HRH Crown Prince Reviews Achievements of the Kingdom's Vision 2030 Over the Past Five Years
Saudi Press Agency
Wednesday 1442/9/16 - 2021/04/28
Riyadh, April 28, 2021, SPA -- His Royal Highness Prince Mohammed bin Salman bin Abdulaziz Al Saud, Crown Prince, Deputy Prime Minister and Chairman of the Council of Economic and Development Affairs, discussed the most important achievements of the Kingdom Vision 2030 programs and projects over the past five years, in an interview transmitting on the state's television and the most important Arab television channels.
HRH Crown Prince affirmed that oil greatly served the Kingdom of Saudi Arabia, pointing out that the Kingdom has been a country established before the oil.
HRH Crown Prince disclosed that the volume of income and growth achieved by oil is much greater than our needs at that time, particularly in the thirties and forties, adding that the volume of the surplus of income and economic growth was much more than we were aspiring for by hundreds of times.
HRH Crown Prince said that "there was an impression that oil would cover all the Kingdom's needs. Of course, at that time (the thirties and forties), the population of the Kingdom was less than three million. It might be much less. Riyadh's population, at that time, was 150,000 people."
He added, as time went by, that "the volume of production increased very slightly, but the size of the population growth increased enormously from one million, two million, and three million to twenty million Saudi citizens. So, oil covered the needs and the manner of living that we have been accustomed to since the sixties and seventies.
He added that "if we were to proceed, in the same manner, with the growth of the population, this will affect, after twenty years or ten years, the quality of life that we have been accustomed for fifty years."
HRH Crown Prince affirmed the Kingdom's desire to maintain the same level of quality of life and even better, as time goes by, with the aim of keeping growth, in addition to the risk that the Kingdom's economy would be depending mainly on oil, as well as what will oil be facing as challenges in the next forty or fifty years and its limited utilization, or the prices will be less in the distant perspective.
His Royal Highness Prince Mohammed bin Salman indicated that there might be a dysfunction in the economic situation in the Kingdom as well as economic and financial repercussions, at the individual and national level, that may have dire consequences. Meanwhile, he added that "there are many opportunities in the Kingdom in various sectors other than the oil sector, including mining, tourism, logistics and investment. There are huge opportunities. There is still a very strong desire and motivation that we aspire to benefit from as Saudis for our beloved country. I believe that these are two main drivers for the Vision 2030 in order to eliminate the challenges that face us as well as to exploit the untapped opportunities that may constitute 90% of the situation today. We will continue to grow and prosper in order to compete on all fronts.
Regarding the most important achievements that have been accomplished in the past five years since the launch of the vision, HRH Crown Prince pointed out that the achievements are many, but we had a twenty-year-old housing problem that we could not solve. Citizens were waiting to get a housing loan or support for nearly 15 years and the level of the housing ratio did not rise between 40 to 50%. Before the vision, the ratio was 47%. During the reign of the late King Abdullah, SAR 250 billion were allocated in 2011 and in 2015, for this issue, only two billion were disbursed and were not used. The Ministry of Housing has not been able to transfer these sums into projects on the ground, mainly because the state's position was weak, and ministries were divided. The Minister of Housing cannot tackle this issue without a general policy for the state in coordination with municipalities, the central bank, Finance Ministry, enacting legislation, and the private sector. For example, the 250 billion were returned to the treasury and an annual budget was disbursed. This resulted in increasing the housing ratio from 47% to 60% in four years only, and this gives you an indication of where we are headed.
HRH Crown Prince said that economic growth in the non-oil sector was at an unambitious rate for the Kingdom of Saudi Arabia. In the fourth quarter of 2019, the non-oil economy grew by 4.5%, even if the pandemic was not in 2020 and continued until it reached 5% in the non-oil sector. We will return in this year and next year to reach the highest levels in the future. Unemployment also during the vision was 14% in the first quarter of 2020, we reached 11%. With the pandemic, unemployment rate increased, and we were the sixth best country in the G20 in terms of unemployment rates, and we saw in the announcement that in the fourth quarter of 2020, we are back to 12% and we will break the 11% barrier this year, down to 7%.
HRH Crown Prince confirmed that non-oil revenues increased from 166 billion to 350 billion Saudi riyals. Commercial register, for example, used to take days to be issue through six government agencies. Now with e-government it can be issued in half an hour. Foreign investments have doubled three times or more than five billion riyals annually to 17 billion riyals. Saudi stock market has been stuck from the last crisis between 4,000 to 7,000 points, and now it has exceeded 10,000 points. This indicates that the private sector has started to grow, so many numbers have been achieved in the past four years.
On a question about the vision being one of the largest transformative projects in the world, and whether we are moving faster than we should be, HRH Crown Prince explained that there is no such thing as "faster than we should", if you have an opportunity that is achievable and I do not achieve it only under the pretext of speed, this means that I am laggard and I do not want to I work. so, we will work on every opportunity, whether they are ten opportunities or a hundred opportunities or a thousand opportunities or ten thousand opportunities and will develop our human capabilities and develop the government's capabilities to achieve these opportunities as quickly as possible, and when we achieve all of them, we will open new horizons.
Regarding the guarantees to implement the vision and its ambitious targets, he said that we are about to break the vision's targeted figures compared to those before the vision. For instance, the vision forecast for housing was 62% but we did reach 60% by 2020 and we are going to hit the 62% by 2025, adding that this means that the vision's goal has jumped from 62% to 70% in terms of the number of population who own houses.
