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Saudi Arabia will seek to diversify its sources of income and improve the efficiency of government spending as it strives to reduce its dependence on oil revenue, which has plunged since last year, King Salman said in a speech to the kingdom’s Majlis Al Shoura (consultative council) on 23 December.
The council is an appointed body that debates new laws and advises the government on policy.
The speech, which marks the start of the council’s new session was eagerly anticipated but failed to deliver details of how Saudi Arabia is going to deal with lower oil export income in 2016.
Analysts say they expect a more comprehensive statement about spending, how the kingdom plans to finance a substantial budget deficit in 2016 and possible privatisation and other government restructuring plans in next week’s budget announcement and in a “transformation plan” to be revealed by his son Deputy Crown Prince Mohammed bin Salman in January.
“The kingdom is committed to implementing programmes to diversify sources of income and decrease dependence on oil as a main source of revenue,” Salman said in the text of his annual address to the Shura Council setting out policy goals.
“Our vision for economic reform focuses on raising the efficiency of government spending, taking advantage of economic resources and increasing returns on government investments,” he added.
Noting the volatile economic conditions and lower oil prices in his speech, Salman said Riyadh’s fiscal policy was based on “preserving stability and balance between revenue and spending on big development projects”.
He said reforms would also aim to create an attractive environment for increased investment by both Saudi and foreign companies, simplify procedures and boost employment.
King Salman expressed Saudi Arabia’s support for a stable oil market, which he said would protect the interests of current and future generations, and added that the kingdom was committed to continuing oil and gas exploration.
King Salman called for a political settlement to the war in Syria and said that Riyadh wanted to preserve Syria as a unified nation incorporating all its religious sects. He added that any political solution would have to involve all foreign forces quitting the country.