In a recent five-hour interview with Bloomberg News, Saudi Arabia’s Deputy Crown Prince and newly emergent strong man, 30-year old Defense Minister Muhammad bin Salman, reiterated an earlier declaration that Saudi Arabia was preparing to partially privatize the state-owned oil company ARAMCO and transfer its shares into a giant, $2 trillion Public Investment Fund. The fund will then play a major role in the economy, investing at home and abroad.
“It would be big enough to buy Apple Inc., Google’s parent Alphabet Inc., Microsoft Corp. and Berkshire Hathaway Inc. ‒ the world’s four largest publicly traded companies,” he boasted.
The ultimate goal is that, in 20 years, Saudi Arabia will no longer be dependent on oil, but rather on the income produced by its investments.
Underpinning the plan is the need to cope with the multiple challenges: The precipitous drop in the price of oil and resulting deleterious effects on the Saudi budget; the regional upheavals that have posed new security challenges for the kingdom and resulted in an unprecedented degree of military muscle-flexing; uncertainty over the durability of the partnership with the US, the ultimate guarantor of the regime’s survival and well-being for the last 70 years; the far-reaching social and demographic changes within the country stemming from decades of modernization; the continued centrality of the ultra-conservative Wahhabi religious establishment, and the need to fashion governing institutions appropriate to the new and more complex realities.