RIYADH: Saudi Defense Minister and Deputy Crown Prince Mohammed bin Salman speaks during a press conference yesterday to announce his economic reform plan known as "Vision 2030". - AFP

RIYADH: Saudi Arabia said yesterday it would create the world's largest sovereign investment fund and sell shares in state energy giant Aramco under a vast plan unveiled to transform its oil-dependent economy. The announcement of the long-term reform program, dubbed "Vision 2030", marks the beginning of a hugely ambitious attempt to move Saudi Arabia beyond oil, the backbone of its economy for decades.

"This is not a dream. This is a reality that will be achieved, God willing," the main architect of the diversification plan, Deputy Crown Prince Mohammed bin Salman, told reporters, many of them invited from around the world. Although it comes against a steep fall in oil prices, the plan "was not created only" to face that challenge, the prince said, answering questions for 50 minutes at a royal palace, in a rare government press conference.

The plan foresees social changes in one of the world's most conservative societies, with women contributing more to the workforce, something that has already grown quickly over the past five years, to 30 percent from 22 percent. But Prince Mohammed said he did not believe Saudi society was ready to end its ban on women driving. "So far the society is not persuaded - and it has negative influence - but we stress that it is up to the Saudi society," he said, adding that change cannot be forced.

A green card system would also be launched within five years to enable expatriate Arabs and Muslims to live and work long-term in the country, Prince Mohammed said, in a major shift for the insular kingdom. "We will not rest until our nation is a leader in providing opportunities for all through education and training, and high quality services such as employment initiatives, health, housing and entertainment," he wrote in an 84-page booklet outlining the plan. If it works, Saudi Arabia "can live without oil by 2020".

Earlier, in an interview with the Saudi-owned Al-Arabiya news channel, the 30-year-old prince outlined measures aimed at reshaping the economy of the world's biggest energy exporter. "We have all developed an oil addiction in Saudi Arabia and this is dangerous and has hampered development in many sectors during past years," he said.

Mohammed said part of the plan is "to sell less than five percent of Aramco" in an Initial Public Offering (IPO), valuing the company at between $2 trillion and $2.5 trillion. By "selling even one percent of Aramco, it will be the largest IPO in the world", he said. Part of the funds from the share sale, Mohammed said, will be used to set up a $2-trillion sovereign wealth fund, which would easily surpass Norway's $865-billion fund as the world's biggest.

SWFs are used commonly as investment arms for oil-dependent nations seeking to diversify revenue streams, and are among the world's largest institutional investors. With so much capital on its hands, the Saudi SWF would make Riyadh one of the single most important global investors. It will be "by far the largest on the planet", Prince Mohammed said. The fund will include other assets as well as returns from the sales of Aramco shares.

The reform program which aims to propel the kingdom from its ranking as the world's 19th largest economy to the top 15, was approved by the government during a special cabinet meeting chaired by Mohammed's father King Salman, who urged Saudis to support the "ambitious plan". It also includes major structural reforms, privatizations and efforts to increase government efficiency, the prince said.

Under the plan, the share of non-oil exports will rise from 16 percent to 50 percent of non-oil Gross Domestic Product. For decades, Saudi Arabia, the largest economy in the Arab world, has enjoyed a windfall from its massive and easily exploitable oil reserves. Flush with oil revenues, the nation has built up enormous fiscal reserves and provided its 21 million citizens with a generous system of public employment, welfare benefits and subsidized utilities.

But analysts have long warned that the Saudi system, which counted on oil for 73 percent of state revenues last year, is deeply bureaucratic and inefficient. The collapse in oil prices - from more than $100 a barrel in early 2014 to around $40 a barrel this month - has underscored the dangers. But Mohammed assured: "We can achieve this vision even with $30 a barrel."

Riyadh posted a record budget deficit in 2015. With another $87-billion shortfall projected for this year, the government took the unprecedented step of raising retail fuel prices by up to 80 percent in December and cutting subsidies for electricity, water and other services. There has been increasing criticism on social media - a favorite outlet in the tightly controlled kingdom - from Saudis concerned over the hit to their wallets.

Prince Mohammed has enjoyed a dizzyingly rapid rise since his father became king 15 months ago, from being little known outside the ruling Al Saud family to become the driving force of Saudi plans to prepare for a future after oil. In his rare press conference, he presented himself as a modernizing leader who seeks to shake Saudi Arabia out of its economic slumber and its reputation for opacity and rigid bureaucracy, showing an interest in topics including education, the public role of women, and football. Saudi Arabia would prepare a new education curriculum, Prince Mohammed said. Despite previous reform attempts, the kingdom's schools have long been seen as focused on religious teachings rather than preparing students for a role in a modern economy.

Under the plans, Saudi Arabia would produce or assemble half of its defense equipment internally in order to create job opportunities, he said, and Riyadh would make foreign investment easier. Such was the speculation among Saudis over the details of the plan that hashtags associated with it were the top two trending on Twitter yesterday in the country with the highest rate of social media use in the Middle East.

But ambitious targets, such as raising the private sector share in the economy to 60 percent from 40 percent, reducing unemployment to 7.6 percent from 11 percent and growing non-oil income to 1 trillion riyals ($267 billion) from 163 billion riyals ($44 billion) were not explained further. Some Saudis said they had hoped for more detail on crucial issues such as education reform. There were no further details of plans to increase revenue from tax or of any changes to the political structure of the absolute monarchy. "For me as a Saudi, I am concerned by the education transformation plan," said a Saudi entrepreneur. "If it is not at the top of the list, why not?" - Agencies