Study Material | Test Series
Drishti IAS
call1800-121-6260 / 011-47532596
Drishti The Vision Foundation
(A unit of VDK Eduventures Pvt. Ltd.)
prelims Test Series 2019
बेसिक इंग्लिश का दूसरा सत्र (कक्षा प्रारंभ : 22 अक्तूबर, शाम 3:30 से 5:30)
Saudi Rulers Unveil Vision 2030
May 04, 2016

Saudi Arabia's government has unveiled a long-term economic blueprint for life in a low-oil-price world. Titled Saudi Vision 2030, the plan includes regulatory, budget and policy changes that will be implemented over the next 15 years in the hope of making the kingdom less reliant on crude.

Key Highlights

  • It aims to build a ‘prosperous and sustainable economic future’ for the kingdom.

  • The programme would be built around three themes for a ‘vibrant societ’, ‘a thriving economy’ and an ‘ambitious nation’.

  • The plan highlighted the country would raise its share of non-oil exports in non-oil GDP from 16 percent to 50 percent.

  • The plan details the future of privatization in Saudi Arabia and the creation of what it calls the ‘largest sovereign wealth fund in the world’. This fund could top $3 trillion and would be linked to its vast revenues from oil.

  • The planned economic diversification also involved localizing renewable energy and industrial equipment sectors and creating high-quality tourism attractions.

  • It also plans to make it easier to apply for visas and hoped to create 90,000 job opportunities in its mining sector.

  • Saudi government will smooth the process of listing private Saudi companies and state-owned enterprises, including Aramco. This will require deepening liquidity in capital markets, fortifying the role of the debt market and paving the way for the derivatives market.

  • The reforms also included digital infrastructure, culture, education and the military.

  • Saudi Arabia could achieve its vision with oil at just $30 a barrel. It is almost impossible to go under $30 because of global demand. The plan can deal with any price, $30, $28, $70...but the plan was made with $30 in mind."

  • Saudi vision 2030 comes soon after Saudi Arabia confirmed that it planned to sell a stake of its state oil giant Saudi Aramco which was expected to be valued at more than $2 trillion. The sale would be less than 5 percent of the company and would be via an initial public offering (IPO).

  • There were also details of how the ultra-conservative Muslim kingdom would increase women's participation in the workforce from 22 percent to 30 percent.

  • It also said it would lower the rate of unemployment from 11.6 percent to 7 percent.

  • With over 50 percent of Saudi university graduates being female, the Saudi government decides continue to develop their talents, invest in their productive capabilities and enable them to strengthen their future and contribute to the development of our society and economy.

Oil-based Saudi Economy in Pressure

After a surge in prosperity over the past decade fueled by rising oil prices, Saudi Arabia’s economy is at an inflection point. A productivity-and investment-led transformation could help ensure future growth, employment, and prosperity in Saudi Arabia. The country has significant opportunities to transform its economy to become more sustainable and less dependent on oil.

  • The oil price boom from 2003 to 2013 fueled rising prosperity in Saudi Arabia, which became the world’s 19th-largest economy. GDP doubled, household income rose by 75 percent, and 1.7 million jobs were created, including jobs for a growing number of Saudi women. The government invested heavily in education, health, and infrastructure and built up reserves amounting to almost 100 percent of GDP in 2014.

  • The country can no longer rely on oil revenue and public spending for growth, in the face of a changing global energy market and a demographic transition that will significantly increase the number of working-age Saudis by 2030.

  • Saudi Arabia’s economic, labour-market, and fiscal perspectives shows that even if the country responds to the challenging conditions with policy changes such as a budget freeze or immigration curbs, unemployment will rise rapidly, household income will fall, and the fiscal position of the national government will deteriorate sharply.

  • However, a productivity-led economic transformation could enable Saudi Arabia to double its GDP again and create as many as six million new jobs by 2030. This would require about $4 trillion in investment. Eight sectors—mining and metals, petrochemicals, manufacturing, retail and wholesale trade, tourism and hospitality, healthcare, finance, and construction—have the potential to generate more than 60 percent of this growth opportunity.

To enable this transformation, Saudi Arabia will need to accelerate the shift from its current government-led economic model to a more market-based approach.


Helpline Number : 87501 87501
To Subscribe Newsletter and Get Updates.

http://www.drishtiias.com/upsc-current-affairs-article-Saudi-Rulers-Unveil-Vision-2030