Saudi Arabia Announces "Vision 2030"

[somebozo]

Saudi Arabia wasted up to $100bn a year prior to oil price slide – official

http://www.arabianbusiness.com/saudi-prince-unveils-sweeping-reform-plan-for-economy-629579.html

The powerful young prince overseeing Saudi Arabia's economy unveiled ambitious plans on Monday aimed at ending the kingdom's "addiction" to oil and transforming it into a global investment power.

Deputy Crown Prince Mohammed bin Salman said Riyadh would raise the capital of its public investment fund to 7 trillion riyals ($2 trillion) from 600 billion riyals ($160 billion) and would sell up to five percent of shares in state oil giant Aramco.

The plans announced by Prince Mohammed also included changes that would alter the social structure of the ultra-conservative Muslim kingdom by pushing for women to have a bigger economic role and by offering an improved status to resident expatriates.

"We have developed a case of oil addiction in Saudi Arabia," Prince Mohammed said in a televised interview with al-Arabiya news channel, owned by the Al Saud ruling family, adding that Riyadh needed to cut its dependence on revenue from crude.


Even before oil prices started to plunge in 2014, economists and political analysts had long regarded Saudi Arabia'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 "Vision 2030" reforms 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.

"We restructured the fund. We included new assets in the fund, Aramco and other assets, and we fixed the problems of the current assets that the public investment fund owns, both in terms of companies and other projects," he said.

"Initial data say the fund will have control over more than 10 percent of global investment capacity."


The part privatisation of Aramco was also central to the plans, and Prince Mohammed said it would be transformed into an energy company that he valued at more than $2 trillion, and that up to 5 percent 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 percent 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.

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.

The 31-year-old has enjoyed a dizzyingly rapid rise since his father became king 15 months ago, from being little known outside the ruling Al Saud family to become the driving force of Saudi plans to prepare for a future after oil.

The government ran a deficit of 367 billion riyals ($98 billion) or 15 per cent of gross domestic product in 2015, officials said, and this year's budget plan aimed to cut that to 326 billion riyals ($87 billion).

His economic team has already announced efforts to curb wasteful government spending, to diversify revenue streams by introducing sales tax and privatising state assets, and to make reforms in the education sector.

Such was the speculation among Saudis over the details of the plan that hashtags associated with it were the top two trending on Twitter on Monday in the country with the highest rate of social media use in the Middle East.

But ambitious targets, such as raising the private sector share in the economy to 60 percent from 40 percent, reducing unemployment to 7.6 percent from 11 percent and growing non-oil income to 1 trillion riyals ($267 billion) from 163 billion riyals ($44 billion) were not explained further.

Some Saudis said they had hoped for more detail on crucial issues such as education reform. There were no further details of plans to increase revenue from tax or of any changes to the political structure of the absolute monarchy.

"For me as a Saudi, I am concerned by the education transformation plan," said a Saudi entrepreneur. "If it is not at the top of the list, why not?"

However, the plan also envisaged increasing women's participation in the workforce, something that has already been growing quickly over the past five years, to 30 percent from 22 percent.

A green card system would also be launched within five years to enable expatriate Arabs and Muslims to live and work long-term in the country, Prince Mohammed said, in a major shift for the insular kingdom.

But the focus was on economic restructuring to help reduce oil dependence.

"I think by 2020, if oil stops we can survive," Prince Mohammed said. "We need it, we need it, but I think in 2020 we can live without oil."

Bro, the Sufis the world over looked up to this great man and loved him with all their hearts, including myself. He was the rightful successor when it came to religious affairs in the Hijaz, especially in light of the noble line he came from. I know people who went to study under him and millions of people from Pakistan and the wider Muslim world made it a point to see the great sheikh when they went on Umrah or Haj. He would have led the way for reformation.
I completely understand your point about the various schools of thought in S.Arabia and you're right.

Nobility, successor, rightful..these are all BS terms..
Most of the people of so called nobility are utter crooks!

 

[Gufi]

he more I think about it the more I believe that his personality is perfect for the type of transition and the type of challenges that we face in KSA and the wider Arab world. I hope that he will strengthen the good policies and correct the bad ones. At least he and his advisors can see the problems and the need of correcting them unlike certain previous corrupt dinosaurs.

