Citizens main focus of new plan

Citizens main focus of new plan
Updated 27 April 2016

Citizens main focus of new plan

Citizens main focus of new plan

RIYADH: The Saudi government plans to work closely with the private sector to ensure that the economy grows for the benefit of the country’s citizens under Vision 2030, with further details to be announced soon on how this would take place.
This is according to Deputy Crown Prince Mohammed bin Salman, second deputy premier and defense minister, who provided further clarity on some initiatives at a press conference on Monday, the Saudi Press Agency reported.
He had earlier announced sweeping economic reforms to reduce the country’s dependence on oil and ensure long-term sustainable development, with plans for a $2 trillion sovereign fund.
These were some of the questions, edited by Arab News, posed by journalists to the prince at a press conference in Riyadh.

Q: We are beginning to see a new Saudi Arabia, where the contribution of the private sector is 40 percent. Privatization will focus on education and health but there are experiments in other countries where the privatization projects benefited the rich by virtue of financial capacity. How do we make sure that the results of this privatization will not make the rich richer and the poor poorer?
A: We have the experience of STC when it was privatized; its shares were offered for public subscription. Those who subscribed were the citizens and not businessmen. In the health sector, the idea now is to have the hospitals owned by the Ministry of Health to fall under a holding company and then be offered for public subscription. In this way, they will be offered to citizens directly. This will mostly prevent businessman and the wealthy from taking advantage of the privatization process because of the enhanced transparency.

Q: The vision is being carried out along two tracks: A clearer economic track and the social track. The question is about the social track: How will it materialize for citizens? Is there a timetable, whether in health, education and housing? And what about Aramco and freezing of oil production?
A: Forthcoming programs will be announced and launched under the umbrella of the Kingdom of Saudi Arabia’s Vision 2030, the first of which is the national transformation program expected to be announced by the end of the fifth month or the beginning of the sixth month. It will be an executive program to achieve the objectives of the vision in many sectors, the most important of which is the services sector, to meet the needs of citizens.
Firstly, we are talking about more than a $1 trillion, but the valuation of Aramco has not been completed. We are working on this with the banks and specialized centers. We expect that the valuation of Aramco will be more than $2 trillion.
Non-Aramco assets will also be added to the fund to the value of $300 billion in addition to the current value of the fund which is nearly $200 billion. In this way, we will have a public investment fund of more than a trillion, nearly $3 trillion.

Freezing the production of Aramco has nothing to do with its value or entry into the fund. The decision is for the benefit of Aramco. Already, the Kingdom has announced that it will welcome any process to freeze production if agreed among all the major states in OPEC, but so far the other states have not committed to a freeze.

Q: What is being done about the role of women, the driving issue, Aramco and young people?
A: Women’s driving is not a religious issue but rather a social one. Currently our society is not convinced that women should drive and there will be very negative consequences if this happens. But I stress that this issue is totally related to the desire of members of Saudi society and we cannot impose something on them they do not want. But in the future, changes will occur and we hope it will be positive changes.
On Aramco’s IPO, the company will offer less than 5 percent and companies owned by Aramco will be offered very shortly afterwards. We expect that there will be a high growth rate in the Saudi economy over the next 15 years. We do not expect it to be in the first years because these will be years of reform, but after that we expect very high growth that will make us one of the twenty largest economies in the world.
Young people are the real power of our country. They are strong, creative, ambitious and have high standards and values.

Q: You spoke about the sovereign fund and said 50 percent would be directed to foreign investments and the rest to the domestic market. Will there be a preference given to foreign investments? And what about research centers?
A: The fund looks to invest for pure profitability. The fund’s function is not to bear the responsibility of the nation. Its role is to create revenues and profits, and the role of government is to look for revenues. So, the focus of the fund is purely an investment focus.
We are using Saudi expertise and offices in planning and this is important work currently taking place with the king and the team working with him, which includes the Ministry of Planning.

Q: What is the situation with regard to the oil price, and human resources?
A: We can achieve the vision if the oil price is $30 or less and we think it is nearly impossible that oil falls below $30 by virtue of the current demand existing in the world. However, a rise in oil prices would help achieve the vision, so that the country is not vulnerable to fluctuations.
Saudi human resources are vital for the plan to work. Saudis are able to work in all sectors of the economy to help care for future generations.

Q: What is your vision on manufacturing in the Kingdom?
A: We have major global factories in the Kingdom today. We want to develop the country’s military industries to bolster and create a new economic sector that will provide many jobs and be a source of great profits.

Q: What is being done about bureaucracy and other obstacles, including convincing the public about the plan?
A: There will be intensive work with the legislative authority to issue or modify some of the regulations that have to do with the work of businessmen and Saudi companies to facilitate procedures, and to raise the level of services provided for them.
One of the obstacles was to convince some Saudis that Aramco was not part of our faith. Aramco is an investment, and there are many obstacles we’ve faced within the Saudi government, some parts of the media and among some readers. But when you explain to them things clearly, many people are convinced, like today. We need this support to achieve this vision because it will benefit everyone.

Q: Will the number of pilgrims be increased?
A: It is very difficult to greatly increase their numbers because of time and site limitations. We are dealing with the Haj as a religious duty. It is our duty to offer Haj services completely free, and this is the duty of all Saudis toward the Muslim world.
As for Umrah, there is a chance to increase Umrah performers and visitors throughout the year. We’re looking at increasing them to 30 million within the next 15 years. Yes, we will also target tourists in various fields: in history, civilization and culture, and also through some distinctive natural sites.

Q: Which services can’t be privatized? And what about relations with other countries?
A: Privatization of some services such the Red Crescent and Civil Defense is difficult because of the lack of profitability.
We will rely on Egypt and Sudan in agriculture. We will rely on Egypt in a very big way for the promotion of our exports to Europe and Asia. This will be of huge benefit for Saudi Arabia and Egypt. We also have other programs with the Gulf states linking roads, connecting rail networks and ports. We have programs with Jordan in line with the vision, and others with all neighboring countries.

Q: What role should civil society organizations play, and family owned companies?
A: We’re focusing very strongly on the development of the non-profit sector. I can assure you that most wealthy families in Saudi Arabia have a very strong desire to do non-profit work but they have not found the suitable environment and appropriate regulations that will protect their money.
We’re looking to the non-profit sector to support education, culture, health and research. There are opportunities to convert some companies into non-profit enterprises such as King Faisal Specialist Hospital. There has also been a plan mooted to do so with King Saud University.

Q: How would Vision 2030 affect sports clubs?
A: We’re focusing on the sports market or football market. We want it to be a successful market providing revenues for clubs. I think there are many issues that can be addressed in terms of reducing the cost of running Saudi clubs and creating additional profits for them. For example, if the number of foreign players were increased then payment for Saudi players will be reduced. This will reduce the running costs of clubs.

Q: How will the private sector contribute to the economy?
A: Aramco’s IPO is a part of the plan to grow the country’s Gross Domestic Product. Aramco will be a part of the private sector and not the public sector. Privatization will increase private sector productivity.