Saudi Vision 2030: Expat 'green card' to be introduced

Saudi Vision 2030: Expat green card to be introduced
King Salman delivers a brief statement as Saudi Arabia's cabinet agrees to implement a broad reform plan known as Vision 2030 in Riyadh, April 25, 2016.

Riyadh - The plan focuses on privatisations, further reductions in subsidies, the sale of part of Aramco and the creation of a giant $2 trillion Sovereign Wealth Fund

By Agencies

Published: Tue 26 Apr 2016, 3:20 PM

Last updated: Wed 27 Apr 2016, 8:28 AM

Saudi Arabia's Cabinet on Monday approved a plan laying out reform priorities for the next decade and a half, setting in motion what could be a period of significant economic change in the Kingdom.
Custodian of the Two Holy Mosques, King Salman bin Abdulaziz Al Saud of Saudi Arabia, announced the approval for the "Vision 2030" plan in a short televised announcement on Monday in which he called on Saudis to work together to ensure its success. 
Deputy Crown Prince Mohammed bin Salman spelled out some details of the programme in a pre-recorded interview aired shortly after the announcement on Al Arabiya. 
That committee, the Council on Economic and Development Affairs, has been focused on reorienting the Opec powerhouse away from its heavy reliance on fossil fuels, creating jobs and boosting foreign investment. 
In the wide-ranging interview, Mohammed bin Salman said a planned partial initial public offering of the state-owned oil company Saudi Aramco was part of the reform programme. He described the country as having become addicted to oil, and said that less than 5 per cent of Aramco would be offered to public shareholders. 
"The vision is a road map of our development and economic goals," he said. "A part of that is related to Aramco and this is a very small aspect," he said. 
Prince Mohammed bin Salman discussed plans to set up a $2 trillion sovereign wealth fund that would be managed by a board of directors, and not Aramco. The fund's revenues would go into developing the Kingdom's cities, he said. 
He said the economic goals of the reforms are intended to eliminate housing and unemployment problems and ensure that water and energy subsidies go to those most in need. 
Another way to drive up non-oil revenue, the prince said, is by investing more in mineral mining and boosting the Kingdom's own military production capacity. Saudi Arabia was the world's third largest arms buyer last year, with purchases of more than $87 billion.
The Prince also said the Kingdom, which annually welcomes millions of Muslim pilgrims to the holy cities of Makkah and Madina, would become more welcoming to other types of tourists - in line with Saudi Arabia's values. A new residency visa programme could generate additional revenue and would allow Muslims and Arabs to live for extended periods in the country, he said.

Saudi Vision 2030 - HIGHLIGHTS
Saudi plans a military industries holding firm
Saudi Arabia plans to set up a holding company for military industries that would be fully owned by the government at first and listed later on the Saudi bourse.
"We are now about to establish a holding company for the military industries 100 per cent owned by the government that will be listed later in the Saudi market," Prince Mohammed said.
"We expect it to be launched by end of 2017 with more details."
Saudi Arabia to introduce expat 'green card' within five years 
Saudi Arabia will introduce a "green card" system within five years to allow resident expatriates in the Kingdom to have more rights in order to improve its investment climate.
Prince Mohammed bin Salman said planned sweeping reforms, of which the proposed green card is one, will be implemented even if oil prices rise back above $70 a barrel and pledged to end Riyadh's dependence on crude revenue by 2020.
Saudi reforms will not require major spending
Saudi Arabia's new "Vision 2030" reform plan will not require major spending but will involve restructuring, Prince Mohammed said in a television interview, adding that spending on infrastructure projects would continue.
Prince Mohammed added that the government would restructure the Housing Ministry to help more citizens buy homes, said subsidies should not go to the rich, and said he aimed to reduce unemployment among Saudi nationals to 7 per cent from 11.6 per cent.
Saudi stock market rises
Saudi Arabia's stock market recovered from early losses and rose in late trade on Monday as Prince Mohammed outlined a sweeping economic reform plan.
Measures include building up the government's Public Investment Fund to become a major player in global markets, restructuring the housing ministry to increase supply of affordable housing.
Saudi to sell less than 5% of Aramco, create $2 trillion fund
Saudi Arabia will sell shares in state oil giant Aramco and set up the world's largest wealth fund under a long-term economic reform plan.
"We plan to sell less than five percent of Aramco. Aramco's size is very big. It is estimated at between $2 trillion and $2.5 trillion," Prince Mohammed said.
"We plan to set up a $2 trillion sovereign wealth fund... part of its assets will come from the sale of a small part of Aramco," he added.

Analyst's view
Mohieddine Kronfol, chief investment officer for global sukuk and Middle East fixed income at Franklin Templeton Investments
The Saudi 2030 vision will probably be viewed positively by market participants.
Plans for improved governance, transparency, structural reform, and evolving social contracts should underpin the outlook for many industries.
The ambition is evident and the government appears confident in embracing technology and cultural development in the execution of its plans. Implementation and the impact on government finances will likely continue to be closely monitored.
Mohammad Al Shammasi, head of asset management at Riyadh-based Derayah Financial
Initial reaction, I appreciated the transparency and addressing issues that have previously not been addressed, such as military spending, the housing issue and unemployment...I believe this vision has a lot to offer and I am optimistic, but the biggest challenge will be the execution.
The markets did react positively as the interview was taking place, but the efficacy of this reaction may be short-lived.
Ahmed Al Jundi, executive at Jeddah-based architectural firm Diyar Consultants
The proactive approach to try and reduce the corruption and inefficiencies that led to mispricing, and cost the government billions of riyals, is a huge step forward in the right direction...
As a Saudi I am optimistic, as a businessman I am encouraged, but we have to see how the government plans on pushing through with those plans in a way that is mutually beneficial to the private sector, so that we can continue absorbing more employees from the public sector.
- Reuters

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