Saudi Arabia on Monday announced its intention to sell the stock market part of the oil giant Aramco and adopt a sovereign fund of 2.000 billion, the largest in the world, as part of a broad plan to reduce its dependence on oil.
These announcements were made by Deputy Crown Prince Mohammed bin Salman when the kingdom -First economy in the Arab world and exporter of brut- is strongly affected by falling prices.
“We can live without oil by 2020,” assured the son of King Salman.
The plan, presented as a “road map” for the development of the kingdom during the next 15 years, is intended to diversify the Saudi economy, which depends more than 70% of the oil when the crude prices are in free fall for about two years.
“We plan to sell less than 5% of Aramco. Aramco’s size is very large,” said Prince Mohammed, referring the first oil company in the world. This would be the highest market capitalization in the world.
“Even by selling 1% of Aramco, it will be the largest initial public stock exchange world,” he said.
Moreover, added the prince, “we plan to create a sovereign fund of 2.000 billion dollars (1.777 billion euros),” including “the assets come from the sale of a small part of Aramco” .
Mohammed bin Salman said he would be the “largest investment funds in the world, by far”
-. “Vision 2030 “-
dethrone the Norwegian sovereign fund that weighed Monday morning 866 billion dollars, almost 2.5 times less than the planned Saudi funds
.” This fund will control over 10% of the investment capacity in the world (…) and the volume of its assets represent more than 3% of existing assets, “said the Saudi prince, also defense minister.
“no investment project or development in any region of the world will be only through the Saudi sovereign funds,” he predicted.
He said the new fund will include some $ 600 billion of assets currently available to the kingdom, as well as dividends from the partial sale of Aramco and real estate and industrial companies of the State .
This vast plan of reforms and restructuring of the Saudi economy was approved Monday by the Cabinet at its weekly meeting chaired by King Salman.
Aged 30 year-old son also chairs the Council of economic Affairs and development, a body that oversees Saudi Aramco, the economic pillar of the kingdom that controls proven reserves of over 261 billion barrels and employs over 61,000 people.
Initiator of the plan called “Saudi Vision 2030″, the young prince defended the opening of Aramco local and foreign capital, which, according to him, will ensure “transparency” in the management of the oil giant.
– “morbid dependence” –
“We all have an unhealthy dependence on oil-vis Saudi Arabia, which is dangerous. This has hindered the development of several sectors in recent years, “he insisted, in an apparent reference to criticism of the partial privatization of Aramco.
After Aramco,” it was the turn of subsidiaries being introduced on the stock market, “he told the prince, assuming an economy that depends” more oil but (firing) its investment income. “
the Saudi economy crisis is expected to grow at 1.2% this year, against 3.4% in 2015.
the collapse of oil prices has forced Gulf states, including Saudi Arabia, to take unprecedented measures for the reduction of fuel subsidies and the imposition of new indirect taxes.
the kingdom, which forecasts a deficit of $ 87 billion this year with a deficit of 98 billion in 2015 , froze major economic projects.
in this country, where its 21 million citizens were accustomed to the welfare state, reducing subsidies on water and electricity sparked stir and led to the dismissal of the minister in charge of these two areas.
“the subsidies should benefit the middle class and the less fortunate” while “70% of these subsidies go to the rich,” he Mohammed said the prince denouncing the passage “corruption” in the kingdom and affirming now bind any arms deal to the development of a local military industry.
“now the Ministry of Defence and other security and military bodies will rise from the contract with a foreign supplier if it is linked to a domestic industry, “said the Saudi prince.
04/25/2016 7:11:23 p.m. – Riyadh (AFP) – AFP © 2016
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