HRH Crown Prince Crown Prince pointed out that the Public Investments Fund has projected to have a size worth SR7 trillion by 2030 but, according to today's statistics, it will be SR4 trillion in 2025. Accordingly, we are going to amend the target to become SR10 million by 2030, the Crown Prince said, adding that all the numbers thought to be large and unachievable were broken by the year 2020 with most of the remaining goals will follow, meaning that we are going to make greater breakthroughs by 2030.
The return to enforce the State's center was the greatest challenge facing us in 2015 when King Salman assumed office, HRH Crown Prince said, adding that although there are ministries, institutions and statute for governance, which is set to show the impact of authorities and their roles, you would find, when it comes to the executive apparatus, that they are lacking the link with the center of the State. For instance, we noted that the central government was not assigned to put the strategies, policies and public budget. Instead, the budget was prepared by competent ministries separately.
Following our talk on the issue of housing, let us say that we have SR250 billion appropriated for housing but actually we cannot use it as we lack empty lands for building, he said, citing problems with the policies of municipalities, particularly that they are not compatible with the policies of housing as there is need to create a system relating to real estate mortgage, borrowing, banking loans and central bank's legislations to make this matter applicable. Therefore, without a strong government center that puts policies and strategies matching with all government authorities, particularly giving each ministry its a prescribed applicable role, you will gain nothing, the Crown Prince stated.
Citing the housing example, the Crown Prince said that, following enforcing the role of the central government and cutting 70% of this march and translating it to reality, we were able to achieve 60% of the rate of housing.
In this regard, he recalled that the year 2015 was very tough, as 80% of the ministers were not skilled and don't deserve to be appointed as officers in a tiny company affiliating to the Public Investment Fund. Moreover, the ministries were semi-lacking efficient senior officials, including deputies, undersecretaries and team leaders, HRH Crown Prince went on to say. He added that ''to a great extent, the second top line of officers are just managing day-to-day routine affairs and measures which are not based on strategic or planning works to achieve any of the future targets or objectives'. At that time, there was no real royal court, cabinet or decision-makers, he said, adding that before you achieve anything, you need to create a team that builds the machine which helps you turn opportunities and aspirations of the Saudi people into realities.
HRH Crown Prince added that the year 2015 was a very difficult year to implement a small part at that time of restructuring the government to establish the Council for Economic, Development, Political and Security Affairs by restructuring some sectors and some ministries, appointing new ministers and appointing deputy ministers and undersecretaries. I mean, for example, I remember one of the most important things that we did at the end of 2015 that In each ministry we classified the 20 most important leaders and began to classify those in the green, yellow, or red range, of these leaders, 90% in the red and yellow range and only 10% in the green range. How do we work and change all these cadres to turn 70% into a green zone in order to achieve what we need, and it does not mean establishing a political security council or establishing an economic and development council that the issue has ended and thus the restructuring has been done. You need institutional work within the country. So we started to establish a strategy office for the Council of Economic and Development Affairs in the Strategy Committee under my chairmanship under the Council of Economic Affairs to translate the vision and set strategies for each housing, energy, industry, quality of life and other strategies and programs that were established in the vision. We worked to establish a state's budget work office so that the Ministry of Finance has the treasury to spend as usual. And a financial committee has been established headed by the Ministry of Finance, which meets every two weeks once to align the strategy, and now we are about to finish the policy office at the state's center.
HRH Crown Prince added, "When the vision sets goals and this thing that we can achieve, these opportunities and capabilities that we have, whether human, natural, economic and financial resources in the Kingdom of Saudi Arabia translate these strategies and may cost in a budget year 2 trillion riyals going to the financial office of the Finance Committee, and the financial office works and says my ability to preserve the state's finances is that I spend from 800 to one trillion Saudi riyals back to the Strategy Office and set the priority of strategies and postpone some of them and reduce the costs of some until we reach the appropriate financial alignment for the coming years and then translate into policies. Policies today are translated through committees, but in the future through a specialized office that will be established at the end of this year and turned into orders for ministries to implement the strategy prepared with a role and a clear target for each ministry to coordinate and distribute tasks to all ministries to achieve each desired goal, this work took almost three years from 2016 to 2018. And from here we started to proceed, if you notice 2016, 2017, 2018 , the achievements were very weak compared to 2019, in which most of economic and service achievements were made. And I am not worried that there will be something that we see this year, I made a great effort in establishing it, and we achieve 70% to establish a state center with high efficiency, and the remaining 30% will be completed in the next year and a half.
On the question of how he chooses his work team, HRH Crown Prince affirmed that there is no doubt that competence and ability, etc., are essential, but the most important thing is the passion of the official and the responsible for what should be in a particular position. This is his personal issue, the passion for him, like Prince Abdulaziz bin Turki Al-Faisal, he is interested in sports and is worthy of this position, but the issue of sports is his personal issue. Passion is the greatest motivation for an official to move as much as possible. If there is an official without passion for the work he is doing, it is difficult to achieve very large goals and aspirations. You can see the same thing for many ministers, if any name is put forward, I can give you where his passion came from and why he wants to achieve in every sector he works in.
Regarding the revenues of the Public Investment Fund in 2025 and 2030, HRH Crown Prince stated that the revenues of the Public Investment Fund to the State Treasury are now zero, and the goal of public investments is to grow and to provide a very large fund so that after 2030 it becomes a tributary of the state's revenues, and today we do not want to consume the Public Investment Fund and transfer profits for the state budget at the expense of the fund's growth, such as what I mentioned, the goal changes within the Public Investment Fund, and it will be officially announced to ten trillion riyals in 2030, so our main focus is the growth of the size of the Public Investment Fund and this is what happened in nearly four years. It grew by 300% and in the next five years it will grow by 200% and, God willing, in 2030 we will reach ten trillion, after which we will adopt a policy according to the situation at that time. How much revenue will we spend from the Public Investment Fund will not exceed 2 and a half percent of the fund's size in order to maintain the continuity of the fund's growth.
