to a new state funds are having a volume of two trillion dollars. He would thus world by far the largest such funds and to invest its capital in half in foreign companies mainly outside the oil industry. Revenue from the investments will be the most important source of the state. The money will come from foreign exchange reserves and the restructuring of existing funds in part, also Prince Mohammed wants but bring a share of “less than five percent” of the state oil company Saudi Aramco on the stock market in the year 2017th Their value, he stated with more than two trillion dollars. The state airline and telecom companies are to be privatized as well as health care, which is free for citizens. The UK, which has little foreign debt, will also be captured in 2016 ten billion dollars in international financial markets.
The Prince announced that the state would continue to reduce the subsidies, by the Saudis to date very little for fuels water had to pay electricity and basic foodstuffs. In order to $ 30 billion will be saved each year, another ten billion dollars to bring a tax on luxury goods and unhealthy products such as soft drinks in 2020. This, however, the prince touched the previous unwritten social contract of the kingdom, even though it continues to be no tax on individual income.
The citizens had a Political Voice hitherto largely bought by the comprehensive care the royal family. The higher water and energy prices have triggered but have a degree discontent that King Salman weekend the Minister Abdullah al-Hasin dismissed. At the same time the UK wants more than $ 100 billion to invest in expanding renewable energies that will have 2020 cover a quarter of the energy demand. Thus, the oil reserves are to be spared, because currently burns Saudi Arabia about a quarter of the funding for their own care.
the UK followed massive social reconstruction plans, wants the economic diversification and hang a giant state fund.
(Photo: Waseem Obaidi / Bloomberg )In addition to economic reforms looks the plan of the prince also far-reaching changes in society. So it is to be converted into a knowledge society, as it tried to neighboring Qatar. Women should get more opportunities to work; Bloomberg quoted an interlocutor of the prince as saying that the latter had made the abolition of the driving ban for women in view after recently the powers of the hated widely, especially in the young population religious police had been trimmed already.
foreigners from Muslim countries are a kind of Green Card received
foreigners from Arab and Muslim countries will in future Green with a kind of card can work in Saudi Arabia in the long term. Your employer should it turn pay fees to the state if they do not meet predetermined quotas for Saudi employees. The creation of millions of new jobs for often abroad well-educated young generation is one of the biggest challenges for Saudi Arabia. Every second citizen of the country is less than 25 years, about two-thirds of the working Saudis are employed by the state, which often pays higher wages than those that are common in the private sector. . In addition, the land is to be opened for certain forms of tourism
diplomats in Riyadh said that one must wait for such a substantial reform program the round will be – and which would be implemented it. The UK has repeatedly announced in the past reforms to reduce dependence on oil and to increase the percentage of Saudis working in the private sector. However, King Salman has abolished dozens advisory bodies after his accession, and concentrates power in two committees. The Commissioner for Economic and Development conducts his son, the staff responsible for security matters, the Interior Minister and Crown Prince Mohammed bin Nayef. In four to six weeks a clarification of the plans for the next five years should be available.
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