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| Saudi Arabia Moving to Reduce Dependence on Oil Money | Saudi Arabia Moving to Reduce Dependence on Oil Money |
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| RIYADH, Saudi Arabia — A top Saudi prince has announced new elements of a plan to reduce the kingdom’s heavy dependence on oil, amid a drop in world prices that has sent shock waves through the Saudi economy. | RIYADH, Saudi Arabia — A top Saudi prince has announced new elements of a plan to reduce the kingdom’s heavy dependence on oil, amid a drop in world prices that has sent shock waves through the Saudi economy. |
| The plans include publicly selling shares of the state oil giant, Saudi Aramco, and routing much of its worth into a public investment fund, said the prince, Mohammed bin Salman, in an interview with Bloomberg published Friday. | The plans include publicly selling shares of the state oil giant, Saudi Aramco, and routing much of its worth into a public investment fund, said the prince, Mohammed bin Salman, in an interview with Bloomberg published Friday. |
| The fund could become the world’s largest, he said, with more than $2 trillion in assets. | The fund could become the world’s largest, he said, with more than $2 trillion in assets. |
| “Undoubtedly, it will be the largest fund on Earth,” said Prince Mohammed, who is second in line to the Saudi throne and has emerged as the country’s most powerful and dynamic official. “This will happen as soon as Aramco goes public.” | “Undoubtedly, it will be the largest fund on Earth,” said Prince Mohammed, who is second in line to the Saudi throne and has emerged as the country’s most powerful and dynamic official. “This will happen as soon as Aramco goes public.” |
| The announcements came as Saudi Arabia, the world’s largest oil exporter, struggles to reformat its economy. | The announcements came as Saudi Arabia, the world’s largest oil exporter, struggles to reformat its economy. |
| A decade-long boom left the kingdom’s economy heavily dependent on oil, which provides most of the government’s income, and made the state far and away the country’s biggest employer. The drop in oil prices — to about $39 a barrel from more than $100 a barrel in June 2014 — undermined that model, leading to huge budget deficits and vast cuts in public spending. | A decade-long boom left the kingdom’s economy heavily dependent on oil, which provides most of the government’s income, and made the state far and away the country’s biggest employer. The drop in oil prices — to about $39 a barrel from more than $100 a barrel in June 2014 — undermined that model, leading to huge budget deficits and vast cuts in public spending. |
| Prince Mohammed, a son of the Saudi monarch, King Salman, is leading the effort to find solutions as the head of council that oversees economic policy. He is also the country’s defense minister, at a time of great instability in the Middle East and with Saudi forces at war in neighboring Yemen. | Prince Mohammed, a son of the Saudi monarch, King Salman, is leading the effort to find solutions as the head of council that oversees economic policy. He is also the country’s defense minister, at a time of great instability in the Middle East and with Saudi forces at war in neighboring Yemen. |
| The full plan to restructure the economy has yet to be released, but Friday’s announcements touched on key aspects of it. | The full plan to restructure the economy has yet to be released, but Friday’s announcements touched on key aspects of it. |
| Shares of the parent company of Saudi Aramco, widely believed to be the world’s most valuable company, as well as shares of its subsidiaries, could be sold to the public on the Saudi stock exchange as early as next year, Prince Mohammed said. But the shares would be for “less than five percent” of the company, he said. | Shares of the parent company of Saudi Aramco, widely believed to be the world’s most valuable company, as well as shares of its subsidiaries, could be sold to the public on the Saudi stock exchange as early as next year, Prince Mohammed said. But the shares would be for “less than five percent” of the company, he said. |
| Assets raised from the stock sales would be routed into the Public Investment Fund, which could grow to hold more than $2 trillion, the prince said. The fund currently has $5 billion in assets and includes shares in a large Saudi chemical manufacturer and the kingdom’s largest lender. | |
| The fund is currently considering foreign opportunities and will seek a variety of investments to move the kingdom away from its dependence on oil. “So within 20 years, we will be an economy or state that doesn’t depend mainly on oil,” the prince said. | The fund is currently considering foreign opportunities and will seek a variety of investments to move the kingdom away from its dependence on oil. “So within 20 years, we will be an economy or state that doesn’t depend mainly on oil,” the prince said. |
| Western diplomats and analysts say it is hard to gauge the Saudi plans because much about the kingdom’s economy remains opaque and the deadlines for implementation remain unclear. | Western diplomats and analysts say it is hard to gauge the Saudi plans because much about the kingdom’s economy remains opaque and the deadlines for implementation remain unclear. |
| Some have questioned how many private investors will be interested in putting their money in a company like Saudi Aramco that releases very little financial information and is seen by many as the personal piggy bank of the Saudi royal family. | Some have questioned how many private investors will be interested in putting their money in a company like Saudi Aramco that releases very little financial information and is seen by many as the personal piggy bank of the Saudi royal family. |