Regarding his question about the new barrel of oil, HRH Crown Prince said that we want many barrels, a barrel of oil, and a barrel from the downstream in the petrochemical and process industries sectors and so on, and we want a barrel of oil from the Public Investment Fund that has revenues, and also different revenues to diversify the economy.
Regarding the percentage that will go to the state treasury, where it was 3% of revenues, HRH Crown Prince replied by saying, ''It is true, the profit of the fund was between 2 and 3%, now the PIF is targeting 6 or 7% and this has been achieved in most of the fund's investments. More importantly, how much the fund was spending from investments inside the Kingdom of Saudi Arabia, before the vision the PIF spent only 3 billion riyals, and in 2020 it spent 90 billion riyals in Saudi Arabia in Greenfield, new investments and not in the stock market or anything else, and this year 2021, the Public Investment Fund will spend 160 billion, what does 160 billion mean? If you see the state budget, the capital spending is 150 billion'.
HRH Crown Prince added, "Today, the PIF is spending more on new investments inside the country than the capital spending of the state budget, and that means that today the PIF is moving the Saudi Economy more than the state budget. This will continue in an ascending form until 2030 to nearly 400 billion riyals. The PIF spent on new investments, which means almost 3 times or less with a small amount of what the state used to spend in capital spending inside Saudi Arabia. Of course, the question will come that the volume of the PIF today is 1.5 trillion Saudi riyals and in 2030, 4 trillion riyals, how will this amount come and how will you spend it? In the PIF, we should not keep the assets. In other words, if the asset is ripe, we should sell it. If this asset is in stock market, we reduce our percentage and keep a rate that gives us control and a guarantee that this company will continue to grow.
HRH Crown Prince continued, saying, "I cannot give you examples because they affect the Saudi stock market in one way or another. This issue may involve legal procedures contrary to the law. If I clarify something specific, no company existing in the PIF won't last for one day unless it offers shares for public subscription as " ELM "or something else. Of the PIF companies, there are IPOs during this year and in the coming years, any new company that we establish will offer shares for public subscription, after achieving profit in no more than five years such as NEOM, the Red Sea, Qiddiya, Al-Souda, or other projects. Annually, we get (rate money cash) from outside, and we take this cash and re-inject it into new investments within the Saudi economy. This way brought 90 billion riyals last year and will bring 160 billion this year and will help us to be, progressively, until we reach 400 billion riyals, in 2030. In 2030, PIF will be the leader of capital spending in Saudi Arabia, not the state budget. Actually, this year, this PIF is the leader of capital spending inside Saudi Arabia.
Regarding the idea that the Public Investment Fund will replace oil or that it will be a non-essential supporter, HRH Crown Prince said, "Oil means ending, in a wrong perception among many analysts that Saudi Arabia wants to get rid of oil, this matter is entirely incorrect. We want to benefit from everything in Saudi Arabia, whether in the oil sector or different sectors. For example, in the oil sector, most international analysts unanimously expect that oil demand will grow until 2030; the majority expect that oil demand will grow until 2040. The minority expects that in 2030 the oil demand will start to decrease gradually until 2070. On the other hand, supply lost much faster than the decline in oil demand. For example, the United States of America will not be an oil-producing country after ten Years; today, it produces approximately 11 million barrels. After ten years, it will hardly produce two million barrels. China today produces 4 million barrels, and it will produce zero barrels in 2030 or something marginal. Russia today produces approximately 11 million barrels; after 19 or 20 years, it will produce one million or less or more barrels, as the supply decreases much more than the decrease in oil demand. Oil demand will grow until 2030 and will grow until 2040, as most analysts expect, but the supply gradually decreases after five years. This means that later in the future, Saudi Arabia will have to increase its production to estimate the oil demand, and this is a promising part, but we should not rely on it. The other part of the oil sector is when you go from downstream, your profitability increases. Today Saudi Arabia produces oil materials and derivatives and nearly 800,000 barrels per year. Today, we aspire with Aramco that Saudi Arabia produces 3 million barrels in 2030 to various transformational industries; this is another dimension that achieves tremendous growth. Three million barrels have a minimal impact, which will be twice the crude barrel produced from oil, in an extensive Aramco capital spending program announced in Shareek Program with a value that may constitute 40 or 50% of the program. Also, the opportunities Aramco has in achieving various industries based on its demand are tremendous. Today, Aramco is the largest charterer of ships worldwide, so Aramco has a chance to create local content in manufacturing ships. It started a couple of years ago to manufacture ships; it will be one of the largest industrial companies in the field of ships, which applies to pipes, wires, and various parts. Today's goal in Aramco is that 70% of its capital spending is related to the local content, part of it is provided by subsidiary companies to Aramco, and various Saudi companies provide part of it. Even in the oil sector, the opportunities are present and very huge and may bring about sufficient radical change.
HRH added, " We are not an oil sector. We want to increase our benefits from the oil sector, manufacturing industries, etc. Also, we are working on various other opportunities far from the oil sector to diversify our economy and increase the size of our economy."
