Saudi crown prince says sovereign wealth fund will surpass US$600b target by 2020

Saudi crown prince says sovereign wealth fund will surpass US$600b target by 2020

RIYADH,. Saudi Arabia’s Crown Prince Mohammed bin Salman said the kingdom’s main sovereign wealth fund (PIF) will surpass its target of increasing its assets to US$600 billion (RM2.48 trillion) by 2020, as part of a plan to reduce the economy’s dependence on oil.

“We are now above US$300 billion, we’re getting close to US$400 billion. Our target in 2020 is around US$600 billion. I believe we will surpass that target in 2020,” the prince said in a Bloomberg interview published yesterday.

He added that the fund, with more than 50 per cent of its investments located in Saudi Arabia, will be investing in more places next year.

The fund would invest another US$45 billion in Softbank Vision fund, the world’s largest private equity fund, backed by Japan’s Softbank Group and the PIF, which invests in technology sectors such as artificial intelligence and robotics.

“We have a huge benefit from the first one. We would not put, as PIF, another US$45 billion if we didn’t see huge income in the first year with the first US$45 billion,” the prince said.

Locally, one of the biggest investments for the PIF is a planned US$500 billion business and industrial zone called NEOM extending into Jordan and Egypt, announced in October 2017.

Prince Mohammed said the first town in NEOM will be ready in 2019 or 2020, with the entire site completed by 2025.

Privatisation

The Crown Prince said his country will privatise more than 20 companies in 2019, helping the government’s strategy of diversifying away from oil exports.

“In 2019, we will have more than 20 services that will be privatised, most of them in water, agriculture, energy and some of it in sports”, the prince said in an interview with Bloomberg published today.

In April, the Saudi government said it aims to generate 35 billion to 40 billion riyals in non-oil revenues from its privatisation programme by 2020 and create up to 12,000 jobs.

The privatisation initiative targets 14 public-private partnership (PPP) investments worth 24 billion to 28 billion riyals. It includes the corporatization of Saudi ports and the privatization of the production sector at the Saudi Saline Water Conversion Corp (SWCC) and the Ras Al Khair desalination and power plant, according to official document published in April.

The prince said unemployment, which now stands at a record level near 13 per cent is part of the side effects of restructuring the economy.

He added that the kingdom’s economy today was much more powerful, with 2019 budget planned to exceed one trillion riyals for the first time, and with non-oil revenue rising by 300 per cent

“I believe the unemployment rate will start to decline from 2019 until we reach 7.0 per cent in 2030 as targeted,” he said. ? Reuters