- 2.1 Vision 2030
Vision 2030
Prince Mohammad bin Salman took the leadership in the restructuring of Saudi Arabia's economy, which he officially announced in April 2016 when he introduced Vision 2030, the country's strategic orientation for the next 15 years. Vision 2030 plans to reform Saudi's economy towards a more diversified and privatized structure. It details goals and measures in various fields, from developing non-oil revenues and privatization of the economy to e-government and sustainable development.[44]
Prince Mohammad bin Salman's biggest bet was his plan to restore the Saudi kingdom's dominance in global oil markets by driving the new competition into bankruptcy, by keeping the oil price low enough for a long enough period. Saudi Arabia persuaded OPEC to do the same. A few small players went bankrupt, but American frackers only shut down their less-profitable operations temporarily, and waited for oil prices to go up again. Saudi Arabia, which had been spending $100 billion a year to keep services and subsidies going, had to admit defeat in November 2016. It then cut production significantly and asked its OPEC partners to do the same.[30] -
Saudi Vision 2030 (Arabic: رؤية السعودية 2030) is a plan to reduce Saudi Arabia's dependence on oil, diversify its economy, and develop public service sectors such as health, education, infrastructure, recreation, and tourism. Goals include reinforcing economic and investment activities, increasing non-oil industry trade between countries through goods and consumer products, and increasing government spending on the military, manufacturing equipment and ammunitions.This article has multiple issues. Please help improve it or discuss these issues on the talk page. (Learn how and when to remove these template messages)This article is in a list format that may be better presented using prose. (May 2017)This article needs to be updated. (April 2016)
Details were announced on 25 April 2016 by Crown Prince Mohammad bin Salman.[1] Plans include 80 projects, each costing between $3.7 million and $20 million.
Contents
Background
In April 2016, a national transformation strategy was announced by Mohammad bin Salman Al Saud named Vision 2030, who called it an «ambitious yet achievable blueprint» based on maximizing local capacities within the country.[2]
Among other goals, the Vision 2030 has announced specific figures it aims to achieve, which include:
- Rising from number 36 to 5 on the electronic-government index
- Further localizing oil and gas sectors, from 40% to 75%
- Increase government non-oil revenue from $163 billion to $1 trillion annually
- Raise the proportion of non-oil exports 16% to 50% at least of the total non-oil GDP
- Raise the contribution of the private sector to GDP 40% to 65%
- Raise the FDI percentage of GDP 3.8% to the global average (5.7%)
- Raise the contribution of small and medium enterprises from GDP 2% to 35%
- Jump from number 25 in the Global Competitiveness Index to one of the top 10
- Effectively double the number of archaeological sites registered with UNESCO
As part of Vision 2030 there is celebration of the 87th anniversary of the Saudi founding with concerts and performances, with women for the first time being allowed into the King Fahd International Stadium in Riyadh.[4]
Implementation
The plan is supervised by Crown Prince Mohammad bin Salman. Three levels ensure application of the plan:- Overall, Vision 2030’s directions and decision-making roles lie within a Council of Ministers and a Council of Economic and Development Affairs (CEDA)
- CEDA’s director, as well as the managers of the first 12 Vision Realization Programs ensure the following-up of the plan on the five-year level.
- Annually, each entity concerned in the 2030 Vision is individually responsible for its budget and objectives.
Critical reaction
While the plan has been largely used as a platform for Deputy Crown Prince Mohammad Bin Salman Al Saud to push reform within the Saudi monarchy, it has received criticism for being a marketing ploy, as well as speculation on its financial feasibility, from around the world. In 2016 the IMF publicly warned that Saudi Arabia will have no more foreign reserve currency within a 5-year period.[5] The only concrete part of the plan that has been chosen for execution includes a 5% IPO of Saudi Aramco, which is nowhere near the required cash for the kingdom to invest into the non-oil economy, placing it at risk of financial bankruptcy and becoming a failed state.[5] The IMF further warned that the time period set by Crown Prince Mohammad Bin Salman does not reflect a realistic time required for such a transformation. While reservedly endorsing the Saudi intention to address its alarming monetary deficit, it also voiced doubts that the 14-year timeframe "sets a bold and far-reaching transformation of the economy to diversify growth, reduce dependence on oil, and increase the role of the private sector."[6] Analysts in oil prices who see the relationship between the economy and politics in Saudi Arabia and international energy markets say that a sober economic analysis describes the ability to raise such a staggering amount of money as "practically next to impossible, unless crude oil prices see a significant appreciation, or Saudi Arabia plans to sell a higher portion of Aramco."[6][7] Not only are there speculations about the financial feasibility of the reform plan, there are also social and workforce issues such as the Saudi work culture long having relied on immigrant workers' cheap labor while citizens enjoyed the benefits of a government employment and social benefits program that is now shutting down due to lack of funds. The Week reported in April 2016 that Saudi Arabia could very soon face disorder and social chaos due to a deteriorating financial situation, stating "without oil, the Saudi state has little else holding it together. The result could be yet another chaotic failed state in the Middle East",[8] while Citigroup called Saudi Vision 2030 an obituary for OPEC's role in the world.[9]Certain journalists speculated that the plan’s goals were overly ambitious, and noted that non-oil growth so far was insufficient would threaten the plan’s successful implementation.[10][11] One report felt that despite the national plan’s overall forward-thinking direction, «political reform appears to be absent from the policy agenda».[12]
Reactions were mixed following the announcement that Saudi Arabia would lift the driving ban on women.[13] Similarly to the overarching Vision 2030, some understood the announcement via royal decree as a reaction to outside pressure, while others applauded the move.[14]
International standard resort
As a component of Vision 2030, a beach resort is proposed to be built on the Red Sea between the towns of Umluj and Al-Wajh in the northern section of the Hejaz coast.[15] The resort project will involve, "50 islands and 34,000 square kilometers in a global upmarket tourism and leisure mega-development"[15][16] and will be, "governed by laws on par with international standards." This will allow women to wear bikinis in the pool and beach areas.[17][18]Multi-state city and economic zone
At a conference in Riyadh, Saudi Arabia on October 24, 2017, Saudi Crown Prince Mohammad bin Salman announced the proposed $500 billion, 10,230-square-mile (26,500 km2) multi-state city and economic zone of NEOM in Saudi Arabia, Jordan, and (via a proposed bridge over the Red Sea) Egypt.See also
- Destruction of early Islamic heritage sites in Saudi Arabia
- Economy of Saudi Arabia
- International rankings of Saudi Arabia
- List of things named after Saudi Kings
- Public Investment Fund of Saudi Arabia
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