The powerful young prince overseeing Saudi Arabia’s economy unveiled ambitious plans yesterday aimed at ending the kingdom’s “addiction” to oil and transforming it into a global investment power. 
Deputy Crown Prince Mohammed bin Salman said the world’s top oil exporter would raise the capital of its public investment fund to 7tn riyals ($2tn) from 600bn riyals ($160bn) and would sell up to 5% of shares in state oil giant Aramco. 
The plans also included changes that would alter the social structure of the kingdom by pushing for women to have a bigger economic role and by offering improved status to resident expatriates. 
“We will not allow our country ever to be at the mercy of commodity price volatility or external markets,” Prince Mohammed said at his first news conference with international journalists, who were invited to a Riyadh palace for the event. “We have developed a case of oil addiction in Saudi Arabia,” he had earlier told Al Arabiya television news channel. 
His “Vision 2030” envisaged raising non-oil revenue to 600bn riyals ($160bn) by 2020 and 1tn riyals ($267bn) by 2030 from 163.5bn riyals ($43.6bn) last year. But the plan gave few details on how this would be implemented.
The 31-year-old prince gave assured answers to questions on the plan, and appeared to pitch his comments to appeal across the Saudi social spectrum, and in particular to young people, who face unemployment and an economic downturn despite their country’s oil wealth. 
Even before oil prices started to plunge in 2014, economists had regarded Riyadh’s fiscal policy and economic structure as being unsustainable, but reduced income from energy sales has made reform more urgent. 
At the centre of the plan is the restructuring of its Public Investment Fund (PIF), which Prince Mohammed said would become a hub for Saudi investment abroad, partly by raising money through selling shares in Aramco. 
Asked where Riyadh would find the funds for a $2tn dollar fund after recent borrowing, he said it would come from transferring the ownership of Aramco to the PIF. 
“We are speaking about more than $2tn. We expect the valuation to be more than $2tn. In addition to that there are other assets that will be added to the fund, and part of it is already added. He said it could “turn into a global investment fund with a size of up to $3tn.”
The partial privatisation of Aramco was also central to the plans, and Prince Mohammed said it would be transformed into an energy company that he expected to be valued at $2tn to $3tn, and that less than 5% of it would be listed on the stock market. 
So big is the state oil company because of its rights to the kingdom’s crude reserves, that selling even 1% of its value would create the biggest initial public offering (IPO) on earth, he said. 
He said other Aramco subsidiary companies would also be listed along with other publicly held companies, and added that one major benefit of privatisation was that it would increase transparency and help limit corruption. 
“People used to be unhappy that files and data of Aramco are undeclared, unclear and not transparent. Today they will be transparent. If Aramco gets IPO-ed that means it has to announce its statements of accounts,” he said. 
Since the prince was appointed to oversee Saudi long-term planning through the Council of Economic and Development Affairs, Riyadh’s focus on reform has grown far more urgent and far more acute. Page 3, 5
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