There was a ruler of the genus Saud, who had a great plan. He wanted to be Saudi Arabia finally make independent of the country’s blessing and curse, the petroleum. And so King Faisal vowed to open the economy of his empire sealed to modernize, to build new industries. That was in 1970.
Now summon back a Saudi ruler to leave. Prince Mohammed bin Salman al-Saud, son of the current king Salman and second successor has, the subjects his “Saudi Vision 2030″ announced. The 31-year-old has almost half a century ago exactly the same goal, like his uncle Faisal: to reduce dependence on oil. But really.
If we are to succeed, the Saudi state and the Saudi need engage society in a profound change. Already in 20 years should the economy not be determined predominantly by oil, is Muhammad’s vision of the consulting firm McKinsey has contributed their part. Saudi Arabia should become an “investment-driven economy”. they should initially driving a sovereign wealth funds, as it has not yet seen the world: 2,000 billion dollars at the box office. Initial funding will come mainly from the oil sector. Among other things, the prince wants to bring five percent of the state-owned Saudi Aramco on the stock exchange.
Saudi Arabia rulers have vowed since Feisal times in each of at least ten development plans to make the economic structure more diverse and to emancipate from the ups and downs of commodity exchanges. Five kings have used all their power and hundreds of billions of dollars.
The result: 2014 saw the sale of oil for more than 85 percent of the Saudi export earnings; almost all of the remainder contributed petrochemicals, and other mineral resources. Last year the state budget dined still around three-fourths of petrodollars. And the revenues are no longer sufficient because of the drop in oil prices. Last year, the state budget had a record deficit of 87 billion euros converted. This year it could be even higher if the price of oil not recovered.
Nobody contradicts Prince Mohammed when he says that it could not go on. The Federal Intelligence Service called Saudi Arabia in a recent analysis of “a powder keg”. Since 1970, the population has quintupled: from 6 to 30 million people. It is divided into rich and poor, 20 million residents and 10 million migrant workers. And the social divide is growing.
In cities like Riyadh or Jeddah striking how poor the second largest oil producer in the world acts in comparison to neighbors like Abu Dhabi or Qatar. Half-ruined houses characterize the many quarters. On the streets young men lounging with green portfolios under their arms around – the signal: I’m looking for a job. More than 40 percent of young Saudis are unemployed, estimates the International Monetary Fund. More than a third of the local population is not 19 years old.
Perspectives have the boys hardly. The private sector is totally undeveloped. Almost 90 percent of the working Saudis are public servants. But now the state must save, as well as the oil sector.
For years building the dynasty of four new industrial cities retort. But how will Saudi Arabia attract the necessary for the construction of high-tech sectors foreign professionals? Still prohibits the strictly Islamic country Bibles, cinemas – and women driving.
Saudi Aramco also stood at an IPO before upheavals. The non-transparent state company would be accountable to its shareholders: about about the actual oil reserves (since 1989 are Saudi Arabia every year a number by 260 billion barrels, even though it has since brought 80 billion out of the ground). Or, even more delicate, on the distribution of oil billions. Of which expected a significant proportion of thousands-strong ruling family benefit.
Prince Mohammed has the right plans in view of the problems of his kingdom. His “Saudi Vision 2030″ seeks to eliminate corruption and bureaucracy to strengthen the private sector, to improve the education system – and to open his country to the world. If he manages this, Saudi Arabia could finally reduce its dependence on oil. But it works only if its elites play.
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