World Economy

Saudi Arabia unveils 15-year plan to transform its economy

Saudi Arabia unveils 'Saudi Vision 2030'
Saudi Arabia unveils 'Saudi Vision 2030'
Saudi Arabia post-oil plans
Saudi Arabia post-oil plans
Saudi cabinet approves post-oil econ plan
Saudi cabinet approves post-oil econ plan

Saudi Arabia's government has unveiled a long-term economic blueprint for life in a low-oil-price world.

Titled "Saudi Vision 2030," the plan unveiled Monday includes regulatory, budget and policy changes that will be implemented over the next 15 years in the hope of making the kingdom less reliant on crude. It aims to build a "prosperous and sustainable economic future" for the kingdom, according to the press release.

'Vibrant society, a thriving economy'

Saudi King Salman bin Abdulaziz
Faisal Al Nasser | Reuters

Launching the program, the country's leadership said it would be built around three themes for a "vibrant society", "a thriving economy" and an "ambitious nation." The plan highlighted the country would raise its share of non-oil exports in non-oil gross domestic product (GDP) from 16 percent to 50 percent.

In a wide-ranging press conference in the capital Riyadh, Deputy Crown Prince Mohammed bin Salman addressed the different aspects of the announcement. The plan details the future of privatization in Saudi Arabia and the creation of what it calls the "largest sovereign wealth fund in the world." Prince Mohammed told CNBC that a new sovereign wealth fund could top $3 trillion and would be linked to its vast revenues from oil.

The planned economic diversification also involved localizing renewable energy and industrial equipment sectors and creating high-quality tourism attractions. It also plans to make it easier to apply for visas and hoped to create 90,000 job opportunities in its mining sector.

Selling stake in Aramco

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US President Barack Obama with King of Saudi Arabia Salman bin Abdulaziz al-Saud (3rd R), King of Bahrain Hamad bin Isa al-Khalifa (2nd R) and Abu Dhabi Crown Prince Mohammed bin Zayed al-Nahyan (R) during the US-Gulf Cooperation Council Summit in Riyadh, April 21, 2016.
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"We will smooth the process of listing private Saudi companies and state-owned enterprises, including Aramco. This will require deepening liquidity in our capital markets, fortifying the role of the debt market and paving the way for the derivatives market," the announcement said.

The reforms also included announcements in digital infrastructure, culture, education and the military. Prince Mohammed told reporters Monday that Saudi Arabia could achieve its vision with oil at just $30 a barrel.

"We can achieve this vision even if oil is lower than $30. We think it is almost impossible to go under $30 because of global demand," Prince Mohammed said in the news conference, according to Reuters. "The plan can deal with any price, $30, $28, $70... but the plan was made with $30 in mind."

The announcement comes hours after Saudi Arabia confirmed that it planned to sell a stake of its state oil giant Saudi Aramco which was expected to be valued at more than $2 trillion.

The sale would be less than 5 percent of the company and would be via an initial public offering (IPO), Deputy Crown Prince Mohammed bin Salman said in a television interview with the Al Arabiya News Channel.

He also said there were plans for Aramco, or to give it its full name Arabian American Oil Company, to be transformed into a holding company with an elected board, according to Reuters, with subsidiaries of the firm also to be sold by IPO.

'Increase women's participation'

There were also details of how the ultra-conservative Muslim kingdom would increase women's participation in the workforce from 22 percent to 30 percent. It also said it would lower the rate of unemployment from 11.6 percent to 7 percent.

"With over 50 percent of our university graduates being female, we will continue to develop their talents, invest in their productive capabilities and enable them to strengthen their future and contribute to the development of our society and economy," the press release stated.

—CNBC's Nyshka Chandran contributed to this article.