Saudi Arabia is now looking to end its “dependence on oil” as oil prices have plunged and the nation looks for ways to modernize its economy.
A new plan, Vision 2030, says that the country will exist “without any dependence on oil” by 2020 and would soon be a “global player” on the world investment stage. It was announced on Monday by Deputy Crown Prince Mohammed bin Salman, who’s considered to be at the helm of Saudi Arabia’s plans to modernize its economy.
Oil prices plunging from $100 a barrel in 2014 to less than half that amount in 2015 have hit the kingdom’s pocketbook severely. Last year, the country ran a deficit of $98 billion, about 15 percent of its gross domestic product. There are widespread fears that Saudi Arabia may be facing financial disaster.
Saudi Arabia has been a leading OPEC nation and source of oil since large quantities of the fuel were discovered in 1938. Since then, the oil industry has dominated the country’s economy.
Vision 2030 hopes to attract sizable investments in the country through selling shares of state-owned oil giant Aramco in an initial public offering (IPO). Less than 5 percent of the shares will be sold, but if the company is valued at $2.5 trillion as Mohammed described it, it could be one of the largest IPOs in history. Earnings from this share sale would be used to help create a $2 trillion sovereign wealth fund that would be invested abroad.