Hussein Shobokshi
The recent interview last week with Deputy Crown Prince Muhammad Bin Salman in Bloomberg News, the international financial portal, has been a very interesting one. In the interview which reportedly lasted five hours, the Deputy Crown Prince laid out his vision for the Kingdom’s economy and its future.
The timing of the interview has been carefully and thoughtfully chosen keeping in view the current global economic situation.
The purpose of the interview was to announce the launching of the Public Investment Fund (PIF), which will eventually turn out to be the biggest sovereign fund in the world worth $2.2 trillion.
The most prominent of these companies of course will be the “Jewel in the Crown”, known as Aramco. It is worth mentioning that Saudi Arabia will offer only 5% of the value of Aramco in 2017.
The idea of creating this Initial Public Offering (IPO) is to have an influential economic climate in Saudi Arabia, in practical terms, post-oil.
The Deputy Crown Prince also added that Saudi Arabia will only freeze oil production if Iran and other oil producers agree to freeze oil production.
People who follow Saudi affairs are amazed and admire the Prince’s strong statements, which is usually not the style of Saudi policymakers.
As a result of this interview, there is definitely a “financial” and “psychological” effect on the Saudi economy. Also, it is an indication to those who closely follow Saudi affairs, about the country’s new policy and the direction the Saudi economy is heading.
With the selling of shares of Aramco in the Saudi market, the market value of the Saudi Stock Exchange will increase to an exceptional level of $5.5 trillion.
As the new phase of the Saudi economy continues to take shape and prepare for the next stage it will be a great and an enormous challenge to select qualified, reliable and trusted people.
To launch the “largest sovereign fund in history” and to manage it efficiently, a team of qualified and experienced personnel are required to manage this fund and such that we do not rely on experimental ideas.
The timing and transparency of issuing of such statements by Prince Muhammad Bin Salman has had a great positive impact on the psyches of the people involved in the economic and political world, especially during a time when there has been a significant rise recently in oil prices.
The rise in oil price is “temporary” and should not affect the new thinking of the Saudi economic vision.
