by Patrick Schena
The April approval of the National Transformation Programme (Vision 2030) aims to reduce Saudi Arabia’s dependence on oil. It will see the Public Investment Fund – the sovereign fund dubbed the Saudi ‘megafund‘ – take its place among the hierarchy of the kingdom’s ambitious development targets.
These include almost tripling non-oil revenues by 2020, reducing public sector wages and subsidies, expanding the use of public debt, and aggressively restructuring and diversifying the national economy.
The PIF is expected to expand to $1.87tn from an estimated $160bn currently (and $94bn based on official figures last year) as a result of transfers of government assets, including state-owned oil company Saudi Aramco, in effect making it one of the world’s largest institutional investors.
This is a bold undertaking. But it also raises the question of whether prioritising the PIF’s expansion will ultimately be in the best interests of Saudi Arabia’s economic transformation.