Saudi Arabia’s National Transformation Plan (NTP), which outlines the key elements to shift the kingdom’s economy away from its dependence on oil, was approved by the Saudi cabinet, in a broad bid to shape the Kingdom’s economy, The Wall Street Journal informed.
The NTP is the centerpiece of the Vision 2030 reforms set out earlier this year by Saudi deputy crown prince Mohammed bin Salman. The focus has been on the steps to partly privatize the state oil company, Aramco, which dominates the Saudi economy, by selling under 5% of the firm. This will help diversify sovereign wealth fund.
Minister of Energy, Industry and Mineral Resources, Khaled al-Falih, said that under the program, Saudi Arabia will be “a very strong competitor in renewable energy,” and will implement “massive” projects to produce more natural gas, while increasing non-oil exports. Meanwhile, Saudi oil production capacity would remain unchanged at 12.5mb/d in the projected period.
According to The Daily Mail, the NTP 2020 aims to generate 450,000 non-government jobs, to cut the share of public wages in the budget to 40% over the next five years, and to boost the contribution of the private sector.
Additionally, the ministry plans to build an international complex for marine industries that will provide 80,000 jobs and cut imports by $12b annually.
Two years of low oil prices have strained the kingdom’s finances, resulting in a record budget deficit of about $98b in 2015.