Saudi Arabia can live without oil income from 2020, says Prince

King Salman and Saudi Arabia’s cabinet approved on Monday “Saudi Vision 2030” to prepare the kingdom for a post-oil economy.

In an interview with Al Arabiya Television shortly after, Deputy Crown Prince Mohammed bin Salman said that Saudi Arabia plans to sell less than 5 percent of state oil company Saudi Aramco in an initial public offering (IPO).

“Aramco will be a holding company and later on we might sell some of its subsidiaries in IPOs,” the prince added, while discussing the latest reforms.

The IPO will guarantee transparency as the company will publish its financials to the public and will diversify the sources of income to include investments, besides oil, he added.

The prince said the vision, which doesn’t require more spending but will involve restructuring, is to be implemented regardless of the oil prices, he told Al Arabiya.

“We can live without oil income starting from 2020,” he said.

The kingdom plans to create a new investment fund with a value of $2 trillion which will turn it into a global investment power, he said.

The existing Public Investment Fund (PIF) had made returns of SAR 30 billion in 2015, the prince said, adding that an elected board would make investment decisions for PIF in future.

Saudi Arabia also plans to issue “green cards” to expatriates within five years which will allow resident expats to have more rights and stay longer in the kingdom.

The government would restructure the housing ministry to help more Saudi citizens buy homes. Subsidies on water and energy for the wealthy, including ministers and princes would be cut, he added.

“We want to be one of the least corrupt nations on earth and privatization is an important part in combating corruption.”

Earlier, the King said the council will develop the mechanisms needed to implement the new plan, which is aimed at and diversifying the country’s income sources, making government spending more efficient, and strengthening the economy in a low oil price environment.

The Saudi bourse rose over 150 points after the development plan was approved.

“Saudi Arabia is ‘flexing’ its muscles for the upcoming years,” said Saudi economist Talal Al Zayed.

Write to Brinda Darasha at brinda.d@argaamplus.com