Great outline and plan, how much will be implemented is to be seen. More effort needs to be made in actually reducing waste in Government organisations and making government organisations more profitable.
Also taxes are the right step forward...

The proposed system being developed by the Saudi government would provide cash to low and middle income Saudis who rely on subsidies.

wonder how this would effect the lower segment of workers in KSA...

a government aim to reduce Saudi unemployment from 11.6% to 7%

Saudisation by force is not the way to go but to bring it in gradually as the youth compete with foreigners for the same positions on the same salary... much better long term solution

 

[somebozo]

Saudisation by force is not the way to go but to bring it in gradually as the youth compete with foreigners for the same positions on the same salary... much better long term solution

Most of the new Saudi generation is proving to be capable workers..I rather deal with them then having to deal with Indians and Lebanese in purchasing departments. Saudi purchasers tend to be very straight as well!

 

[Gufi]

We need to stop appointing these sheikhs and scholars as role models..their time is over..they are useless for modren society..no amount of sheikh and scholar knowledge will give you access to building missles, firing satellites and walking on the moon! It is senseless to dig these relics of past..

that is a sad opinion... balance is the key, do not leave your roots while you think of walking on the moon... what is with extremes on both sides

 

[somebozo]

that is a sad opinion... balance is the key, do not leave your roots while you think of walking on the moon... what is with extremes on both sides

There roots were non-existent 1400 years ago..like everything..religion also follows evolution...birth..propagation..fractionalization..infighting...tactical stability caused by pressures of war...eventually decline...

Look at Judaism 200 years ago and the Jews were to be found in more remote corners of China..and look at them today..confined to one tiny state of middle east..

 

[Gufi]

Most of the new Saudi generation is proving to be capable workers..I rather deal with them then having to deal with Indians and Lebanese in purchasing departments. Saudi purchasers tend to be very straight as well!

That is good to know... The issue at one time was their expecting a greater salary while they do the same or less work. Made doing business very difficult at times with the quota system in play and keeping Saudis as part of the work force as a must... I hope the new generation lets go of the ego and works hard and proves itself... Just stopping the huge amounts of remittance which is bleeding the nation dry will do wonders for the economy

There roots were non-existent 1400 years ago..like everything..religion also follows evolution...birth..propagation..fractionalization..infighting...tactical stability caused by pressures of war...eventually decline...

while the move forward in society is great, one will have to stop the loss of the culture of the country... Progress can be great as long as it is not eroding the fibres of society

 

[somebozo]

That is good to know... The issue at one time was their expecting a greater salary while they do the same or less work. Made doing business very difficult at times with the quota system in play and keeping Saudis as part of the work force as a must... I hope the new generation lets go of the ego and works hard and proves itself... Just stopping the huge amounts of remittance which is bleeding the nation dry will do wonders for the economy

Saudis do demand higher salaries but most of them tend to be target drives rather than time driven..They will aggressively pursue the work assigned to them but they don't like to be put in bounds of typical corporate culture. Saudis have their own way of doing work..for example..with few clients where purchasing manager has been replaced by a Saudi..there are no traditional project meetings during work hours...they prefer to meet up at one of the Riyadh cafe in the evening..and exit work early...also there is cultural mis-match..we tend to follow western routine of working 9-5 where as Saudis wish to start early and be at home by afternoon....Working after 12 is near impossibility for most Saudis..that is why Saudis are not faring well in commercial trading but doing good at factories and production plants where the day starts as early as 5AM...Saudis are night owls..they like to fall asleep at 12 Noon..

