Saudi Arabia’s young crown prince makes an ‘oil free’ economy plan

Saudi Arabia has unveiled a revolutionary plan to make the oil kingdom free from oil dependence in just four years. The most orthodox country in the Middle East has brought out the new plan called Saudi Vision 2030 which needs tremendous adjustment from the present pattern.  The plan is the work of Mohammed bin Salman, 30-year-old son of King Salman. The deputy crown prince who has taken control of economic and oil strategy of the Kingdom.

The crown prince has launched the plan for transition by accepting that Saudi Arabia is ‘addicted to oil.’ Revealing the urgency and perhaps making the targets unrealistic, he declared that the wish is to live without oil by 2020.

The world’s largest crude producer for many decades and crude revenue contributing to 80 per cent of government’s revenue, Saudi Arabia badly need a different development model in the prospect of oil’s demise. Short term oversupply and long term aversion to fossil fuel all indicate that oil’s rule is over.

The plan includes phasing out of huge subsidies that were finance out of oil revenues in the future. Moving towards market pricing of previously subsidized items like fuel and electricity, water and transport shows the painful part of the plan for the public. As per the plan, the impact on lower-income families will be cushioned by direct cash transfers.

Another attractive part of the plans is to sell five per cent stake in Saudi Aramco and to use this fund to form a sovereign wealth fund. Gradually, return from this investment will replace oil revenues.

But a seemingly interesting proposal is to introduce a green card for Arab foreigners and other Muslims so that the skilled people can stay in Saudi Arabia. Educational reforms will be made to make Saudis skilled people.

The plan need support from Wahabi religious sects that culturally control the country though the Saudi family has legitimacy as rulers.