With much pomp and fanfare, Saudi Arabia’s Deputy Crown Prince Mohamed bin Salman bin Abdel Aziz announced the eagerly anticipated Economic Transformation Plan (ETP) for a post-oil future for the kingdom. The prince said that his plan aims to wean the Saudi economy off its oil addiction through taking advantage of its other competitive advantages, namely, its extensive relations with Arab and Islamic nations, its investment power and its strategic geographic location. Dubbed Vision 2030, ETP was approved by the cabinet and King Salman.

The centerpiece of the economic reforms in the ETP is the restructuring of the Public Investment Fund (PIF), whose holdings of $160bn would be converted into the world’s largest Sovereign Wealth Fund with $2trn investment assets under management. That would be accomplished first through the transfer of assets held by Aramco, the state-owned integrated oil company, into the restructured PIF. Then, less than 5% of Aramco, which holds around 15% of the world’s estimated crude oil reserves, is to be privatised through an initial public offering, along with listing its oil and gas subsidiaries on the Saudi stock exchange. Investment income derived from PIF would be directed towards financing the state budget.

ETP is also counting on diversifying the Saudi economy through taking advantage of the growing religious tourism market. It plans to expand the kingdom’s tourism infrastructure capacity to be able to accommodate 15mn tourists per year in 2020, rising to 30mn by 2030.

In addition, the prince made the upcoming construction of the King Salman bridge between Egypt’s Sinai and Saudi Arabia a cornerstone of ETP, offering the chance to take advantage of the Kingdom’s strategic location at the crossroads of three continents to facilitate the transit of hundreds of billion of dollars in trade.

According to the prince, who also heads the Council of Economic and Development Affairs, the additional revenues to be derived from the immediate implementation of ETP would be sufficient to cover Saudi Arabia’s budget deficit by 2020, which stood at $98bn in 2015 as a result of the collapse in the global price of oil.

Critically missing from the prince’s policy statement were explicit references to fiscal revenue raising measures such as the widely anticipated implementation of the value-added tax. Nevertheless, he specifically mentioned that the current universal subsidies system would be changed to direct subsidies towards lesser fortunate segments of society.

The kingdom also plans to introduce labour market reforms through streamlining residency procedures for its large expatriate work force. It would introduce a green card system over the next five years, initially for Arab and Muslim expatriates, to introduce greater flexibility into the labour market. It will also encourage greater female participation into the work force.