Bloomberg Agency said: The Saudi government tends to sacrifice its current profits and is calling on major companies, such as Aramco and Sabic, to boost their investments locally by spending on projects and innovation, sufficient to accelerate the growth of the economy and cause a boom in employment. In a lengthy report on the future of the Saudi economy, she explained that Prince Mohammed bin Salman – the crown prince, wants major companies, including Aramco and SABIC, the chemical industry, to reduce their profits, most of which are paid to the state, and to spend the money locally.
Karen Young – a resident researcher at the American Enterprise Institute in Washington, said: The strategy amounts to sacrificing current profits for future investments to boost the post-oil economy, especially after the Corona crisis. In this context, the Public Investment Fund is preparing to pump 150 billion riyals annually into local projects, until 2025. Aramco recently said: It can maintain its dividends, which were the largest in the world last year at $ 75 billion, helped by the rise in crude. Brent down nearly 30% as more countries exit lockdowns.
It is expected that the wages and pensions of state employees will reach 491 billion riyals this year, which represents about half of the total spending of 990 billion riyals. However, if oil prices remain above $ 60, the kingdom may be able to cover salaries from crude oil sales alone, according to Ziad Daoud, chief emerging market economist at Bloomberg Economics. The state was able to raise non-oil revenues from 166 billion riyals in 2015 to 358 billion riyals in 2020, and the next phase requires an increase in productivity and export operations.