Regarding Aramco's recent IPOs, HRH Crown Prince said that " the IPOs will continue to be for Aramco, but now I cannot announce details, but it may soon, and there may also be some sales to major international investors that will be announced within the next year or two, and I do not want to give promises, and the deals do not take place, but now there is a discussion about the acquisition of 1% by one of the leading companies in the world, and this will be a very important deal that boosts Aramco's sales in the country of that company or the company, which I cannot mention its name, but a very large country if it obtained 1%, it will boost Saudi Aramco industries and enhance the demand for Aramco products in the country as well as the company. There are also discussions with other companies to buy different shares in a part of Aramco's asset that may be transferred to the Public Investment Fund, and in part, it will present annual IPOs in the Saudi market."
On the competitiveness of the private sector, HRH Crown Prince explained that the fund enhances the business opportunities of the private sector which used to rely immensely on the government's capital spending which stands between SR 100 to SR 500 billion annually, adding that the fund has doubled this spending to reach SR 160 billion annually.
On the ROSHN Housing Units venture, HRH Crown Prince noted that the major problem was increasing the housing percentage, citizens' main demand, which was considerably low compared with the international standard of 60%, adding, "I was worried because it was a very challenging period that required a comprehensive restructuring for the central government with complete tools all coupled with the challenge of restructuring the Ministry of Housing and unable to meet the envisioned goals in a very short time during the past four years."
With the existence of such concerns and challenges and the inability or delay of the Ministry of Housing to achieve the necessary preparedness levels, HRH Crown Prince said that the ROSHN venture has been launched in light of the expected growing demand for housing units during the next ten years which may exceed 4 million.
His Royal Highness explained that the ROSHN venture targets the construction of one million housing units during the next five years with a low profit margin of 22.5% on 3% to be affordable for citizens in case the Ministry of Housing manages to carry out its mandate within the timeframe set. "Fortunately, ROSHN has been established and the Ministry of Housing has carried out its duties in cooperation with other stakeholders. Under the Saudi Vision 2030, ROSHN is set to provide around one million national housing units as per the first objective while the second objective of ROSHN unfortunately means that more than 95% of the real estate developers are very primitive, drawing the designs and failed to deliver the sewage, water, electricity and telecommunications services. They sell designs without any services to citizens who build their houses and then the suffering begins."
HRH Crown Prince added that citizens are plagued with poor infrastructure services in their neighborhoods, explaining that the country is in dire need of strong real estate developers adopting international standards in place in advanced countries and this is the second objective of ROSHN which, he said, plans to meet 25% of the Saudi demand. "However, no one would buy from the private sector if they fail to apply the same standards of ROSHN."
"ROSHN's profits have seen an increase of 7% and more with its housing projects and this is another target of the (Standard) which is not a new idea and was in place during the reign of King Faisal and the beginning of the reign of King Khaled and Prince Musa'id bin Abdulrahman during which some ministers and officials had opposed granting a role to the private sector and the whole idea was rejected due to that historic circumstance and the poor designs and services to the housing and real estate units in Saudi Arabia and, if the idea had been approved, we would now have the largest real estate companies in the world but better late than never anyway."
"Today, the ROSHN Company targets the development of the real estate sector in the Kingdom to meet part of the existing demand, HRH Crown Prince said, explaining that the advantage from buying from ROSHN is that you are not buying a housing unit with a reasonable cost compared with the other real estate fund but at least there are water, sewage, pedestrian and all other services that a neighborhood needs and you don't need to go out the neighborhood unless to do your work or enjoy other places.
On His Royal Highness's interest in environment inside and outside the Kingdom and in investing in the Red Sea islands, HRH Crown Prince said, "The beauty of the Red Sea lies in the environment, meaning Saudi and non-Saudi visitors of the Red Sea seek enjoyment of the environment and they want to see clean beaches, clean water, corals and good fish and seafood. If you destroy the environment, you destroy all tourism opportunities because tourism is based on actual services and historic and environmental sites and this is one side and the other side, which people in my generation or the generation before might know, the number of sand storms was a lot less probably 70% less than what we suffer now. This is dangerous for our children and life. The amount of sand we inhale on daily basis and throughout the year has risky consequences on our health and it adds tremendous burdens on the healthcare system in the future. It's undoubtedly that we want to restore the glamor of nature as it used to be.
