Plan, known as Vision 2030, outlines how the oil-reliant state will diversify its economy in the future.

25 Apr 2016 16:26 GMT

Saudi Arabia’s cabinet has agreed on a broad-based economic reform plan, known as Vision 2030, revealing how the oil-reliant state plans to diversify its economy over the next 14 years.

Prince Mohammed bin Salman, the deputy crown prince, said on Monday that the country was building up the its Public Investment Fund to become a major player in global markets.

He said Saudi Arabia was restructuring its housing ministry to increase the supply of affordable housing, and creating a “green card” system within five years to give expatriates long-term residence.

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Salman al-Ansari, founder and president of the Washington DC-based Saudi American Public Relations Affairs Committee (SAPRAC), told Al Jazeera the green card system gives more rights to expatriates to invest in the country.

“Almost 10 million foreigners send their money back to their country, they can’t invest in this country, so by this green card idea, we are giving more rights to expats for investment or buy houses,” he said.

“That will create a big move for the Saudi economy. It is a visionary kind of move to not only help the Saudi economy and Saudi citizens but also help the foreigners in the country.”

Saudi Arabia will also sell shares in state oil giant Aramco and set up the world’s largest wealth fund in line with the plan, Mohamed bin Salman said separately in an interview to the Saudi-owned Al Arabiya news channel.

“We plan to sell less than five percent of Aramco. Aramco’s size is very big. It is estimated at between $2 trillion and $2.5 trillion,” he said.

“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.”

Saudi Arabia’s economy has suffered over the last 12 months in line with the falling price of oil, with a $98bn budget deficit last year and an estimated deficit of $87bn this year. Its reserves decreased from $746bn in 2014 to $616bn today.

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“They have announced this kind of changes before. It is going to be very interesting to monitor the implementation of the new rules,” Ahmed al-Ibrahim, an expert in Saudi affairs and security, told Al Jazeera.

“To implement some of these, you need the collaboration of society. For example, if you want to increase the empowerment of women, you need to liberalise your society,” he said.

“In so many more ways, Saudi society needs to contribute to the government for the Vision 2030 to succeed.”

The country has proven oil reserves of 267 billion barrels and potential reserves of up to 900 billion.
Saudi Arabia announces ‘Vision 2030’ – AL ARABIYA

Monday, 25 April 2016
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Saudi Arabia will announce its “Vision 2030” on Monday, a comprehensive plan roadmap expected to include various economic and social aspects.

The vision is set to prepare the kingdom for an era in which it does not rely heavily on oil, as well as including a highly-anticipated National Transformation Plan (NTP).

Deputy Crown Prince Mohammed bin Salman, who is spearheading the roadmap, has previously said that NTP will include asset sales, tax increases, spending cuts, changes to the way the state manages its financial reserves, an efficiency drive, and a much bigger role for the private sector.

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The deputy crown prince had previously announced the kingdom’s plans to dedicate a $2 trillion Public Investment Fund for a post-oil economy.

Saudi Deputy Crown Prince Mohammed bin Salman is spearheading the 2030 roadmap. (File photo: SPA)

The fund plans to increase the proportion of foreign investments to 50 percent of the fund by 2020 from 5 percent now, according to Bloomberg.

As part of the new strategy, the prince had said Saudi Arabia will put 5 percent of oil firm Aramco’s shares in an initial public offering that could happen as early as next year. Aramco, Saudi’s state-owned oil giant, is the world’s largest company in terms of market capitalization.

Al Arabiya News Channel has obtained and exclusive and first-ever television interview with Prince Mohammed bin Salman – who is also Saudi Arabia’s defense minister and head of the council of Economic and Developmental Affairs (CEDA).

The interview will tackle several aspects of the deputy crown prince’s plans, among them are the full details of Saudi’s 2030 vision. The interview was conducted by Al Arabiya’s general manager and veteran TV journalist Turki al-Dakhil.

It will be aired to coincide with the announcement of the vision and a translated version will be published by Al Arabiya English shortly after the interview.