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| Saudi Prince Shares Plan to Cut Oil Dependency and Energize the Economy | Saudi Prince Shares Plan to Cut Oil Dependency and Energize the Economy |
| (about 2 hours later) | |
| BEIRUT, Lebanon — The ambitious young prince who oversees the economy of Saudi Arabia rolled out a grand vision for the future of the kingdom on Monday that aspires to reduce its dependence on oil, stimulate the private sector and reduce government subsidies — all while ensuring rising living standards for Saudi citizens. | BEIRUT, Lebanon — The ambitious young prince who oversees the economy of Saudi Arabia rolled out a grand vision for the future of the kingdom on Monday that aspires to reduce its dependence on oil, stimulate the private sector and reduce government subsidies — all while ensuring rising living standards for Saudi citizens. |
| The plan seeks to steer the Arab world’s largest economy through the double onslaught of low oil prices, which have undermined government revenues, and youthful demographics, which will add millions of job-seekers in the coming years. | |
| The plan’s introduction, which was exhaustively covered by the Saudi-owned news media, also signaled a milestone in the meteoric rise of the prince, Mohammed bin Salman, who has gone from being a little-known member of a sprawling royal family to the kingdom’s most prominent official in just over a year. | The plan’s introduction, which was exhaustively covered by the Saudi-owned news media, also signaled a milestone in the meteoric rise of the prince, Mohammed bin Salman, who has gone from being a little-known member of a sprawling royal family to the kingdom’s most prominent official in just over a year. |
| Prince Mohammed, who is about 30, has been given a broad array of positions since his father, King Salman, ascended to the Saudi throne last year and has not hesitated to wield his influence. As defense minister, the prince has overseen a costly war in Yemen and Saudi efforts to push back Iranian influence in Syria and elsewhere. He is also second in line to the throne, and leads a powerful council that oversees the economy. | Prince Mohammed, who is about 30, has been given a broad array of positions since his father, King Salman, ascended to the Saudi throne last year and has not hesitated to wield his influence. As defense minister, the prince has overseen a costly war in Yemen and Saudi efforts to push back Iranian influence in Syria and elsewhere. He is also second in line to the throne, and leads a powerful council that oversees the economy. |
| Saudi officialdom has been abuzz for months about a comprehensive National Transformation Plan, though its release has been repeatedly delayed. Monday’s announcement of the “Saudi Vision 2030” was billed as an aspirational guide, with details to be filled in later. | Saudi officialdom has been abuzz for months about a comprehensive National Transformation Plan, though its release has been repeatedly delayed. Monday’s announcement of the “Saudi Vision 2030” was billed as an aspirational guide, with details to be filled in later. |
| In an extensive prerecorded interview with Saudi-owned Al Arabiya television broadcast in conjunction with the plan’s release, Prince Mohammed painted an optimistic picture of the kingdom’s future, one in which declining oil revenues would be replaced by the returns from enormous government investments and a robust private sector. | In an extensive prerecorded interview with Saudi-owned Al Arabiya television broadcast in conjunction with the plan’s release, Prince Mohammed painted an optimistic picture of the kingdom’s future, one in which declining oil revenues would be replaced by the returns from enormous government investments and a robust private sector. |
| “We have developed an oil addiction in the kingdom of Saudi Arabia, among everyone,” Prince Mohammed said. “That is dangerous, and that is what has hampered the development of many different sectors in recent years.” | “We have developed an oil addiction in the kingdom of Saudi Arabia, among everyone,” Prince Mohammed said. “That is dangerous, and that is what has hampered the development of many different sectors in recent years.” |
| He described steps the government would take to reduce that dependence, like selling shares of the state oil giant, Saudi Aramco, injecting money into a public investment fund and privatizing sectors of the economy, such as airports, education and health care. | He described steps the government would take to reduce that dependence, like selling shares of the state oil giant, Saudi Aramco, injecting money into a public investment fund and privatizing sectors of the economy, such as airports, education and health care. |
| “I think that by 2020, if the oil stops, we’ll be able to live,” Prince Mohammed said. | “I think that by 2020, if the oil stops, we’ll be able to live,” Prince Mohammed said. |
| Many energy-reliant states have issued such proclamations in the past, particularly when prices were plunging, but carrying out the programs has always proved problematic at best. Saudi officials themselves, foreign analysts and economists were quick to note, have been speaking for decades about reducing the kingdom’s reliance on oil, and similar grand plans for economic transformation have been announced but not carried out. | Many energy-reliant states have issued such proclamations in the past, particularly when prices were plunging, but carrying out the programs has always proved problematic at best. Saudi officials themselves, foreign analysts and economists were quick to note, have been speaking for decades about reducing the kingdom’s reliance on oil, and similar grand plans for economic transformation have been announced but not carried out. |
| They also note the huge mismatch between the needs of the Saudi job market and what the kingdom’s education system produces, both in skills and work ethic. | They also note the huge mismatch between the needs of the Saudi job market and what the kingdom’s education system produces, both in skills and work ethic. |
| “Broadly, the direction is right, but there are a lot of question marks about implementation and the size of what they are promising,” said Steffen Hertog, an associate professor of comparative politics at the London School of Economics who studies Saudi Arabia. | “Broadly, the direction is right, but there are a lot of question marks about implementation and the size of what they are promising,” said Steffen Hertog, an associate professor of comparative politics at the London School of Economics who studies Saudi Arabia. |
| Privatizing large sectors like health care and education would require lots of government oversight and regulation that may be too much for the kingdom’s bloated and often ineffective bureaucracy to handle, Mr. Hertog said. | Privatizing large sectors like health care and education would require lots of government oversight and regulation that may be too much for the kingdom’s bloated and often ineffective bureaucracy to handle, Mr. Hertog said. |
