Senior source reveals Saudi Arabia's 2017 economic agenda: report

A senior official on the Saudi Council of Economic and Development Affairs, which is headed by deputy crown prince Mohammed bin Salman, has revealed details on the government’s diversification plans and economic agenda for 2017, according to Bloomberg. Here are the highlights of the statements given by the unnamed source.

Aramco IPO is in the country’s interest:

- Citizens will be given the priority for the initial public offering (IPO) by offering the shares on the Saudi Stock Exchange (Tadawul).

- Aramco will remain a Saudi company that contributes to the domestic product.

- Saudi Arabia will not give up its majority ownership of Aramco, and will not relinquish the control of it as the owner of largest proportion.

- All options in the IPO are there to maximize the economic benefits of the kingdom.

Impact of reforms on economic growth

The financial reforms are expected to cause some slowdown in economic growth. However, the state is working to cushion the slowdown through a number of procedures that will be taken in 2017. They include:

- Increasing government spending in 2017 in comparison to 2016.

- Increasing the paid capital of Saudi Industrial Development Fund from SAR 34 billion to SAR 59 billion during 2017 in order to finance the private sector to stimulate economic growth and sustainable economic diversity.

- Easing some of the regulatory restrictions (such as exporting) in order to give private companies a chance to enter larger markets.

- Establishing the National Center for Allocation to increase private sector contribution to the economy through the National Transformation Program and through state-owned enterprise’s privatization. In 2017, there will be privatizations of four opportunities for the private sector.

- Paying the delayed full dues in 2016 to the private sector.

Citizen’s Account Program

- Citizen’s Account Program, announced on Dec 22, aims to change the method of offering the government subsidies to ensure that they are directed to low and average income groups rather than being comprehensive support.

- Until now, more than 3 million Saudi families – 11 million male and female citizens – had registered in the program.

- This does not mean necessarily there will be no mistakes. Therefore, plans aimed at hedging against possible errors were developed.