His Royal Highness added: "The vegetation cover in Saudi Arabia has decreased in the past 59 years by almost 70%, and therefore, there was a target to raise the vegetation cover to 200% in 2030 and return to our normal state, and what has been achieved in the past four years is that the vegetation cover has increased by 40% and this had a positive impact on decreasing sandstorms by 30% or more had a very large effect of increasing the level of rain in recent years because vegetation cover increases oxygen and oxygen helps passing clouds with the formation of oxygen that occurs from vegetation cover in which the water level is good or better than rain and this we noticed at the end of the past two years due to raising the vegetation cover by 40%. Of course, many policies have been taken to achieve this thing, and back to the government center and the Ministry of Water, they cannot do anything without a clear strategy in cooperation with concerned parties and the ministries of labor, environment and interior and other ministries were working on achieving these targets. For example, the environmental security section was set up within the Interior Ministry to preserve the environment and laws have been drafted to prevent logging, which helped raise vegetation cover to 40%. These developments have created very different opportunities with experiments that have been applied across the Kingdom, chief of which were the experiments by the Royal Commission in the city of Riyadh. There were wild trees that cost less than 70 SR per tree and only every three years, or every year, one month, three months once and the third year twice a year only. Then you can live with nature for this has generated a greater ambition. If we put a certain amount of money annually, how much this can help in planting a tree in Saudi Arabia until we ultimately reach the target of ten billion trees. Of course all depend on the budget to measure if we could achieve the ten billion trees target or during 30 years. But this will change all the figures and percentages related to the vegetation cover which, instead of 200%, might increase to more than 1100% during 10 and 30 years once we get done with the 10 billion trees budget. There is plenty of environmental resources, be they corals, beaches or forests in southern regions, and agricultural projects and other initiatives or even inside major cities like the Green Riyadh, gardens, among others. These have a direct impact on tourism and on the quality of life that enable us to attract capital and investments. We seek to attract contracts inside the Kingdom and we want to protect Saudi contracts and investments. We want to improve the quality of life and one major pillar towards achieving that objective is the environment which definitely has a direct impact on attracting investments and contracts to the country. "
HRH Crown Prince affirmed that the numbers that we expect to pump inside the Kingdom of Saudi Arabia are 10 trillion riyals, which will be huge by the government and government development funds, which are the annual budget, that is 100 billion to one trillion riyals, this is approximately one trillion riyals every year. Each of the development fund, including the National Development Fund, the Real Estate Development Fund, the Tourism Development Fund, the Cultural Development Fund, and other funds as well, will pump annual sums of money from an estimated one trillion riyals annually, according to the budget each year. These are 10 trillion, which we have always had, adding that the Public Investment Fund will pump 3 trillion riyals. As for Shareek program for large companies in the Kingdom of Saudi Arabia, HRH Crown Prince said that we were negotiating with more than 30 companies to put with them policies of not disbursing profits, and I will turn their profits into capital spending, and the shareholder in these companies benefit from the loans from the companies. So instead of taking 3%, 4% or 5% in returns, shareholders benefit from 30% to 40% of the growth in the company and can sell the 5%, which they profit in the size of the growth of the company and achieve a return that they used to achieve every year or keep it and continue in the company. So, we reached an agreement with 24 companies that they are fully committed not to distribute profits or partially commit not to distribute profits and convert them into capital spending. This is 5 trillion Saudi riyals. So these are 3 trillion riyals from the Public Investment Fund and 5 trillion from 24 Saudi companies, and this cash will increase in the future. All this creates huge opportunities for the private sector.
Regarding taxes, HRH Crown Prince said that there is an agreement between the Gulf Cooperation Council countries to have a Value-Added Tax (VAT) between 5 to 10% and to have the least VAT percentage in the world. As you know, one third of the Kingdom of Saudi Arabia's population are non-Saudis and with economic growth, the population will grow too, but the number of non-Saudis will also grow, as we may reach in 2030 or 2040 to 50% Saudis and 50% non-Saudis within the Kingdom of Saudi Arabia. If we don't set the VAT, especially with the opening of tourism and the target of 100 million tourists in 2030, there will be a very large leakage of support obtained in the Kingdom of Saudi Arabia. So, 5% and 10% VAT guarantees that the revenue from non-Saudis' consumption within the Kingdom of Saudi Arabia returns to the government and the government spends it on all sectors that Saudis need, whether in health, education, infrastructure, or even salaries. The 15% VAT during the pandemic and economic challenges that the whole world faced in 2020, oil still constitutes a major part of the income of the Kingdom of Saudi Arabia, and we saw that oil prices reached less than zero in 2020, which was a great challenge. Either we change everything, change all our goals and back from all our dreams for the future, or take measures that may be harsh but will last for a short period of time, until things return to normal. One of these harsh measures was to raise VAT to 15%, in order to avoid canceling a large part of the allowances or reducing salaries and others. HRH Crown pointed out that this is undoubtedly a very painful procedure. My interest is for the country to grow and develop, and for Saudi citizens to be satisfied every day more than the day before, but it is also my role and my duty to build them a long-term, continuous growing future. There was a set of decisions, including the 15% VAT, which is a temporary decision that may last one to five years maximum, and then matters will return to normal. Once we restore balance after this pandemic, we will return to the normal number. HRH Crown Prince affirmed that there will be no income tax in the Kingdom of Saudi Arabia.
Regarding the Kingdom of Saudi Arabia's approach and policy to increase citizens' income, HRH Crown Prince said I have priorities before reaching that. The first priority is to have stable and strong finances that can continue and not be depleted, and not fall into a very difficult place that we cannot provide growth in the future, for example, I can highly spend and drain the savings of the Public Investment Fund and the savings of the Central Bank and reduce the unemployment rate in one day to 3%, but is this sustainable? This will last for 5 years, and then there will be a bigger problem and a drain on your finances, and you will not have the capabilities or the chance for advancement. So, the first thing is to maintain a solid, continuous, strong, sustainable financial system that leads to the desired purpose forever.
The second priority is to preserve the economy so that it can grow and be able to advance with tools far from the government. As I mentioned to you today the thing that leads the development in the Kingdom of Saudi Arabia is the Public Investment Fund, but even the 24 major companies pump more than the Public Investment Fund and the government this year, so the government pumped 10 trillion and companies pumped approximately 5 trillion, half of what the government pumps. If government's capital spending for the coming years is trillion and a half, and if the capital spending of the Public Investment Fund is nearly 3 trillion, then you have about 4 and a half trillion and the 24 companies will pump 5 trillion in 2030. We will continue to pump financial spending over 10 years from one trillion to a trillion and a half, but companies after 2030 will pump 7 trillion or 8 trillion riyals into the Saudi economy in the years after, and the Public Investment Fund will pump in the ten years after that 5 and 6 trillion
Saudi riyals, and this leadership will turn into this other channels that will be sustainable, spending, making profits, taking revenues, and spending again at higher rates, as this pace will continue more.
