Saudi Arabia is giving up oil. The royal family has decided the country must stop living off sales of hydrocarbons alone. They are now betting on small businesses, investments, and innovations.The Deputy Head of the Department for Strategic Studies in the Energy of the Analytical Center Irina Pominova noted in an interview with a Kompaniya journalist that Persian gulf countries had been trying to get off their oil dependency for dozens of years now. Nevertheless, despite the steps that have already been implemented, such as the liberalization of trade, development of the financial system and improvements made to the business climate, the goal still remains elusive, the expert believes.
Persian Gulf countries cannot get rid of their Dutch disease just yet
“Long-term economic planning is not exactly an innovation either. Thus in 2009 Saudi Arabia adopted the Vision 2025 plan. Its goal was to increase the prosperity of the country while remaining loyal to its cultural traditions,” Ms. Pominova said. Vision 2030 is different in that it lies in a different political 'plane'. The program was put forward by Prince Muhammad Ibn Salman who represents the younger generation of the Royal family. The success of the new plan hinges on who has real political clout, the expert is sure.
Ms. Pominova also notes that the rtools for economic prosperity found in Vision 2030 are pretty standard and well known. They include attracting investments, creating more opportunities for small and medium-sized businesses, promoting innovative industries. These tools are well known in Russia as well, according to the expert.
It should be reminded that the first step that Saudi Arabia took towards prosperity involved partial privatization of Saudi Aramco. The Saudis are convinced that once the company is floated it will become the most expensive publicly traded corporation in the world. But experts believe the Saudi leadership have given in for quite a bit of wishful thinking in that regard.