Saudi Arabia Planning for Post-oil Economy

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May 2, 2016

Saudi Arabia is planning to diversify, moving its economic focus from being overwhelmingly dependent on oil.

Deputy Crown Prince Mohammed bin Salman made the announcement of Vision 2030, which includes a plan to sell shares in Aramco, a government-owned energy company, and also create what many say could be the world’s largest state-owned investment fund.

Oil production and sales have formed the bulk of the Saudi economy for decades. However, the latest drop in global oil prices (to $40 a barrel in April 2016, down from a relative high of more than $100 a barrel in early 2014) has accelerated a drive that the country’s leaders say that they were already on to spread their efforts across a number of exports and industries.

The plan, the government says, is to be able to live without oil incomes by 2020. The 2030 in the title of the program is the ultimate goal.

The crown prince made the announcement a press conference, something of a rare occurrence in Saudi Arabia. An 84-page booklet accompanied the announcement.

The plan is not to sell the entirety of ownership in Aramco; rather, the initial public offering will include no more than 5 percent of ownership in the high-performing company. Even that allotment of wealth into other hands will net the company upwards of $2 trillion, experts said.

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