 

[Gufi]

Saudis do demand higher salaries but most of them tend to be target drives rather than time driven..They will aggressively pursue the work assigned to them but they don't like to be put in bounds of typical corporate culture.

you can not really say I am not part of a culture when you are part of that culture. There should be one set of rules and only one set of rules... but businesses are run from 4 pm to 12 am... even then there is an arrogance which really is an issue. The only thing missing in this plan was one year of compulsory military service to toughen up the nation and help free the next generations from the fixation of foreign labourers

..Saudis are night owls..they like to fall asleep at 12 Noon..

more like 8 am.... if it was up to them

 

[Jamaal Yelmaaz]

What is the vision about non stop increasing population?
One of the biggest problem of muslim countries especially Arab countrie is highly birtth rates...this will create huge social, politic and economic crisis in coming decades.....high birth rates and low quality education...limited food and energy sources and limited job availabilities.......technology impressively improving more and more...20-30 years later 50% of current job performing by people will be done by 3D printers, by smart devices, robots etc..
Any prospect vision without population program will walk on a single leg..

To me, best model is 2-3 children for each couples...
If im not mistaken 100 years ago population of KSA was 1.8-2 millions...Now 32-33 millions..so what about 100 years later ?

 

[Kompromat]

“The Green Card will allow Muslims and Arabs to live in Saudi Arabia for a long time and will be a source for revenue for the government,”


This is a really good strategy.

 

[Indrajith]

Prince vision 2030 ,, is well calculated, well formulated one... he deserve applause for his foresight...

 

[waz]

We need to stop appointing these sheikhs and scholars as role models..their time is over..they are useless for modren society..no amount of sheikh and scholar knowledge will give you access to building missles, firing satellites and walking on the moon! It is senseless to dig these relics of past..

No one appointed him, his work spoke for itself. Their time is never over, faith is eternal, he was a great reformer himself and moved with modern times.

 

[Saho]

A lot of their policies seems to be changing after the oil crisis.

 

[somebozo]

“The Green Card will allow Muslims and Arabs to live in Saudi Arabia for a long time and will be a source for revenue for the government,”


This is a really good strategy.

World has been telling them this for last 60 years..immense amount of human talent has left saudi which could otherwise have trained the next saudi generations..instead Saudis spend billions on scholarships...and studying english abroad..and we all know these scholarship students are famous for every vice...the new King Salman cancelled 40,000 scholarships.

On positive light many Saudi economist are looking at CPEC as one of the potential to expand non-oil industries..Because CPEC can integrate markets between Middle East and Central Asia.

Top economists optimistic about Saudi Vision 2030

• 

KHALIL HANWARE

Published — Wednesday 27 April 2016

JEDDAH: An air of optimism prevails all around about the Saudi National Transformation Plan (Saudi Vision 2030) announced by Deputy Crown Prince Mohammed bin Salman on Monday.

