Saudi Arabia’s public investment fund (PIF) could be set for yet another cash boost after crown prince Mohammed bin Salman (MBS) announced plans to sell off more shares in state-controlled oil company Aramco.
The PIF is the main source of funding for projects such as the Neom megacity, set to launch in four years and estimated to cost $500bn.
It comes at a time that the Saudi economy has been ravaged by the effects of coronavirus, falling oil prices and a lack of investment due to its abysmal human rights record. Welfare payments have been cut and unemployment has rocketed in the country.
But the continuation of projects such as Neom have apparently taken priority in the kingdom – with many Saudis wondering why money is being tightened for them while so many billions are pumped into vanity projects that many are sceptical will ever come to fruition.
MBS made the announcement at an investment conference in Riyadh, but gave no more details.
He said: “There will be listings of Aramco shares in the next few years, and the cash from that will be transferred into the PIF so that it is pumped inside the kingdom and abroad by the PIF.”
MBS also claimed that the PIF would increase its value to $1.06 trillion by the end of 2025 by boosting the value of land developed under PIF funding and also through privatising government assets.
“I do not think that is difficult,” said the crown prince, with a characteristic display of optimism. “I think without the slightest doubt that it is a goal that can be achieved.”
MBS’s claims that this will not be “difficult” should be seen in the context of his increasingly desperate attempts to court foreign investors while also appeasing a domestic audience sceptical of his wild promises.
But whether his continued policy of selling off state assets to pay for beleaguered projects such as Neom will pay off in the long run remains to be seen.
READ MORE: NEOM’s Crimes: Violations of Saudi and Palestinian Peoples’ Rights
