Saudi Arabia boosts economic reforms
Council of Economic and Development Affairs revises National Transformation Program
The Kingdom is revising the National Transformation Program (NTP) — its road map for reforming the economy, according to a statement from the Ministry of Culture and Information released on Saturday.
The Council of Economic and Development Affairs is revising the NTP to boost efficiency and make sure reforms are implemented efficiently.
The Vision 2030 reform program was launched by Crown Prince Mohammed bin Salman last year to reduce the economy’s dependence on oil and bring state finances under control.
“It is important to adjust and adapt to unexpected situations, and to use new circumstances in ways that reinforce and strengthen underlying strategic objectives,” said the statement.
“Such flexibility should not undermine the stability and predictability needed to allow the private sector to plan its new investments and expansions.”
The statement highlighted some of the early successes of the program including the reduction of the budget deficit, energy price reforms and the allocation of SR200 billion ($53.29 billion) to support strategic private sector bodies.
It also cited billions of riyals that have been earmarked for utilities infrastructure projects and said that the government had speeded payments to contractors.
It added: “It should not therefore be a surprise to participants and observers of Vision 2030 that the government is now planning to further strengthen and build on the ways it delivers the vision targets. Indeed, over the coming years there will be further periodic adjustments and improvements to the vision’s implementation programs.”
It means that leading ministries will have the power to adjust existing initiatives or add new ones.
Saudi Arabia’s revised national transformation program comes as a wide-ranging privatization program gains traction — including the planned initial public offering (IPO) of a stake in Saudi Aramco, the national oil company.
“The IPO process is well underway and Saudi Aramco remains focused on ensuring that all IPO-related requirements are completed on time and to the very highest standards,” the statement added.
The International Monetary Fund in July welcomed the economic reforms introduced by the government including the planned rollout of VAT and better banking regulation.
“The history of economic reform shows that adjustments are required throughout the years. Corrective measures have to be taken as unintended consequences have to be addressed,” said John Sfakianakis, director of economic research at the Gulf Research Center in Riyadh.
“Also, new projects and ideas have to be included due to local and international conditioning. It’s a necessary step in order to get the economic reform project at a higher and more effective mode.”
LONDON: The government of Saudi Arabia is stepping up its ambitious economic reform plan as it gives some ministries more control over implementation.