UAE- All systems go for Saudi Arabia's diversification plan
Date
6/7/2016 11:48:13 PM
(MENAFN- Khaleej Times) The Saudi cabinet has approved a major plan to diversify the national economy away from oil and to generate 450,000 non-government jobs by 2020.
National Transformation Programme (NTP) 2020, endorsed by the cabinet late on Monday, also seeks to cut the share of public wages in the budget to 40 per cent over the next five years, and to boost the contribution of the private sector. The NTP is one of several programmes designed to achieve the goals of Saudi Vision 2030, an 84-page document released in April by Deputy Crown Prince Mohammed bin Salman, who is leading the reform charge. At the heart of Vision 2030 is a plan to float less than five per cent of state oil firm Saudi Aramco on the stock market. The proceeds would become part of the world's largest state investment fund, with $2 trillion in assets. Profits from the investment fund would help economic diversification and provide an alternative to oil revenues that have fallen by about half since 2014. At a Press conference early on Tuesday, officials described the NTP as the first step in achieving the vision. The 112-page NTP document is a five-year roadmap that lays out targets to be met by each government ministry, and their cost. The NTP will be implemented through 543 initiatives across 24 government bodies at a cost of SR270 billion ($72 billion) over the next five years, Minister of State Mohammed Al Sheikh told the Press conference in Jeddah. "This is phase one of addressing the challenges," he said, adding there will be "no substantial fiscal impact" on the state budget, partly because some savings have already been made. Neither would income taxes be imposed, Al Sheikh said. By publishing the extent to which government targets are met, the NTP says it will ensure the transparency crucial to its success. Minister of Energy, Industry and Mineral Resources Khaled Al Falih said that under the programme, Saudi Arabia will be "a very strong competitor in renewable energy", and will implement "massive" projects to produce more natural gas, while increasing non-oil exports. Saudi oil production capacity would remain unchanged at 12.5 million barrels a day between now and 2020, the NTP says. Under the programme, the ministry plans to build an international complex for marine industries that will provide 80,000 jobs and cut imports by $12 billion annually, the minister said. A number of industrial cities are also planned and slated to generate 150,000 jobs, said Al Falih who last month replaced long-serving oil minister Ali Al Naimi. Other diverse targets under the NTP range from the tourism commission's development of the Farasan Islands in the Red Sea, the licencing of halls for women's sports and privatising Saudi Postal Corp. Among its wide-ranging goals, the Vision aims to reduce unemployment, increase women's participation in the workforce, boost private sector economic contributions, and develop cultural and entertainment activities in the kingdom.
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