Khalid A. Al-Falih, chairman of Saudi Aramco, said: “Saudi Vision 2030 is a pioneering and game-changing plan that will enable sustained economic growth, diversification and job creation to the benefit of the Kingdom and its citizens for generations to come.”
He said: “Saudi Aramco will continue its commitment and remain fully engaged as a champion of transformation, ensuring that our significant contributions to the overall social and economic development of Saudi Arabia generate even greater positive impact in the future.”
Al-Falih said: “There needs to be a fundamental shift in our economic landscape if we are to reduce our unsustainable over-reliance on oil. Therefore, accelerating reforms across key economic sectors, privatization of key industries and the creation of a globally competitive small and medium-sized enterprise (SME) sector are essential to delivering Saudi Vision 2030.”
Amin H. Nasser, president and CEO of Saudi Aramco, said: “The Kingdom’s transformation vision demands innovation, technology and R&D to spur a new era of industrial growth. Saudi Aramco’s continued leadership and investments in upstream and new investments in downstream expansion will help drive the widespread and rapid in-Kingdom development of a vibrant population of SMEs focused on producing high-value finished and semi-finished products in the petrochemicals conversion sector.”
He said: “Saudi Vision 2030 will provide tremendous opportunities to strengthen Saudi Arabia’s local supply chain capabilities across every industry sector.”
However, some economists felt that Saudi Vision 2030's execution will pose a serious challenge, but that can be overcome with sustained efforts.
Ihsan Bu-Hulaiga, head of the Joatha Consulting, told Arab News: “It is important to know that Vision 2030 is based on exploiting comparative advantages of Saudi Arabia. For the last 70 years, we developed with one comparative advantage, which is oil.”
He added: “This vision is not asking for anything in essence except to take advantage of other resources of additional comparative resources the country is blessed with.”
Vision 2030 aims to propel the Kingdom from its ranking as the world's 19th largest economy to the top 15. It also includes major structural reforms, privatizations and efforts to increase government efficiency, the prince said.
Under the plan, the share of nonoil exports will rise from 16 percent to 50 percent of nonoil gross domestic product.
The Vision 2030 envisaged raising nonoil revenue to SR600 billion by 2020 and SR1 trillion by 2030 from SR163.5 billion ($43.6 billion) last year.
On opportunities for foreign investors, Al-Falih said: “The message is clear; Saudi Arabia is opening itself for further investment by those already in the Kingdom, as well as openly inviting potential future investors. Investment and export opportunities exist for global companies who want to take advantage of Saudi Arabia’s ready access to infrastructure and abundant supply of energy.”
He added: Saudi Arabia provides unrivaled competitive advantages and investment opportunities as a manufacturing and trading base to reach global markets. The government will continue to ease regulations to make the Kingdom one of the most attractive locations in the world to do business.”
John Sfakianakis, director of economics research at the Gulf Research Center, said: “The economy is undergoing reforms that will unlock the private sector’s growth and the public sector’s efficiencies and productivity.”
The main theme of Vision 2030 is to diversify, liberalize and reform the Saudi economy, and the reliance on oil income will gradually fall, Reuters said quoting Shakeel Sarwar, head of asset management at Bahrain's Securities and Investment Co.
"I believe this vision has a lot to offer and am optimistic, but the biggest challenge will be its execution," said Mohammad Al-Shammasi, head of asset management at Riyadh-based Derayah Financial.
Commenting on Saudi Vision 2030, a regional analyst who wants to be anonymous said: “I think this is an important leap in the right direction. It shows the seriousness of purpose in this part of the world to tackle important challenges in a way that is structured and transformative.”
Al-Rajhi Capital said in its commentary on Saudi Vision 2030 that SMEs in the Kingdom are not yet major contributors to the Kingdom’s GDP. In fact, SMEs contribute only 20 percent of GDP whereas in advanced economies this contribution can reach up to 70 percent. To attract the necessary skills and funding, the government plans to remove the existing barriers.
The report said financial institutions would be encouraged to allocate up to 20 percent of overall funding to SMEs by 2030. The government aims to increase SMEs’ contribution to 35 percent of GDP. This should also help the government’s drive to reduce overall unemployment to 7 percent from 11.6 percent currently.
On renewable energy, Al-Rajhi Capital said domestic energy consumption is set to increase 3x by 2030. To satisfy the increase in energy demand, the government is looking to tap renewable energy potential in the Kingdom. The arid and sunny climate makes it naturally suitable to harness solar energy. Overall, 9.5 GW of renewable energy is targeted by 2030, supported by localization of the renewable energy value chain.
Al-Rajhi Capital said the thrust on privatization will achieve multiple objectives of the Vision 2030 document. Apart from improving transparency and governance, the proceeds from privatization will also aid the Kingdom’s fiscal consolidation efforts over the medium term.
The Saudi Vision 2030 plan is comprehensive and outlines proposals which are designed to wean the economy away from dependence on oil, Al-Rajhi Capital added. The emphasis is on privatization of state assets, which will result in improved transparency, also supporting the fiscal arithmetic at the same time. However, it said the large caps, which have ability to be the first entrants in areas potentially opening up to opportunities, will be key beneficiaries.

An ambitious blueprint

• 
  
  Saudi Defense Minister and Deputy Crown Prince Mohammed bin Salman answers questions during a press conference in Riyadh, on Monday. (SPA)
  

ARAB NEWS

Published — Tuesday 26 April 2016

RIYADH: The Council of Ministers endorsed during its session on Monday under the chairmanship of Custodian of the Two Holy Mosques King Salman the Saudi Vision 2030.

