Govt rejig part of new post-oil plan
RIYADH: Saudi Arabia’s King Salman announced a government overhaul that saw the kingdom’s top central banker and long-time oil minister replaced as part of sweeping economic changes led by his son to reduce the nation’s reliance on hydrocarbons.
The king appointed Ahmed Alkholifey to head the Saudi Arabian Monetary Agency, as the central bank is known, succeeding Fahad al-Mubarak, who had been in the role since 2011. Also out is Oil Minister Ali al-Naimi, the architect of the 2014 switch in Opec policy that’s since roiled crude markets, replaced by Saudi Aramco Chairman Khalid al-Falih.
Saudi Arabia is undergoing its biggest ever economic shakeup, led by 30-yearold Deputy Crown Prince Mohammed bin Salman, second in line to the throne, as it prepares for the post-oil era following the plunge in crude prices that started in 2014. The kingdom’s energy industry, as well as its central bank, will play a “critical role in the economic transformation” plans, said Simon Kitchen, head of macrostrategy at Cairo-based investment bank EFG-Hermes.
“The deputy crown prince has now put his stamp on both institutions,” he said.
As part of Saturday’s royal decrees, the name of the oil ministry becomes the Ministry of Energy, Industry and Mineral Resources and will undertake tasks and responsibilities related to electricity.
Prince Mohammed’s plans, outlined in the so-called “Vision 2030” blueprint announced on April 25, include setting up the world’s biggest sovereign wealth fund, transforming Aramco into an energy and industrial conglomerate and generating an additional US$100 billion (3.5 trillion baht) in non-oil revenue by 2020
One of the government’s biggest challenges, though, will be navigating the worst economic slowdown since the global financial crisis as authorities cut spending to plug a budget deficit that reached about 15% of gross domestic product in 2015.
The king’s government reorganisation on Saturday is the third major change since he took power in January 2015. The previous two reshuffles helped propel a younger generation of the Al Saud ruling family, mainly his son Prince Mohammed, closer to the throne.