Saudi Arabia has plans to involve the private sector under its Vision 2030 reform plan, the energy minister told the World Economic Forum on Thursday.
A target is in place to make private business contribute some 65 percent of the country’s gross domestic product, Minister of Energy, Industry and Mineral Resources Khalid Al-Falih told the Annual Meeting in Davos.
Speaking on a panel entitled “Saudi Arabia’s Path to 2030,” Al-Falih said how some aspects of the “huge,” “audacious” and “ambitious” reform plan will work.
Vision 2030 calls for development of non-oil industries, small and medium enterprises, and a broader investment base. And the private sector and business will be integral to the reforms, Al-Falih said.
“Privatization is going to be key. The future Saudi Arabia is going to be private-sector led,” the minister said.
The diversification of the economy will see Saudi Arabia’s mining industry grow from being worth about $15 billion today “at least to $60 billion … or more,” the minister said.
He also described the “soft factors” that will be important in transforming Saudi Arabia’s economy.
“We are going to turn Saudi Arabia into a softer place, a more pleasant place to live. We are going to strive to make people happy within the Kingdom,” he said.
“We are going to promote tolerance in our society,” Al-Falih said. “Opening more opportunities for women is a centerpiece of Vision 2030.”
Mohammed Al-Jadaan, Saudi minister of finance, told the panel how the Kingdom plans to reform its subsidy system.
“Currently there is a lot of misdirected subsidy — people who don’t need subsidy are actually consuming more than those who actually need it,” he said.
But this will change under the new “Citizen Account” program that will be used to distribute allowances, the minister pointed out.
Fellow panel member Minister of Commerce and Investment Majid Al-Qassabi said Vision 2030 is “a proactive plan,” and that the government has a stimulus package for private sector investment.
Laurence D. Fink, chief executive of asset management giant BlackRock, said that he saw great investment opportunities in the Kingdom.
“We believe that the opportunities in the Kingdom can be very large for our investors,” he told the panel in Davos.
Andrew N. Liveris, chief executive of The Dow Chemical Company, said there is an “alignment of the government and private sector” in Saudi Arabia.
Standards of transparency are “accelerating” in the country, Liveris added.
“This is a business-orientated government… transparency is as good as anywhere we operate in, including the US,” he said.
“I think Saudi Arabia is the greatest story never told. And I think we’ve got to tell it.”