27 April 2016 Current Affairs: The Cabinet of Saudi Arabia kingdom on 25 April 2016 approved the Vision 2030, a broad-based economic reform plan. The Vision charts out the roadmap for diversifying the Saudi economy in next 14 years and to ensure that Saudi Arabia can live without oil by 2020.Vision 2030 envisages forming public investment fund, boosting affordable housing and giving expats long-term residence among others.Three pillars of Vision 2030
Elements of Vision 2030 :
- Saudi Arabia’s status as the heart of the Arab and Islamic worlds
- Determination to become a global investment powerhouse
- Transforming unique strategic location into a global hub connecting three continents, Asia, Europe and Africa
It is built around three themes: A vibrant society, a thriving economy and an ambitious nation.It envisions building a Public Investment Fund to become a major player in the global market.Shares worth less than 5 percent of Aramco, the national oil company of Saudi Arabia and valued at 2.5 trillion dollars, will be soldSome of the proceeds from Aramco will go towards Sovereign Wealth Fund worth 2 trillion dollars.The fund will surpass Norway’s 865 billion dollar fund as the world’s biggest and will potentially make Riyadh one of the single most important global investor.The fund will also include current Saudi fiscal assets of around 600 billion dollars as well as returns from real estate and industrial areas estimated to be worth 1 trillion dollars.A new visa system called “green card” system will be created to allow expatriate Muslims and Arabs to work long-term in Saudi Arabia and giving them more rights to invest in the country.Steps will be taken to diversify the economy, including investment in mineral mining and expanding military production.To increase participation of women in the workforce and to provide affordable housingWhy less reliance on Oil :
Since 70 percent of Saudi’s national income is composed of revenue from Oil. But with the fall in prices of oil from 100 dollars per barrel in 2014 to 40 dollars a barrel at present has increased the economic worries of Saudi Kingdom.As a result, the budget has been projected to see a shortfall of 87 billion dollars in 2016 leading to increasing of prices of retail fuel by 80 percent in December 2015 and cutting down of subsidies on electricity, water and other services.In 2015, due to fall in oil prices even the fiscal reserves dropped to a four-year low from 732 billion dollars to 611.9 billion dollars.