JEDDAH: Close to half million jobs in the non-government sector by 2020 is expected to be generated under the kingdom’s National Transformation Program 2020 (NTP 2020) endorsed by the Saudi Cabinet late on Monday, officials said on Tuesday.
Also envisioned is a decrease in the total cost of state salaries from SAR480 billion to SAR 456 billion by 2020, which would mean a reduction in the share of public wages in the budget from 45 percent to 40 percent.
An increase in non-oil revenues from SAR163.5 billion to SAR530 billion riyals by 2020 is also planned as the kingdom reduces the economy’s dependence on oil.
In a press conference, Minister of State and Cabinet Member Mohamed bin Abdulmalik Al Al-Sheikh said NTP 2020 is part of Saudi Vision 2030, a reform drive led by Deputy Crown Prince Mohammed bin Salman, second deputy premier and defense minister, which set goals expected to be achieved during the next 15 years.
“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.
At the heart of the reform effort is a previously announced plan to float less than five percent of oil giant Saudi Aramco on the stock market, with the proceeds to help form what will become the world’s largest state investment fund, with some $2 trillion in assets.
Sheikh said NTP 2020 will be implemented through more than 500 initiatives at a cost of 270 billion riyals ($72 billion) over the next five years, with 40 percent of the funding coming from the private sector.
No income taxes
No income taxes are planned in NTP 2020, but higher government fees and taxes on “harmful products” such as tobacco are being highly considered, officials said.
Further cuts to water and electricity subsidies — already imposed last year after the country posted a record budget deficit — will lead to an additional 200 billion riyals in savings, the plan says.
The creation of non-government jobs will focus on developing Saudi industry in a range of sectors, from renewable energy to car manufacturing to tourism.
Energy, Industry and Mineral Resources Minister Khaled Al-Falih said that under the plan Saudi Arabia will be “a very strong competitor in renewable energy,” and will implement “massive” projects to produce more natural gas.
He said the ministry plans to build an international complex for marine industries that will provide 80,000 jobs and cut imports by $12 billion annually.
A number of industrial cities are also planned and slated to generate 150,000 jobs, Falih said.
Unemployment is to fall from 11.6 to 9.0 percent by 2020 under the plan, with the proportion of women in the workforce rising from 23 to 28 percent.
Education reforms will aim to push more Saudis into the private sector, with the number of students in technical and vocational training programs rising from about 104,000 to 950,000.
Noting that “transparency is crucial to the success” of the plan, it calls for regular updates on progress in reaching the targets — an unusual display of openness from Saudi authorities.
Local and foreign reporters were invited to Jeddah for the unveiling of the targets and government ministers were to be available for three days to answer questions.
(With input from SPA and AFP)
