Special to WorldTribune.com
Saudi Deputy Crown Prince Mohammed bin Salman has unveiled a plan aimed at kicking the kingdom’s “addiction” to oil.
The 31-year-old prince believes his recently-unveiled “Vision 2030” would transform the world’s top oil exporter into a global investment powerhouse.
Paving the way, Mohammed said, would be the initial public offering (IPO) of the massive Saudi Aramco oil company, valued at more than $2 trillion. Mohammed said less that 5 percent of the company would be listed on the stock market, adding that selling even 1 percent of Aramco’s value would create the biggest IPO on earth.
The kingdom will also raise the capital of its public investment fund to 7 trillion riyals ($2 trillion) from 600 billion riyals ($160 billion), the prince said.
“We will not allow our country ever to be at the mercy of commodity price volatility or external markets,” Prince Mohammed said at a news conference on April 25.
Mohammed said other Aramco subsidiary companies would also be listed along with other publicly held companies, and added that one major benefit of privatization 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.
The kingdom will also prepare a new education curriculum and plans to produce or assemble half of its defense equipment internally in order to create job opportunities, he said.
Saudi 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).