In 2017, the leading institution in the credit rating, Fitch Ratings, said: When countries start reform programs at a time of low oil prices, their enthusiasm diminishes when oil prices rise, and this is a possible risk here, and continuing many of these initiatives requires decoupling”.
Looking at the projects of vision 2030 of the Saudi Crown Prince Mohammed bin Salman, we find that this prediction is applicable to the reality of the KSA currently, despite the high oil prices, there is not enough funding due to the high cost of bin Salman’s projects.
It is worth noting that during the past five years, oil prices recorded a sharp decline twice, but Saudi Arabia was at the time of the price hike, announcing new projects worth billions of dollars, however, these projects disappeared over time, and Saudi Arabia started looking for ways to cover its budget deficit, which amounted to $29 billion after it was looking for markets to take its increasing oil productions during the period of high prices.
Like the rest of the Gulf countries, the national product of Saudi Arabia declined, and it imposed austerity measures on citizens, reduced all its expenditures in all Vision 2030 projects, suspended projects, and postponed others, until NEOM stopped working for months due to the lack of liquidity of cash.
Saudi Arabia attempted to save itself by offering 5% of Aramco to the public, in return for the company paying dividends of $75 billion over the next five years, while the majority of the shareholders in the IPO that Aramco offered were made across the country, which failed to attract foreign investors.
Despite all these failures, Vision 2030 remains like a mirage; visible from far away, but not approachable or real.
Bin Salman has recently realized that he is inexperienced and that countries cannot be run with force and brutality, and that economy does not diversify and prosper based on dreams, that everything is subject to laws and precedents, and every progress and change has its reasons that must be taken into account.
Diversification of the economy, and changing its patterns needs time and realistic plans studied by specialists in investment and economics.
