Middle Eastern largest economy is poised to enter an elite pool of nations like China, UK, Japan, etc by generating a whopping $10 billion revenue which is planned in line with its economic transformation vision plan 2020-2030. According to the words quoted in a report drafted by IMF (International Monetary Fund) and global law firm Hogan Lovells “Saudi Arab economic transformation plan will be switching in full gear to ultimately achieve its 2030 economic roadmap vision of raising as much as a whopping $200 billion revenue.”
- It also aims out to diversify and strengthen thus eventually to broaden the private sector including the countries arms and ammunition sector. This, in turn, will also support it to come out of the over-dependence on hydrocarbons, depleting oil-gas natural resources and diversify the emerging markets.
- This privatization project includes various sectors like railways, airports, power, mega infrastructure based real estate sectors, as well the transportation sector would also be hugely benefitted.
- As quoted by James Reeve, chief economist at Samba Financial Group, “Privatization module’s primary aim is to support foreign private investors to pool in their huge resources in the private-public partnerships that would be completely free from biasing thus being transparent in regulating the same.
- Saudi Arab is also keen to produce an en-mass job market of 12-15 thousand investing 35-40 billion Saudi Riyal (Dh34.27 bn) in the non-oil sector as revenue as a mass privatization module by 2020. Thus, this drive would support the largest middle eastern GDP contributor to unlocking financing and foreign participation.
- The PPP (Public-Private Participation) initiatives are also in full swing like the Aramco IPO-Saudi’s leading oil producer, transportation, facilities and service sector, leisure, entertainment, utilities, logistics sector, etc.
- According to a report based on by Japan’s biggest lender, Mitsubishi UFJ Financial Group “Saudi Arab privatization and expansion drive has helped the Arab world leading economy to seek a constant high rise in its foreign assets and reserves which also has touched an all-time high of one year in April-May 2018 and is constantly on the rise since then to touch up a figure of $13.3 billion and at present it rose to around $17.5 billion at the end of 2018.”
- The constant rise in foreign domestic reserves, as well as assets, attributes to a massive surge in current account surpluses due to the increase in oil price receipts, the trust of foreign investments and mass international fund borrowing.
- The Saudi Arab world is revamping its Visionary 2030 programme and has already concentrated hard on to cut down the fiscal deficits incurred within the last three years to touch an all-time low of $737 billion in 2015.
- The government of Saudi Arab has introduced many attractive schemes like a proposal, imposing new taxes, cutting excessive spending to slow down reserves, issuance of $11 billion international financial bonds, debentures instrument, beginning a new chapter to diversify and fund down the rising deficit by introducing a domestic Sukuk programme in 2018.
- It has also done quite well in the energy sector by investing many PPP initiatives like Sakaka PV, the largest Arab Kingdom’s first utility-scale solar powered project under the King Salman Renewable Energy Initiative closing well on the targeted financial plan in November, and with contribution from Saudi energy company ACWA Power.
According to word quoted by Saad Alrashed, a partner at Hogan Lovells in Riyadh, “Vision 2030 is devised to form a competent as well a vibrant body of the private sector that can also sustain outside the ground of its depleting hydrocarbon and oil-gas resources, thus leading to a complete economic changeover”.
Saudi Arab is already eyeing to view a drastic shift in all lead sectors during 2019-2020 as the heat of demand of PPP (Public-Private Participation), and privatization policy is already picking up very well. Thus Saudi Arab is ready to venture out in a new field and challenge its competitors like Japan, UK, China, etc to view a complete dynamic private as well profit based entities in leading sectors like Energy, Natural reserves, Oil-Gas, Transport, Utilities, Telecommunications, Service sector, Facilities, and Logistics, etc.