Crown Prince HRH Prince Mohammed bin Salman
Saudi Arabia is in discussion to sell about 1% of Aramco to a leading global company and this will be a very important deal that will boost Aramco's sales in the country of that company, said His Royal Highness Prince Mohammed bin Salman bin Abdulaziz Al Saud, Crown Prince, Deputy Prime Minister and Chairman of the Council of Economic and Development Affairs.
Discussing the most important achievements of the Kingdom's Vision 2030 programmes and projects over the past five years, in an interview with state television, he said he cannot reveal the name of the company at this moment. "It will boost Saudi Aramco industries and enhance the demand for Aramco products in that country as well as the company. There are also discussions with other companies to buy shares in a part of Aramco's assets that may be transferred to the Public Investment Fund," he said.
He said there is a wrong perception among many analysts that Saudi Arabia wants to get rid of oil. "This is entirely incorrect. We want to benefit from everything in Saudi Arabia, whether oil or other sectors," he said.
On expected oil demand fall, he said while the demand may decrease by 2030 or 2040, as analysts predict, the global supply will decline much faster than the decrease in oil demand. Most big oil exporters today will not have much to export in another 10 or 20 years. "This means that later in the future, Saudi Arabia will have to increase its production to meet the global oil demand. This is a promising part, but we should not rely just on it," he said.
HRH Crown Prince affirmed that oil greatly served the kingdom for many years. However, with the population increasing many folds, there is a need to find other sources of revenue.
"If we were to proceed in the same manner, with the growth of the population, this will affect, after 20 years or ten years, the quality of life that we have been accustomed for 50 years," he said.
HRH Crown Prince affirmed the kingdom's desire to maintain or better the quality of life of its people. He said there are huge opportunities in the kingdom in various sectors other than oil, including mining, tourism, logistics and investment.
Regarding the most important achievements that have been accomplished in the past five years since the launch of the vision, HRH Crown Prince pointed out that the achievements are many. A 20-year-old housing problem that could not be solved is beginning to ease with the housing ratio increasing from 47% to 60% in four years.
HRH Crown Prince said the non-oil sector is also growing well. In the fourth quarter of 2019, the non-oil economy grew by 4.5%. The non-oil revenues increased from SR166 billion to SR350 billion.
Foreign investments also increased three times or more than SR5 billion annually to SR17 billion. Saudi stock market, which had been stuck at between 4,000 and 7,000 points, has now exceeded 10,000 points. This indicates that the private sector has started to grow, said the Crown Prince.
HRH Crown Prince said the Public Investments Fund (PIF) is projected to have a size of SR7 trillion by 2030 but, according to present statistics, it will be worth SR4 trillion in 2025. Accordingly, the target will be increased to SR10 trillion by 2030.
He said all the numbers thought to be large and unachievable when announced were broken by the year 2020 with most of the remaining goals expected to be achieved and the kingdom will be making greater breakthroughs by 2030.
He said that the Public Investment Fund's revenue contribution to the State Treasury now is zero, and the goal of the fund is to grow and provide a very large fund so that after 2030 it becomes a tributary of the state's revenues. "Today, we do not want to consume the Public Investment Fund and transfer profits for the state budget at the expense of the fund's growth.
God willing, in 2030 the fund will reach SR10 trillion, after which we will adopt a policy according to the situation at that time."
He said the PIF will spend SR160 billion on greenfield investments this year. "What does 160 billion mean? If you see the state budget, the capital spending is SR150 billion. Today, the PIF is spending more on new investments inside the country than the capital spending of the state budget, and that means that today the PIF is moving the Saudi economy more than the state budget. This will continue to grow until 2030 to nearly SR400 billion.
HRH Crown Prince affirmed that there will be no income tax in the Kingdom of Saudi Arabia. He also said the increase of VAT to 15% is a temporary measure to tide over the present Covid-19 impact and may last one to five years maximum. "Once we restore balance after this pandemic, we will return to the normal number," he said.
On the rise in energy prices in the kingdom, especially fuel, when the Kingdom is viewed as a rich country, HRH Crown Prince said an oil state is not a rich country. "Algeria is an oil country and Iraq is an oil country, are they rich countries? The richness of a country is valued by its capabilities and economic income compared to its population. It is true that we were a very rich country when the population was 6 and 7 million. Today, we have 20 million people, and the number is growing. If we don't distribute our tools and preserve our assets and direct them in the right way, we will turn day after day into a poorer country. We must maintain these assets and direct them properly so that after a very few years, we overcome this obstacle and reach continuous, sustainable growth and prosperity," he said.
Regarding relations with Iran, HRH Crown Prince said that Iran is a neighbouring country, and Saudi Arabia hopes to have a good and distinguished relationship with Iran. "The kingdom does not want Iran to be in a difficult situation. On the contrary, Saudi Arabia wants Iran to prosper and grow, and to have interests in Iran and wants Iran to have interests in Saudi Arabia, too, to push the region and the world to grow and prosper.
"Our problem is in Iran's negative behaviour, whether its nuclear programme or its support for outlawed militias in some countries in the region or the ballistic missile programme." He indicated that the kingdom is working with partners in the region and the world to find solutions to these problems, and hoped to overcome them and to have a good, positive relationship and is beneficial to all.