King Salman says Saudi Arabia to diversify economy away from oil
Saudi Arabia’s King Salman said his government was striving to maintain Syria as a unified nation inclusive of all sects, according to the Twitter account of the Saudi Shura Council on Wednesday.
The king also blamed the government of Syrian President Bashar al-Assad for the rise of militant groups in the region, saying terrorist organisations would not find fertile ground without the Syrian government’s policies, the council said.
King Salman officially inaugurated a new session for the consultative body earlier on Wednesday.
Addressing the Shura Council, Salman said he has ordered economic reforms to diversify sources of income and reduce high dependence on oil following a sharp drop in crude prices.
“Our vision for economic reform is to increase the efficiency of public spending, utilise economic resources and boost returns from state investment,” he said.
“I have directed the Council of Economic and Development Affairs to devise the necessary plans, policies and programmes to achieve that,” he told the consultative body, without elaborating.
Oil income accounts for more than 90 per cent of public revenues in Saudi Arabia.
The world’s largest oil exporter, Saudi Arabia is facing an unprecedented budget crunch as the price of oil has dropped by more than 60 per cent since mid-2014.
At midday Wednesday, benchmark Brent North Sea crude for delivery in February stood at $36.50 a barrel, hovering just above an 11-year low.
The king said Saudi Arabia carried out a large number of mega infrastructure projects and boosted its fiscal reserves in the past several years when oil prices were high.
The size of the fiscal buffers has enabled the kingdom to overcome the consequences from the sharp decline in oil revenues, said the king, adding that development projects have not been affected by the drop.
Saudi Arabia is projected to post a record budget deficit of around $130 billion for this year, the International Monetary Fund says.
The IMF has advised Riyadh to implement reforms, including expanding non-oil revenues, warning that failure to do so would deplete its foreign reserves.