FOREWORD

It is my pleasure to present Saudi Arabia’s Vision for the future. It is an ambitious yet achievable blueprint, which expresses our long-term goals and expectations and reflects our country’s strengths and capabilities.
All success stories start with a vision, and successful visions are based on strong pillars. The first pillar of our vision is our status as the heart of the Arab and Islamic worlds. We recognize that Allah the Almighty has bestowed on our lands a gift more precious than oil. Our Kingdom is the Land of the Two Holy Mosques, the most sacred sites on earth, and the direction of the Kaaba (Qibla) to which more than a billion Muslims turn at prayer.
The second pillar of our vision is our determination to become a global investment powerhouse. Our nation holds strong investment capabilities, which we will harness to stimulate our economy and diversify our revenues. The third pillar is transforming our unique strategic location into a global hub connecting three continents: Asia, Europe and Africa. Our geographic position between key global waterways makes the Kingdom of Saudi Arabia an epicenter of trade and the gateway to the world.
Our country is rich in its natural resources. We are not dependent solely on oil for our energy needs. Gold, phosphate, uranium and many other valuable minerals are found beneath our lands. But our real wealth lies in the ambition of our people and the potential of our younger generation. They are our nation’s pride and the architects of our future. We will never forget how, under tougher circumstances than today, our nation was forged by collective determination when the late King Abdulaziz Al-Saud — may Allah bless his soul — united the Kingdom. Our people will amaze the world again.
We are confident about the Kingdom’s future. With all the blessings Allah has bestowed on our nation, we cannot help but be optimistic about the decades ahead. We ponder what lies over the horizon rather than worrying about what could be lost.
The future of the Kingdom, my dear brothers and sisters, is one of huge promise and great potential, God willing. Our precious country deserves the best. Therefore, we will expand and further develop our talents and capacity. We will do our utmost to ensure that Muslims from around the world can visit the Holy Sites. We are determined to reinforce and diversify the capabilities of our economy, turning our key strengths into enabling tools for a fully diversified future. As such, we will transform Aramco from an oil producing company into a global industrial conglomerate. We will transform the Public Investment Fund into the world’s largest sovereign wealth fund. We will encourage our major corporations to expand across borders and take their rightful place in global markets.
As we continue to give our army the best possible machinery and equipment, we plan to manufacture half of our military needs within the Kingdom to create more job opportunities for citizens and keep more resources in our country. We will expand the variety of digital services to reduce delays and cut tedious bureaucracy.
We will immediately adopt wide-ranging transparency and accountability reforms and, through the body set up to measure the performance of government agencies, hold them accountable for any shortcomings. We will be transparent and open about our failures as well as our successes, and will welcome ideas on how to improve.
All this comes from the directive of King Salman who ordered us to plan for a future that fulfills your ambitions and your aspirations.
In line with his instructions, we will work tirelessly from today to build a better tomorrow for you, your children, and your children’s children. Our ambition is for the long term. It goes beyond replenishing sources of income that have weakened or preserving what we have already achieved. We are determined to build a thriving country in which all citizens can fulfill their dreams, hopes and ambitions. Therefore, we will not rest until our nation is a leader in providing opportunities for all through education and training, and high quality services such as employment initiatives, health, housing and entertainment.
We commit ourselves to providing world-class government services which effectively and efficiently meet the needs of our citizens. Together we will continue building a better country, fulfilling our dream of prosperity and unlocking the talent, potential, and dedication of our young men and women. We will not allow our country ever to be at the mercy of a commodity price volatility or external markets.
We have all the means to achieve our dreams and ambitions. There are no excuses for us to stand still or move backwards. Our Vision is a strong, thriving, and stable Saudi Arabia that provides opportunity for all. Our Vision is a tolerant country with Islam as its constitution and moderation as its method. We will welcome qualified individuals from all over the world and will respect those who have come to join our journey and our success.
We intend to provide better opportunities for partnerships with the private sector through the three pillars: our position as the heart of the Arab and Islamic worlds, our leading investment capabilities, and our strategic geographical position. We will improve the business environment, so that our economy grows and flourishes, driving healthier employment opportunities for citizens and long-term prosperity for all. This promise is built on cooperation and on mutual responsibility.
This is our “Saudi Arabia’s Vision for 2030.” We will begin immediately delivering the overarching plans and programs we have set out. Together, with the help of Allah, we can strengthen the Kingdom of Saudi Arabia’s position as a great nation in which we should all feel an immense pride.