On the rise in energy prices, especially fuel and that the Kingdom is a rich country, HRH Crown Prince said an oil state is not a rich country, Algeria is an oil country and Iraq is an oil country, are they rich countries? Of course, a rich country is valued by its capabilities and economic income compared to its population. It is true that we were a very rich country when the population was 6 and 7 million people. We had 10 million barrels, and the population was very few. Today, we have 20 million people, and the number is growing. If we don't distribute our tools and preserve our assets and direct them in the right way, we will turn day after day into a poorer country or we maintain these assets and direct them properly so that after a very few years, we overcome this obstacle and reach continuous, sustainable growth and prosperity.
In a reply to a question about the Red Sea projects, and whether they will become (New Maldives) in the Kingdom, HRH Crown Prince said: "We must offer something new in projects of the Red Sea in order to attract tourists with new services and different culture."
HRH Crown Prince disclosed that "the projects were divided, based on the architectural heritage of Hijaz, Tabuk, Jazan or Asir," adding that some projects were designed in an innovative style that translates the shape of the Red Sea, as previously announced."
With regard to unemployment, HRH Crown Prince said that "during the fourth quarter of 2020, we reached 12%. This year, we will break the barrier 11%, reaching 10%. The target in the vision is 7%."
"We will achieve 7% very earlier. We are targeting the normal rate of unemployment between 7% to 4%. If we reach these targets, we will start a next step. Today, we only have 50% good jobs in Saudi Arabia, and the rest are bad jobs. What do a good job and a bad job mean? A good job means that you eat, drink, wear, and buy all things you need. Also, you have a house and a car as well as all your basic needs, in addition to the ability to save money, to spend on entertainment, and to live a happy life. Other 50% are bad jobs which mean that you eat, drink and have your main needs and a house, but you can't save money and grow your wealth and can enjoy only a little. As we reach the normal unemployment rates, God willing, before the vision, between 7% to 4%, the next objective will be to raise good jobs from 50% to 80% in the Kingdom," HRH Crown Prince said.
Regarding the health transformation program, HRH Crown Prince said: "The governance law is clear and explicit that health and education services are free for citizens. The transformation program in the health sector will make a major change in the level of services. We are working today with an initiative that will be launched soon with regard to converting King Faisal Specialist Hospital into a non-profit hospital owned fully by the government, but its goal is non-profit and is funded by about SAR 10 billion from the state budget. It will also get revenues from SAR 6 billion to 12 billion in addition to the government budget, a very large amount of SAR 22 billion. So, we will greatly expand research and inaugurate branches and services, with a non-profit goal. All these revenues will support health investments inside the Kingdom. Some governmental hospitals will be developed and others will be privatized."
HRH Crown Prince highlighted the tourism sector, which will create 3 million jobs from now until 2030, one million jobs for Saudis and two million for foreigners for various reasons. But, when we find three million jobs for Saudis and two million jobs for non-Saudis, we will localize these jobs in the future. The industrial sector has opportunities, but the number is important. Does our unemployment increase or reduce? Unemployment is reduced. If we reduce, at the end of the year, unemployment by 4% from 14% to 10%, 4% in four years will be ten years. I do not want to give a specific number. When we reach 7%, we will work to improve Jobs and raise the income of 50% of citizens whose jobs are bad.
With regard to the public and higher education, HRH Crown Prince pointed out that there is community education for the society in general. So, Is the society positive? Is the society effective and pushing you? We have the means of technology that you can learn and find information very quickly, etc. When we talk about public education, the ministries of education, 30 years ago, were keen to provide information. Today, the resources are open. We focus on the volume of information. So, we provide the main information that you need, reading, writing, mathematics, etc. We will focus on skills. How do you search about the information? How do you develop yourself and your capabilities? How do you plan for the future? Of course, it will not be overnight. The human resource development program has been launched or will be launched soon. It will tell about these details and our journey in the next ten years.
With regard to the higher education, HRH Crown Prince said that "we have five universities in different indicators classified among the most important 500 universities in the world. The vision's aim is that 3 universities are classified among 200 universities in the world. We may work on a very ambitious target that we may not achieve, but if we approached, it would be good, which is to have a university from the top ten universities in the world, which is "King Saud University". If it were number 20 or 30, it would be good. These details will be announced in the strategy of Riyadh City. Higher education is also covered in this aspect, as I mentioned to you in the technology sector and easy access to information. Nevertheless, our education today is not bad. We have graduated the Saudi public education and higher education. We aspire for the better."
HRH Crown Prince affirmed that "we are not compared with (City-state) like Singapore, because it is a very narrow area, with a very small population and no geographical area. We are compared with France, which our rankings are close to it, Britain, the United States or China. These countries have a huge geographical area and a very large population."
Regarding Riyadh city and its future, HRH Crown Prince said that "80% of the world's economies are based on cities. In the coming ten and twenty years, 90% of the world's economies are based on cities. If you want to achieve development, we have to create development in the city because it is your greatest performance in creating and growing jobs," stressing that Riyadh was well planned by King Salman.
He added that Riyadh is the best city for infrastructure in Saudi Arabia and is one of the best cities in the Middle East. There are hardly two or three cities with the same level in the Middle East. This provides an opportunity to manufacture many projects that serve Saudi Arabia in the fields of employment, economic growth, etc.
HRH Crown Prince added that "there are about 3 million jobs in Riyadh city. We want to reach 20 million people. We need to create approximately 6 million additional jobs in Riyadh, indicating that Riyadh today constitutes about half of the non-oil economy in the Kingdom of Saudi Arabia. "If you want to create jobs and grow, we have to focus greatly on Riyadh city. It is the biggest incentive for this very huge growth," he announced.
With regard to the congestion in Riyadh, HRH Crown Prince said, "If we compare Riyadh with crowded cities, compare Riyadh with the million-population cities and with cities with a population of more than 5 million people, based on these indicators, adding that Royal Commission for Riyadh City will announce these indicators.
