For far too long the Arab world has been accustomed to being told to “read between the lines” when it comes to policy statements from its leadership, leaving many more confused as to the difference between what is intended and what is reality. Not so for the young Saudi Deputy Crown Prince who gave an unscripted and confident interview with MBC to explain many difficult issues in a transparent manner, not shying from putting forward opinions that are against mainstream thinking. In doing so, he has set a high benchmark for others to follow and the public will not now easily accept the old opaque style of passing on messages of critical importance. While the Prince touched upon many political related aspects, such as the Kingdom’s relations with Iran and the war in Yemen, what has attracted worldwide and domestic attention were his comments and explanations on several critical economic issues facing the Kingdom which will shape both the future direction and the welfare of his nation for decades to come.
On Vision 2030 he said that that this will be implemented with specific programs in three stages: 2020, 2025, 2030 and new 10 point interim targets will be unveiled soon. His message was clear - requesting the Saudi population to judge results over many years, with progress and bumps along the way, and not to expect miracles from day one as a generational transformation and getting the bureaucratic and governmental administrative mind set to change takes time. He was not shy to say that, if the economic situation does not improve in the future, the Kingdom will reintroduce cuts in expenditures including public sector allowances, with yet another clear message that this is should no longer be taken for granted but depends on the economy’s performance. At the same time he showed he was in tune with the needs of the population in terms of their house ownership needs, as Saudi Arabia has one of the lowest home ownership ratios in the region, and unveiled an ambitious plan to build new homes using public and private partnerships.
Confident and sharp
On Aramco and its planned IPO, the message was clear – there is no going back on this strategy, to be completed in 2018, as it was central to the financial and economic diversification of the state, but that the matter will not be rushed, with a final offering of around the five per cent level which will be based on both the demand for the share floatation as well as viable domestic investment outlets from the proceeds, as the funds generated are to be given to the Public Investment Fund –PIF- to invest at home and abroad. He reaffirmed that the State would still have control over its oil resources, given some disquiet about the planned IPO, and Aramco would operate under a concession on production, with the latter being set by the government taking the State’s interest and international production commitments into account.
For far too long the Arab world has been accustomed to being told to “read between the lines” when it comes to policy statements from its leadership, leaving many more confused as to the difference between what is intended and what is reality. Not so for the young Saudi Deputy Crown PrinceDr. Mohamed Ramady
He specifically highlighted the new and important role that the PIF would have in kick starting domestic economic sectors, with the PIF expected to receive SR 500bn over the next 3 years from the Aramco IPO with which to spend at least half in Saudi Arabia and the rest abroad to generate higher returns than currently earned. He showed that he has a vision to put Saudi Arabia on the world map and compete in areas such as in logistics hub centres where the Kingdom’s contribution has been negligible. He reminded his viewers that despite a large trade flows through the Red Sea, Saudi Arabia has not managed to capture any of this trade logistic hub business sector to date.
He specified the difficulties, but also the opportunities in promoting a radical shake up of the health sector through the privatization of hospitals as well as requesting military suppliers to contribute toward local content and domestic manufacturing in this mega spend area in Saudi Arabia’s military expenditure outlay where less than two per cent is manufactured locally, while at the same time the Prince was realistic in his assessment of the various degrees of technology and in country manufacturing that can be done, given the sensitivity in passing on different grades of high technology secrets to third countries.
His message to the private sector was one which showed that the government was in earnest to become their partners as he talked about getting 100 Saudi companies to become both regional and international trading and manufacturing champions and that the government would support them, giving as an example Chancellor Merkel’s recent visit where she was accompanied by German firms and she supported their trading expansion and operational needs. His promise to root out corruption at ALL levels of officials went down well, as without this, as he pointed out, reforms would be meaningless.
In summary, it was a confident and sharp performance, supported by data and facts with a timeline of action, all delivered without tele- prompting and mumbling assistants at hand. Above all, he seemed to relish the opportunity to push back against those who felt he was weakened following the recent decisions to reverse some government cuts, and it was obvious from the large number of tweets received during the program that he was supported by many who saw a new refreshing face in transparent message delivery. It is now up to Saudi society to support his vision and reforms and bring these to reality. He has done his part and delivered a clear message.
Dr. Mohamed Ramady is an energy economist and geo political expert on the GCC and former Professor at King Fahd University of Petroleum and Minerals, Dhahran, Saudi Arabia.