Published — Friday 8 January 2016
JEDDAH: Saudi Arabia does not plan to start a war with Iran because it would be “catastrophic” for the region, according to Deputy Crown Prince Mohammed bin Salman.
In a wide-ranging interview with The Economist magazine published on Thursday, he said: “It is something that we do not foresee at all, and whoever is pushing toward that is somebody who is not in their right mind. Because a war between Saudi Arabia and Iran is the beginning of a major catastrophe in the region. … For sure we will not allow any such thing.”
The deputy crown prince defended the Kingdom’s execution of a terrorist from the Shiite community in the interview. “The court did not, at all, make any distinction between whether or not a person is Shiite or Sunni. They are reviewing a crime, and a procedure, and a trial, and a sentence and carrying out the sentence.”
He also spoke about the Kingdom’s plans to diversify the economy, with the possibility of selling shares in Saudi Aramco. “This is something that is being reviewed, and we believe a decision will be made over the next few months. Personally I’m enthusiastic about this step. I believe it is in the interest of the Saudi market, and it is in the interest of Aramco, and it is for the interest of more transparency, and to counter corruption, if any, that may be circling around Aramco.”
On when does he expect the Yemeni operation to finish, he said: “Nobody can predict that in a war, not from the greatest of generals to the smallest of generals. We could see Daesh today and nobody could predict when they’re going to be defeated. But what I could say was ten months ago half of Aden was not in control of government, and now over 80 percent of Yemeni lands are under the control of the legitimate government. And I want to emphasize that the world today has uncovered the games played by the Houthis, especially the games that they’ve been using regarding humanitarian aid.”
To a question about the low rate of women in the workforce, he said: “In Saudi Arabia; the woman is not used to working. She needs more time to accustom herself to the idea of work. A large percentage of Saudi women are used to the fact of staying at home. They’re not used to being working women. It just takes time.”
In response to a question about the economy, for which he is also responsible as head of the newly formed Council of Economic and Development Affairs, he said the country was not facing an economic crisis.
“We’re too far from it. We are further than the 1980s and the 1990s. We have the third-largest reserve in the world. We were able to increase our non-oil revenues this year alone by 29 percent. We were able to come out with more positive things than what most people thought about the economy of Saudi Arabia, regarding deficit and regarding spending.”
“And we have clear programs over the next five years. We announced some of them, and the rest we will announce in the near future. In addition to this, my debt-to-GDP is only 5 percent. So I have all points of strength, and I have the opportunities to increase our non-oil revenues in many sectors, and I have a global economic network.”
He said there would be several measures introduced to increase non-oil revenues. “There are going to be no income taxes, and no wealth taxes. We’re talking about taxes or fees that are supported by the citizen, including VAT and the sin tax. They will create good revenues, but not the only revenues.”
“We have many opportunities in mining, we have more than 6 percent of world reserves of uranium, we have many unutilized assets. We have four million square meters in Makkah alone of unutilized state-owned lands. The value in the market is very high; we have many assets that could be transformed into investment assets. We believe we could reach a point of non-oil revenues reaching $100 billion over the next five years.”
He said there is a plan to introduce VAT by the end of 2016 or 2017, and privatize health care, education, some military sectors and some state-owned companies. “It will decrease some of the pressure that the government has, and some of them may create good profit.”
On whether Saudi Arabia will prevent the hiring of foreigners, the deputy crown prince said: “We’re trying to resort to creating jobs, if we cannot cover all, then we’re forced to exert pressure on the private sector, like what was done, the Saudization program.”
The deputy crown prince said Saudi Arabia’s low debt and huge array of assets meant it could cope easily with financial pressures. He said the government planned to provide state-owned funds with assets worth $400 billion in the next few years.
The funds will generate profits from unused assets, turning them into companies that will eventually go public, Salman said, citing as one example 5 million square meters of land on the coast in central Jeddah that are currently owned by the air defense system.
On Arab Spring, he said: “First of all I can say that the Arab Spring was the real test that put to the test the authoritative form of government and non-authoritative form of government, and the regime that represents its people versus the regime that does not represent its people. Any regime that did not represent its people collapsed in the Arab Spring, and the other regimes we saw what happened to them.”