x

Abu Dhabi, UAETuesday 11 December 2018

Saudi Arabia answers questions on its transformation: the full statement

A source in Saudi Arabia’s Council of Economic and Development Affairs answers five key questions on the government's economic plan.
Skyscrapers in the King Abdullah financial district can be seen in the distance in Riyadh, Saudi Arabia. Waseem Obaidi for The National
Skyscrapers in the King Abdullah financial district can be seen in the distance in Riyadh, Saudi Arabia. Waseem Obaidi for The National

A senior source in Saudi Arabia’s Council of Economic and Development Affairs, a body overseen by Deputy Crown Prince Mohammed bin Salman, responded to questions from the Bloomberg news agency on the government’s 2017 agenda with the statement that follows. Questions have been edited for clarity.

This will be a key year for Prince Mohammed’s plan for life after oil, Saudi Vision 2030. How do you respond to those concerned that the to-do list for 2017 is too crowded?

Firstly, I would like to make it clear that the to-do list is ambitious but not impossible and we have already begun applying it. Our work has started, in the beginning of 2016, with the formulation of our future vision for the Kingdom of Saudi Arabia’s position and our approach until 2030 and applying it realistically, clearly, ambitiously and decisively by the identification of challenges and visions.

Since the announcement of the Vision, we have started the actual implementation of several courses, including promoting the government performance by forming a specialised council in the field of economy and development, integrating some ministries, creating new executive government agencies and creating executive programmes to achieve the objectives of Saudi “Vision 2030”.

With the launching of Vision 2030, several programmes, such as National Transformation Program 2020, Fiscal Balance Program 2020, bonds issuing, paying the delayed full dues to the private sector, Citizen’s Account Program, Parallel Financial Market, General Entertainment Authority and activities directed to the citizens have been launched.

These are some examples of the success stories we have. These successes are directly contributing to achieving the objectives of the Saudi Vision 2030. Thanks to God, Saudi Arabia has social, economic, political and geographic abilities to achieve the Vision.

How will the government shift from talk to action in 2017?

As I mentioned in the previous answer, the government is working in several avenues that contribute to implementing the plans and achieving the objectives, including paying the delayed full dues to the private sector, creating the Small and Medium Enterprises Authority and providing financial funds to support this sector – in addition to allocating many opportunities to enable the partnership between both public and private sectors. In 2017, four variety allocation opportunities in the Saudi market will be offered for private sector, locally and globally.

How will the government ensure that the Citizen’s Account, the new cash payout programme for Saudis, is implemented without mistakes?

Citizen’s Account Program is a national programme that aims to change the method of offering the government subsidies to be directed to low- and average-income groups rather than being comprehensive support. This programme will cover all kinds of government subsidies in the future, not only gasoline, electricity and high-cost living allowances.

I recall that on December 22, we announced the Citizen’s Account programme. We also announced that registering for the programme would start in February 1st of 2017, which was accomplished, thanks to God. Until now, more than three million Saudi families including 11 million male and female citizens have registered in the programme. This means that more than half of Saudi society has registered in less than 30 days and about five million male and female citizens registered in the first week easily and without any difficulties or technical malfunctions with high reliability.

In the kingdom, we also successfully established similar support programmes in an electronic format such as Hafiz (a programme meant to support job seekers) and social security and protection programmes. This has acquired the kingdom an experience in management of these programmes that draws on advanced technical infrastructure that we own and the electronic connectivity between more than 18 different government bodies. It should also be noted that more than 80 per cent of the registrations were done via mobile phones.

What has been said does not mean necessarily there will be no mistakes. Therefore, plans aimed at hedging against possible errors were developed. When examining the global experiences of such programmes we found that all of them have suffered some faults in the beginning and they have been improved and edited until they became efficient programmes. That is why we included in our plans very conservative numbers and budget to make sure that the programme covers all beneficiaries. In case we detected that the programme did not cover an entitled category, we will adjust it and pay them retroactivity to achieve justice in coverage and support. With the intention of achieving objectives for which the programme was created, the entitled citizen will always be a matter of concern for the programme.

How can the government prevent new taxes and a levy on expatriates from further slowing economic growth or putting too much pressure on the private sector?

The financial reforms are expected to cause some slowdown in economic growth. However, the state is working to cushion the slowdown through a number of procedures that will be taken in 2017.

How will Prince Mohammed’s team convince those who believe the initial public offering of Saudi Aramco is not in the country’s interests?

Aramco will remain a Saudi company that contributes to the domestic product.

Saudi Arabia will not give up on its majority ownership of Aramco, and will not relinquish the control of it as the owner of largest proportion.

Citizens will be given the priority for the IPO by offering the shares on the Saudi stock exchange, Tadawul.

IPO proceeds will be invested in the development and diversification of the kingdom’s economy and will raise its sustainability.

Aramco IPO will raise transparency of the company and the efficiency of its business.

All the suggested options in the IPO are there to maximise the economic benefits of the kingdom.

* Bloomberg

Follow The National’s Business section on Twitter