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Saudi Arabia Plans To Diversify Economy Away From Oil

Saudi Arabia plans to diversify the country’s economy away from oil exports in a new strategy known as Vision 2030, state media reported on April 25.

The plan, led by Saudi Deputy Crown Prince Mohammed bin Salman and approved by the country’s cabinet, aims to end Saudi Arabia’s reliance on oil by 2020, according to Business Insider.

Saudi Arabia is the world's second-largest oil producer, and 72 percent of the country's revenues stem from the petroleum industry, BBC notes. However, falling oil prices have driven the Saudi economy to a $98 billion budget deficit in 2015, motivating the Saudi leadership to diversify the economy and make the country less vulnerable to price shocks.

"I think by 2020, if oil stops, we can survive," Prince Mohammed said, according to Business Insider. "We need it, we need it, but I think in 2020 we can live without oil."

Prince Mohammed, who also serves as Saudi Arabia's defense minister and leads its economic council, announced that the diversification plan will focus on increasing the country’s role in global investment. The country restructured its state-controlled Public Investment Fund by selling shares of state-owned oil company Aramco, encouraging Saudis to invest abroad, and moving towards controlling 10 percent of global investment capacity.

"We restructured the fund," Prince Mohammed said. "We included new assets in the fund, Aramco and other assets, and we fixed the problems of the current assets that the public investment fund owns, both in terms of companies and other projects."

In addition, the country plans to restructure its green-card system, which will allow expatriate Arabs and Muslims to love and work in Saudi Arabia long-term.

Although further details of Vision 2030 are expected to be announced later on April 25, Saudi King Salman bin Abdul-Aziz Al Saud encouraged Saudi Arabian nationals to get behind the plan and begin preparing for economic change.

"We hope citizens will work together to achieve Saudi Vision 2030," King Salman said in a statement.

Sources: Business Insider, BBC / Photo Credit: Ash Carter/Flickr

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