| And it remains unlikely that the measures Prince Mohammed has announced will raise enough revenue to replace what the government gets from oil, Mr. Hertog said. | And it remains unlikely that the measures Prince Mohammed has announced will raise enough revenue to replace what the government gets from oil, Mr. Hertog said. |
| “They have to try, but I think that by 2020 they won’t be able to do enough,” he said. “Even if they succeed in the long run, it will be a long and painful process.” | “They have to try, but I think that by 2020 they won’t be able to do enough,” he said. “Even if they succeed in the long run, it will be a long and painful process.” |
| John Sfakianakis, the Riyadh-based director of economics research at the Gulf Research Center, said the government faced a delicate balancing act of finding non-oil income without inhibiting the growth that the economy needs. | John Sfakianakis, the Riyadh-based director of economics research at the Gulf Research Center, said the government faced a delicate balancing act of finding non-oil income without inhibiting the growth that the economy needs. |
| The new fees and taxes the government has announced on undeveloped land, soft drinks and luxury items would bring in some revenue. And while lifting subsidies on water and electricity makes sense, it could raise operating costs for businesses while the government is trying to encourage private investment. | The new fees and taxes the government has announced on undeveloped land, soft drinks and luxury items would bring in some revenue. And while lifting subsidies on water and electricity makes sense, it could raise operating costs for businesses while the government is trying to encourage private investment. |
| “We know the goal, to rid the economy of oil,” Mr. Sfakianakis said. “If it can accomplish that, it would be among the few countries to do so in such a short period of time.” | “We know the goal, to rid the economy of oil,” Mr. Sfakianakis said. “If it can accomplish that, it would be among the few countries to do so in such a short period of time.” |
| The vision was approved by the Saudi government on Monday, and King Salman gave a televised statement praising it. But the initiative was clearly led by Prince Mohammed, who has emerged as the kingdom’s most dynamic official. | The vision was approved by the Saudi government on Monday, and King Salman gave a televised statement praising it. But the initiative was clearly led by Prince Mohammed, who has emerged as the kingdom’s most dynamic official. |
| Many Saudi citizens, and especially the 70 percent of the population that is under the age of 30, have celebrated the prince’s rise and took to social media to thank him for laying out an optimistic vision. | Many Saudi citizens, and especially the 70 percent of the population that is under the age of 30, have celebrated the prince’s rise and took to social media to thank him for laying out an optimistic vision. |
| While the plan’s focus was economic, it also addressed some social issues, such as calling for the development of historic and tourist sites, the issuance for the first time of green cards for expatriates, more athleticism among Saudi citizens and more women in the workplace. Despite rampant speculation on social media before its release, the plan did not call for Saudi women to be permitted to drive. | While the plan’s focus was economic, it also addressed some social issues, such as calling for the development of historic and tourist sites, the issuance for the first time of green cards for expatriates, more athleticism among Saudi citizens and more women in the workplace. Despite rampant speculation on social media before its release, the plan did not call for Saudi women to be permitted to drive. |
| Prince Mohammed’s vision for the future was clear in his interview with Al Arabiya, where he described the kingdom as a global economic and cultural leader. He said that a proposed bridge between Saudi Arabia and Egypt could be “the most important land crossing in the world.” He said Arab culture had produced the best “values and principles” of any world civilization, and he boasted that the Saudi sovereign wealth fund would be “an essential mover on planet Earth.” | Prince Mohammed’s vision for the future was clear in his interview with Al Arabiya, where he described the kingdom as a global economic and cultural leader. He said that a proposed bridge between Saudi Arabia and Egypt could be “the most important land crossing in the world.” He said Arab culture had produced the best “values and principles” of any world civilization, and he boasted that the Saudi sovereign wealth fund would be “an essential mover on planet Earth.” |
| “There will not be any investment or movement or growth in any region of the world without the voice of the Saudi sovereign wealth fund,” he said. | “There will not be any investment or movement or growth in any region of the world without the voice of the Saudi sovereign wealth fund,” he said. |
| Through such interviews with foreign news media and other appearances, Prince Mohammed’s public profile has surpassed that of the Saudi crown prince, Mohammed bin Nayef, who runs the Interior Ministry and has close links with American officials. | Through such interviews with foreign news media and other appearances, Prince Mohammed’s public profile has surpassed that of the Saudi crown prince, Mohammed bin Nayef, who runs the Interior Ministry and has close links with American officials. |
| While the nature of the relationship between the two men is known only to a tight circle within the royal family, it is clear that Prince Mohammed bin Salman derives his power from his father, who is 80 and has had health problems. | While the nature of the relationship between the two men is known only to a tight circle within the royal family, it is clear that Prince Mohammed bin Salman derives his power from his father, who is 80 and has had health problems. |
| But many Saudis and some foreign diplomats say privately that if King Salman dies soon, Prince Mohammed bin Nayef could remove the young prince and name his own successor. Ironically, the precedent for such a move was created by King Salman, who removed the crown prince named by his own predecessor, King Abdullah. | But many Saudis and some foreign diplomats say privately that if King Salman dies soon, Prince Mohammed bin Nayef could remove the young prince and name his own successor. Ironically, the precedent for such a move was created by King Salman, who removed the crown prince named by his own predecessor, King Abdullah. |
| Others have speculated that the young prince could seek to amass enough power to make himself indispensable while his father is still alive, or even try to have himself named as his father’s successor. | Others have speculated that the young prince could seek to amass enough power to make himself indispensable while his father is still alive, or even try to have himself named as his father’s successor. |