Saudi Arabia

Saudi Arabia’s finance minister confirmed that the kingdom was considering imposing income tax on foreign residents as it seeks to raise non-oil revenues and cut spending to fund its $72bn plan to diversify the economy, the Financial Times reported. Riyadh, which is scrambling to raise funds needed for wide-ranging reforms from fiscal and investment policy to social initiatives, is taking the unprecedented step of tapping global bond markets and reprioritising domestic spending.

Saudi Arabia unveiled plans to more than triple its nonoil revenue by 2020 while cutting state handouts, in a broad bid to reshape the kingdom’s economy amid falling energy prices, The Wall Street Journal reported. The initiative, called the National Transformation Program, offers details on how the ruling monarchy plans to achieve long-term economic change in an era of cheap oil. The overall target is ambitious: Riyadh expects nonoil revenue to more than triple by 2020 to 530 billion Saudi riyals ($141.33 billion).

Saudi Arabia’s leadership has taken up the challenge of weaning the kingdom from its dependence on oil. Ahmed Ameen is just trying to keep his mobile-phone store open, The Wall Street Journal reported. Mr. Ameen hired a foreign worker to operate the shop in Saudi Arabia’s capital four months ago, but the worker left the kingdom after learning that a key part of the government’s economic strategy is to replace foreign workers with Saudis. “My shop is now closed and every day I’m losing money,” said Mr. Ameen, who has a day job and can’t run it himself.

Saudi Arabia’s credit rating has been downgraded by Moody’s because of the long and deep slump in oil prices, The Guardian reported. Moody’s Investors Service said it also downgraded Gulf oil producers Bahrain and Oman. It left ratings unchanged for other Gulf states including Kuwait and Qatar. Saudi Arabia is the world’s largest oil exporter. Moody’s cut the country’s long-term issuer rating one notch to A1 from Aa3 after a review that began in March. Crude prices fell from more than $100 in mid-2014 to under $30 a barrel in February, although they have recovered into the mid-$40s.

Saudi Arabia has announced a series of market reforms aiming to make its $400bn bourse more attractive to foreign investors ahead of a much-anticipated listing of state oil company Saudi Aramco, the Financial Times reported. The Capital Market Authority, the market regulator, plans by the first half of next year to implement the new regulations, including allowing securities lending and covered short selling, a first for the markets of the Gulf states. Limits on qualified foreign investors in companies listed on the bourse, known as Tadawul, will also be lifted.

Saudi Arabia unveiled plans to free the kingdom from its dependence on oil revenues, in part by selling a stake in its state-owned oil company and creating the world’s largest sovereign-wealth fund, The Wall Street Journal reported. The move represents an ambitious attempt to lay out a new economic trajectory for the country in an era of cheap oil. It is the brainchild of Deputy Crown Prince Mohammed bin Salman, the 30-year-old son of King Salman, who was entrusted by his father to oversee what are likely to be jarring changes in the kingdom.

Saudi Arabia is raising $10bn from a consortium of global banks as the kingdom embarks on its first international debt issuance in 25 years to counter dwindling oil revenues and reserves, CNBC reported on a Financial Times story. The landmark five-year loan, a signal of Riyadh's newfound dependence on foreign capital, opens the way for Saudi to launch its first international bond issue. It comes as the sustained slump in crude encourages other Gulf governments, such as Abu Dhabi, Qatar and Oman, to tap international bond markets.

A top Saudi prince has announced new elements of a plan to reduce the kingdom’s heavy dependence on oil, amid a drop in world prices that has sent shock waves through the Saudi economy. The plans include publicly selling shares of the state oil giant, Saudi Aramco, and routing much of its worth into a public investment fund, said the prince, Mohammed bin Salman, in an interview with Bloomberg published Friday, the International New York Times reported. The fund could become the world’s largest, he said, with more than $2 trillion in assets.

In pressed white robes and clutching crisp résumés, young Saudi men packed a massive hall at a university in the capital city this month to wait in long lines to pitch themselves to employers. It was one of three jobs fairs in Riyadh in two weeks, and the high attendance was fueled in part by fear among the younger generation of what a future of cheap oil will mean in a country where oil is everything, the International New York Times reported.

Officials in Riyadh are heaving a sigh of relief amid indications that Saudis are willing to shoulder unprecedented cuts to long-cherished government subsidies. But with predictions of more economic pain to come it is unclear whether they will accept further reductions to their incomes, the Financial Times reported. Facing its worst fiscal outlook in 15 years amid falling oil prices, the government announced an austerity budget last December, slashing spending to plug the gap and lifting petrol, electricity and water prices for consumers and gas and feedstock prices for industry.