Deputy Crown Prince Mohammad bin Salman
Chairman
Council of Economic and Development Affairs

I have often said that the property and real estate driven economic reforms Saudis were doing under King Abdullah were unsustainable and a massive loss of money. These Mega economic and financial cities would only turn ghost towns because the Saudi population is not dense enough to justify their benefits..now finally some sane words are coming out...


This particulare project in question is heavily loaded with corruption and mis management..

King Abdullah Financial District to be overhauled

• 
  
  A car drives past the construction site of King Abdullah Financial District, north of Riyadh, Saudi Arabia, in this photo taken on April 11, 2016. (Reuters)
  

ARAB NEWS

Published — Wednesday 27 April 2016

JEDDAH: The Kingdom is revising plans for the King Abdullah Financial District in Riyadh, after the project was plagued by delays and a lack of enthusiasm among potential tenants and investors.
The project to build the King Abdullah Financial District began in 2006; skyscrapers were to house banks and the financial regulator. Parts of the area will now be turned over to residential housing, hotels and commercial establishments.
The Saudi Vision 2030 document, released by Deputy Crown Prince Mohammed bin Salman on Monday, said authorities would “strive to salvage” the industrial cities, which were designed to diversify the economy beyond oil and create jobs.
It said the KAFD had been started “without consideration of its economic feasibility” and that the project had failed to convince the financial community to invest.
“Without any dramatic shift in direction, renting the 3 million sq. meters of built-up areas at reasonable prices, or even achieving decent occupancy rates, will be very challenging,” the vision document said.
The government will therefore aim to transform the district into a special business zone with competitive regulations, visa exemptions for foreigners working there, and direct connections to Riyadh’s King Khaled International Airport, it said. “We will also seek to repurpose some of the built-up areas and change the real estate mix, increasing the allocation for residential accommodation, services and hospitality areas.”

— With input from Reuters

The vision document that charts new course for Saudi Arabia

• 
  
  
  CLEAR DIRECTION: Deputy Crown Prince Mohammed bin Salman addresses a press conference at the Royal Court in Riyadh on Monday. (SPA)
  
  

ARAB NEWS

Published — Tuesday 26 April 2016



RIYADH: Following is the full text of the Saudi Vision 2030 document unveiled in Riyadh on Monday by Deputy Crown Prince Mohammed bin Salman:
Our Vision
“Saudi Arabia: the heart of the Arab and Islamic worlds, the investment powerhouse, and the hub connecting three continents”
Introduction
The Kingdom of Saudi Arabia is blessed with many rich assets. Our geographic, cultural, social, demographic and economic advantages have enabled us to take a leading position in the world.

DOWNLOAD THE VISION DOCUMENT

Many of these projects started during late King Abdullah with great fanfare but little practicality.

Saudi to overhaul floundering financial district, economic cities
DUBAI | BY KATIE PAUL

A view shows the construction of the King Abdullah Financial District, north of Riyadh, Saudi Arabia April 11, 2016.
REUTERS/FAISAL AL NASSER


Saudi Arabia is revising plans for a glitzy financial district in Riyadh and the creation of six industrial cities, after the projects were plagued by delays and a lack of enthusiasm among potential tenants and investors.

The government's frank, public assessments of the projects suggest Deputy Crown Prince Mohammed bin Salman is not hesitating to tackle projects which once enjoyed top-level political support as he pushes an economic reform drive launched this week.

The project to build the King Abdullah Financial District began in 2006; skyscrapers were to house banks and the financial regulator. Parts of the area will now be turned over to residential housing, hotels and commercial establishments.

A document outlining Prince Mohammed's Vision 2030 reform plan, released on Tuesday, also said authorities would "strive to salvage" the industrial cities, which were designed to diversify the economy beyond oil and create jobs.

It said the financial district had been started "without consideration of its economic feasibility" and that the project had failed to convince the financial community to invest.

