![“The [National Transformation Program] has many legs, but the initial public offering of Aramco is a key one,” said Khalid Al Falih, the Saudi energy minister and chief executive of Aramco. Ruben Sprich / Reuters](https://thenational-the-national-prod.cdn.arcpublishing.com/resizer/v2/AHGHMR7S2VA65YZ2RJTQID623I.jpg?smart=true&auth=0c84095f535fd3f5b50d9b8a38ba4d4f0882436f5f4fb2c9a8ac0219419d3599&width=800&height=521)
Davos // A successful stock market flotation of Saudi Aramco is essential for the implementation of the kingdom’s economic diversification strategy, according to Khalid Al Falih, the energy minister.
Speaking on the sidelines of an event at the World Economic Forum annual meeting in Davos, Switzerland, Mr Al Falih, who is also the chairman of Aramco, said: “The [National Transformation Program] has many legs, but the initial public offering of Aramco is a key one.”
He made it clear that the IPO was more than just a symbolic statement of intent by the Saudi government. “The income from the IPO will allow the Public Investment Fund of Saudi Arabia (PIF) to have more funds as it goes global, so [the IPO] is a key issue for the transformation.”
His statement is a clear affirmation that the kingdom intends to push ahead as quickly as possible with the listing, despite recent speculation that it might be delayed or even shelved because of practical challenges in organising the biggest IPO in history. The government wants the NTP completed by 2020.
At the Davos event to discuss Saudi Arabia’s Vision 2030 plan, Mr Al Falih confirmed plans to make the PIF the biggest sovereign wealth fund in the world, with US$2 trillion of assets. It recently committed $45 billion to the hi-tech investment vehicle set up by Japan’s SoftBank.
The Davos session also heard from Laurence Fink, the chairman and chief executive of the world’s largest asset manager, Blackrock, that the Saudi government was committed to free market principles and transparency as part of its transformation. “Every conversation I have there is about market dynamics. There is full government commitment to take the kingdom in a more opportunistic direction,” Mr Fink said.
Mr Al Falih said that the transformation plan, part of Vision 2030, was “huge, audacious and ambitious. We’re proud of what Saudi has done, but we want to go further.”
He likened the Saudi economy to an aircraft. “We are flying a jumbo-size economy with only one engine, and that just will not fly. We need to add more engines.”
The strategy focuses on reform and privatisation, he said. Saudi Arabia aims to make the private sector account for 65 per cent of the economy by 2030. It now accounts for about 40 per cent.
Mr Al Falih also described the social aspects of the transformation plan. “We are going to turn Saudi into a softer, more pleasant place to live. We want to promote tolerance and make Saudi a model for how Islamic societies can be.”
He also spoke of the need for greater gender equality, especially for higher employment of women in the kingdom.
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