Saudi Arabia looks forward to attracting $55 billion over the next four years through boosting its privatization program, which seeks to increase the role of the kingdom's private sector in providing services with access to state-owned assets, The Financial Times reported on Monday, citing Finance Minister Mohammed Al-Jadaan
MOSCOW (Pakistan Point News / Sputnik - 24th May, 2021) Saudi Arabia looks forward to attracting $55 billion over the next four years through boosting its privatization program, which seeks to increase the role of the kingdom's private sector in providing services with access to state-owned assets, The Financial Times reported on Monday, citing Finance Minister Mohammed Al-Jadaan.
The privatization program was launched back in 2018 as part of the Saudi Vision 2030 economic overhaul program, with the aim of detecting assets and services in a number of sectors that can be privatized as well as establishing a framework for the country's public-private partnership to increase the efficiency of public services, according to the program's official website.
As of today, Riyadh has drawn up a list of 160 projects across 16 sectors, including asset sales and public-private partnerships, through to 2025, Al-Jadaan told the newspaper. Along with that, Riyadh seeks to devolve the management and financing of the state's medical infrastructure and health care to the private sector, including transportation networks, school buildings, airport services and water desalination.
Asset sales, among other things, will involve tv broadcasting towers, government-run hotels and desalination plants, FT reported.
"It's not a choice any more, but a requirement by the central government that these services or these utilities will no longer be run by the government," Al-Jadaan told FT, adding that this approach was taking the privatization to the next stage.
The minister expressed hope to gain $38 billion through asset sales and almost $17 billion through public-private partnerships. According to the news outlet, Al-Jadaan set the target to narrow Saudi Arabia's budget deficit to 4.9% of GDP this year as the kingdom is trying to recover from a double shot of trouble, including the ongoing coronavirus pandemic and a sharp fall in oil prices.
Additionally, the minister noted that funds raised via any future sales of shares of the country's energy giant, Saudi Aramco, would go to the Public Investment Fund (PIF), one of key development engines for the national economy. In late April, Saudi Crown Prince Mohammed bin Salman said that Aramco was in talks to sell 1% of the company's shares to one of the world's leading energy companies, with the deal expected to be done within the next two years.
"When it comes to Aramco's shares, we will monetise them, recycle them and create more activity in the economy by unlocking new sectors through the PIF," Al-Jadaan said.
Saudi Arabia's so-called private sector participation law, also known as the PSP Law, is expected to enter into force in late July 2021.
