Deputy Crown Prince Muhammad Bin Salman, along with the second deputy premier and minister of defense, who is also the chairman of the Council of Economic Affairs and Development, have just announced a sweeping reform plan on Monday where there would be a transformation into a global investment power and detach from the world’s top oil exporter off crude by 2020.
Almost eight decades after oil was first found in the country, it has become the biggest income source, being about 80 percent of their income, but Prince Muhammad Bin Salman has stated that “by 2020 if oil stops we can survive”.
“We need it, we need it, but I think in 2020 we can live without oil,” he added.
Also, some other Gulf Arab monarchies are taking their own plans to reduce the spending of it. The United Arab Emirates have thrown away subsidies for transport fuels.
The Kuwaiti parliament just approved a government plan to increase the price of water and electricity for expatriates and businesses in the OPEC nation, but it was also voted against, mainly by the homes of Kuwaiti citizens. A second and final round of voting is scheduled on April 26.
This is Prince Bin Salman’s plan to detach from oil. Also, Prince Mohammed is leading the biggest economic shakeup since the founding of Saudi Arabia in 1932, with measures that represent a radical shift for a country built on petrodollars.
This drive may face anger from a population used to government generosity and power circles stunned by the rapid rise of the 30-year-old prince.
The plan consists that the state-controlled Public Investment Fund will be restructured to become a focal point for Saudi investment overseas, where also partly will be by raising money through sales of shares in national oil giant Saudi Aramco.
The Saudi rules back in the days
Past rulers of Saudi Arabia usually avoided seeking for additional revenue from their citizens. Since water prices surged after the reduction in subsidies, Saudis turned to social media to express their anger at the government. On Saturday, King Salman fired the water minister.
Also, the Saudi leaders have a unique social challenge, where other nations implementing these economic changes don’t have to manage with them yet.
While steps have been taken to get women into the workforce, the kingdom still prohibits them from driving, since the country’s feared religious police, still enforce gender segregation and prayer times, despite having their powers to arrest were restricted this month.