Saudi Council of Economic and Development Affairs approved the executive plan for the "Privatization Program", a key plan of Vision 2030 that aims to raise efficiency of the national economy performance and ameliorate the services provided to reach as many as possible beneficiaries.
The Council convened on Tuesday under the chairmanship of Crown Prince Mohammed bin Salman, Vice President of the Council of Ministers and Minister of Defense.
The Program’s objective is to strengthen the role of the private sector by unlocking state-owned assets for investment and privatizing selected government services.
In addition, it will increase employment opportunities of national workforce, attract the latest technologies and innovations as well as support economic development by involving qualified enterprises in providing these services to increase private sector's contribution in GDP from 40 percent to 65 percent by 2030.
The Program also aims at capitalizing on the successful previous experiments, with the participation of the private sector, in the field of infrastructure and a broad spectrum of various service sectors such as energy, water, transportation, telecommunications, petrochemicals and finance.
It is based on three basic pillars beginning with laying the legal and regulatory foundations including developing regulations of privatization to benefit citizens and the private sector.
The program also aims to establish institutional basis that contributes to the existence of capable entities to implement privatization in the manner and mechanism that preserves the interests of the government and guarantees the fairness of the process for participants from the private sector. The third pillar is to steer privatization programs initiatives through executing the program's initiatives.
The privatization program is expected to strengthen the role of the private sector and it will also contribute to bringing direct foreign investments and improving payments balance.
It is noteworthy that strong economic indicators are expected to positively affect the private sector in Saudi Arabia during 2018. The latest and most influential indicator was Saudi's announcement a few months ago about the largest spending budget in the history of the country, which reached about $293.3 billion.
According to 2018 Saudi budget, the Kingdom has allocated $260.8 billion for spending, in addition to $22.1 billion to be invested and pumped through the Public Investment Fund and $13.3 billion will be dedicated to national funds in various sectors such as housing, industry, and mining.
Saudi Arabia's budget for fiscal year 2018 is very positive. The figures show a projected decline in the country's public deficit and increase in non-oil revenues reaching $77.6 billion, 37.1 per cent of total public revenues expected during 2018.
The impact of the budget is expected to include economic growth in general and the private sector in particular, as the budget has largely taken this into account.