"Riyadh is number one in the world in the traffic, in comparison with Los Angeles, New York, Tokyo, or London. The journey that takes an hour in Riyadh, it takes five hours in Los Angeles, it takes 3 or 4 hours in New York and it takes 10 hours in Tokyo. Riyadh is not compared with cities of 3 million people and a million population. Riyadh is compared with cities with more than five million people. We are the first. If the population in Riyadh grows to 15 or 20 million, it will be a challenge. Riyadh's strategy aims to develop transportation through highways and new roads, including the metro, public transport and other services, which will be announced in the Riyadh strategy.
Regarding the concept of moderation, HRH Crown Prince disclosed that "moderation" is a very broad word. All Muslim jurists and scholars, since more than thousand year, seek to define what the concept of moderation is. I do not think that I am in a position to define what the concept of moderation is as much as I adhere to the Constitution of the Kingdom of Saudi Arabia, which is the Holy Quran, the Sunnah and the basic law of governance.
"Our constitution is the Quran which will last forever. The Basic Law of Governance stipulates it very clearly. We, as the government, the Shura Council as a legislator, or the king as a reference for the three powers, are obligated to implement the holy Quran. With regard to social and personal issues, we are obligated to apply the texts stipulated in the Quran explicitly. I mean, I should not apply a Sharia punishment without an explicit text from the Quran or an explicit text from the Sunnah. Whenever we oblige ourselves to a certain school or scholar, it means that we are deifying human beings," HRH Crown Prince said.
Regarding the recently-approved four personal status laws, the Crown Prince said that the whole world is following explicit systems and laws organizing life of people. Our job is to enact laws of the Kingdom of Saudi Arabia, not contradicting the Quran and Prophet's deeds and sayings on one hand and not contradicting our interests on the other, he added. Not only that, but such laws and systems should manage to preserve the security and interests of the people of the Kingdom and, moreover, help develop and prosper the nation, he said, adding that laws should be in line with those followed internationally. He cited that if you target to attract some 100 million tourists and create three million jobs, and tell the external world that you have invented your own laws which contradict theirs, nobody will come to you. He said that, if you want to double anything like what we did to double the foreign investment from SR5 billion to SR17 billion, then investors will come. But if you say you have invented new laws that contradict with the laws observed outside, whereas their lawyers are not aware of, then they will not advise their proxies to pump billions of dollars inside the country. The result is a boycott, he concluded this point.
Then what is needed is that you enact laws which are observed internationally and at the same time not contradicting your constitution, and the Quran, according to the targets, interests and security of the nation aiming to further push for its development and prosperity.
On the Crown Prince's view on openness to the world, he said that had your identity could not withstand the vast diversity of the world, then your identity is weak and you have to drop it. But if it is strong and genuine, then you can develop it by adjusting its negatives and motivating the positives to keep it working and developing. He cited national costumes, traditions, and cultural and historical legacy as well as our Islamic heritage as constituting an integral part of our culture that we are obliged to develop and enhance to become one of the world's cultural pillars. I think that our identity is very strong and a source of pride, he said, adding that it is an integral part of our cultural invention which is based on the Islamic and Arab identity and cultural and historical legacy of our nation.
Asked to comment on a campaign to neutralize the extremist address, HRH Crown Prince said that extremism as an approach of life and practice is not permissible. He cited Prophet Mohammed's advice to his followers to keep apart from such behavior. He stated that extremist behavior and belief in terms of religion, culture, and belonging or any is a dangerous thing according to the Prophet's statements. Citing recent history, he said the Kingdom of Saudi Arabia was a central platform for Islamic extremists and terrorists as they consider it the cradle of Islam, site of its sacred places, destination of annual pilgrims and daily worshippers. He described extremists as criminals who deserve utmost punishment as they have committed serious crimes against humanity and deprived the country from rare opportunities for development, citing Usama bin Laden as an example of those who targeted the Kingdom as a platform of their plans. He also recalled that some time ago, the Kingdom was subject to extremist elements belonging to different ideological principles like Pan-Arabism, socialism and communism to enter the Kingdom and affect its key political or economic organs, resulting in dire consequences and severe losses in the past years.
Today, we cannot attract world capital or tourists once if ever we are patronizing an extremist ideology in the Kingdom of Saudi Arabia, he said, adding that if you want to augment jobs to millions, reduce unemployment, flourish the economy and increase income, you have to eradicate such projects for the benefit of your religion and nation as the extremists don't represent the religion of Islam in any way.
Asked about his foreign policy philosophy, HRH Crown Prince said it is based on the interests of the Kingdom of Saudi Arabia, themselves based on the interests of people and designed to preserve all of us.
With regard to influence in politics, HRH Crown Prince said that influence means achieving interest, the Public Investment Fund, as an example has influence and a good reputation around the world and a major engine in many sectors globally, which means the world has become open to the Fund investments and the Fund became attracting new opportunities to invest in them. We had many investments because of the influence of the Public Investment Fund and its reputation since the beginning of the Vision, including, for example, investing in Uber, it is not the Fund that searched for Uber, it is the other way around, so create influence in various aspects to achieve the interest of the Kingdom of Saudi Arabia, without a doubt, this is required in a way that does not conflict with the United Nations Charter or the laws of the world countries.