"Without any dramatic shift in direction, renting the 3 million square meters of built-up areas at reasonable prices, or even achieving decent occupancy rates, will be very challenging," the document said.

The government will therefore aim to transform the district into a special business zone with competitive regulations, visa exemptions for foreigners working there, and direct connections to Riyadh's international airport, it said.

"We will also seek to repurpose some of the built-up areas and change the real estate mix, increasing the allocation for residential accommodation, services and hospitality areas."

The financial district will house the headquarters of the government's Public Investment Fund, which Prince Mohammed plans to build up in the reform drive to hold 7 trillion riyals ($1.9 trillion) of assets compared to 600 billion riyals at present.

The reform document also acknowledged difficulties in efforts to create the six "economic cities".

The most prominent of these is King Abdullah Economic City on the Red Sea coast near Jeddah, which is being developed by Emaar the Economic City 4220.SE, a publicly listed firm.

"Work has halted in several cities, and others face challenges that threaten their viability," the document said.

"We have worked in cooperation with Aramco to restructure Jizan Economic City," it said, referring to state oil giant Saudi Aramco.

"We will strive to salvage other economic cities, especially those with comparative advantages. To achieve this, we will work with the companies owning those cities to revamp them and transfer vital facilities."



(Editing by Andrew Torchia and Alison Williams)

http://vision2030.gov.sa/

Localized defense industries



The benefits of localizing our own defense industries are not limited to solely reducing military spending. It also stimulates other industrial sectors such as industrial equipment, communications and information technology, which in turn creates more job opportunities. Although the Kingdom is the world’s third biggest military spender, only 2 percent of this spending is within our Kingdom. The national defense industrial sector is limited to only seven companies and two research centers. Our aim is to localize over 50 percent of military equipment spending by 2030. We have already begun developing less complex industries such as those providing spare parts, armored vehicles and basic ammunition. We will expand this initiative to higher value and more complex equipment such as military aircraft. We will build an integrated national network of services and supporting industries that will improve our self-sufficiency and strengthen our defense exports, both regionally and internationally. Localization will be achieved through direct investments and strategic partnerships with leading companies in this sector. These moves will transfer knowledge and technology, and build national expertise in the fields of manufacturing, maintenance, repair, research and development. We will also train our employees and establish more specialized and integrated industrial complexes.



A mining sector contributing to the national economy at full potential


We have been blessed with rich mineral resources such as aluminum, phosphate, gold, copper, uranium and other raw materials. Although the mining sector has already undergone improvements to cater to the needs of our industries, its contribution to GDP has yet to meet expectations. As such, we are determined to ensure it reaches SAR 97 billion by 2020, creating 90,000 job opportunities in the process. We are planning a number of structural reforms, which include stimulating private sector investments by intensifying exploration, building a comprehensive database of the Kingdom’s resources, reviewing the licensing procedures for extraction, investing in infrastructure, developing funding methods and establishing centers of excellence. We will also form strategic international partnerships and raise the competitiveness and productivity of our national companies. This will boost their contribution to the sector’s growth, as well as to the localization of knowledge and expertise.



A renewable energy market


Even though we have an impressive natural potential for solar and wind power, and our local energy consumption will increase three fold by 2030, we still lack a competitive renewable energy sector at present. To build up the sector, we have set ourselves an initial target of generating 9.5 gigawatts of renewable energy. We will also seek to localize a significant portion of the renewable energy value chain in the Saudi economy, including research and development, and manufacturing, among other stages. From inputs such as silica and petrochemicals, to the extensive expertise of our leading Saudi companies in the production of different forms of energy, we have all the raw ingredients for success. We will put this into practice with the forthcoming launch of the King Salman Renewable Energy Initiative. We will review the legal and regulatory framework that allows the private sector to buy and invest in the renewable energy sector. To localize the industry and produce the necessary skill-sets, we will also encourage public-private partnerships. Finally, we will guarantee the competitiveness of renewable energy through the gradual liberalization of the fuels market.

 

[BLACKEAGLE]

https://www.saprac.org/uploads/2/4/0/6/24062436/saudis_strategic_vision.pdf