Regarding relations between Saudi Arabia and America after the arrival of the new American administration to the White HouseŘŚ HRH Crown Prince said, "Of course, there is no 100% agreement between any country even with the Gulf countries and the countries closest to you. There must be a margin of difference, and it is expected even in the same house that you do not find brothers who agree 100% on everything. With different American administrations, the margin of disagreement may increase or decrease. Still, more than 90% of the Biden administration are agreed upon in Saudi-American interests. Everyone works to enhance them in one way or another, the last of which is joining the new group aimed at important targets of clean energy for the environment. Saudi Arabia was one of the participating countries. Our interest is always strengthened, and matters on which we disagree constitute 10%. We work to find solutions and understandings for it, neutralizing its threat to our two countries and promote our interests.
The United States is undoubtedly a strategic partner for the Kingdom of Saudi Arabia, a partnership for eighty years and has a great impact on the Kingdom of Saudi Arabia and the United States of America, so you can imagine if ten million barrels of cheap oil from a production cost of three to six dollar its contract went to Britain, the U.S would not be in its current position today.
On a question about Saudi Arabia's contribution to America's power, HRH Crown Prince said that If this contract went to Britain,the United States' situation would be completely different today, even for us if this contract had gone to Britain, there would be pressure on us when Britain colonized most countries in the region in demarcating borders and in our situation we may face more pressure, but the contract with the United States gave an unwavering American interest, which made Britain reconsider anything or any pressure on the Kingdom of Saudi Arabia. The United States in the fifties constituted 50% percent of the world's economy, today the size of the American economy constitutes 20% of the volume of the global economy, and the world began to regain its balance after the First and Second World War. We are working to maintain our strategic partnerships with our partners in the region, who are our most important partners, starting with the Gulf countries, Arab countries, and Middle Eastern countries. We are also working to strengthen our alliances with our partners around the world, the United States of America, Britain, France, Europe, and other countries, and we are working to create new partnerships with everyone, whether Russia, India, China, Latin America, Africa, and others, for the interests of the Kingdom of Saudi Arabia without harming any other country in the world. Today, China, Russia, and India announced that Saudi Arabia is a strategic partner. The Kingdom is still a strategic partner for the United States of America. Finally, every country has a choice. If we can work with them to accomplish what is suitable for everyone, it is there; even if not, there are plenty of options in the world.
HRH Crown Prince affirmed that the Kingdom of Saudi Arabia will not accept any pressure or interference in its internal affairs, explaining that the Charter of the United Nations explicitly states the sovereignty of states and their complete independence. The problem of the world that led to the World War I (WWI) and World War II (WWII) was the interference in the affairs of states, as this pact came to resolve a long crisis of Colonial eras until the First and Second World War, and were resolved by the United Nations Charter, and one of its most important pillars is the sovereignty of states and non-interference in their internal affairs. Any country interferes in the internal affairs of another country means that it has challenged the charter that preserved the peace, security and stability of the world after WWII, made world thrive in the last 50 to 60 years.
Regarding relations with Iran, HRH Crown Prince said that Iran is a neighboring country, and all we hope is to have a good and distinguished relationship with Iran, explaining that the Kingdom does not want Iran to be in a difficult situation. On the contrary, Saudi Arabia wants Iran to prosper and grow, and to have interests in Iran and wants Iran to have interests in the Kingdom of Saudi Arabia, too, to push the region and the world to grow and prosper.
He added that our problem is in Iran's negative behavior, whether its nuclear program or its support for outlaw militias in some countries in the region or the ballistic missile program, indicating that the Kingdom is working with partners in the region and the world to find solutions to these problems, and we hope to overcome them and to have good, positive relationship and beneficial to all.
Regarding the Yemeni issue, HRH explained that this is not the first crisis between the Kingdom of Saudi Arabia and Yemen, as there have been crises, since the era of King Abdulaziz , and were addressed, and then another crisis came in the seventies and eighties and was addressed, in the nineties until the 2009 crisis, which was addressed in a short period of time, and then the last crisis after the Houthi expanded from 2014 until it reached Sana'a, in the beginning of 2015, and then turned against the legitimacy, indicating that this is illegal in Yemen and internationally and there is no country in the world that accepts to have a militia or any armed organization, outside the law of a state, on its borders. This is unacceptable in Saudi Arabia and in the region, and also in Yemen. We have seen this behavior and its repercussions on Yemen. We hope that Al-Houthi sits at the negotiating table with all the Yemeni parties to reach solutions that guarantee the rights of everyone in Yemen and safeguard the interests of the countries of the region.
HRH Crown Prince indicated that the Kingdom had offered a ceasefire, economic support for Yemen, and everything they wanted in exchange for a ceasefire by Houthis and to sit at the negotiating table.
HRH Crown Prince said, "I think that Houthi undoubtedly has a strong relations with the Iranian regime, but Al-Houthi is in the end from Yemen and has an Arab and Yemeni tendency, in which I hope they take into account the Houthi's interests and interests of Yemen before anything else."
On a question about what comes after the Kingdom's 2030 vision, HRH Crown Prince replied that planning is ongoing and that the vision places us in a very advanced position in the world, but 2040 will be the stage of global competition.
HRH Crown Prince explained that the Saudi citizen is the greatest thing that Saudi Arabia has for success, and that without a citizen we cannot achieve anything from what we have achieved. If the citizen is not convinced of what we are working on and if he/she is not ready to bear difficulties and challenges or not ready to be part of this work, whether it is a government employee, minister, businessman, private sector employee, or any citizen in any work, without a doubt, all that we say is only ink on paper.
HRH indicated that fear does not exist in Saudi law.
HRH said, " I think fear does not exist in Saudi law, but sometimes we may worry and we work to overcome concern, explaining that the Kingdom has made very great achievements in the past four years, and we will achieve more until 2025, and make Saudi Arabia thrive more and more.
20:31 LOCAL TIME 17:31 GMT
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