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Saudi Arabia: The Government's Vision Refocuses on the Present

3 MINS READSep 7, 2017 | 21:34 GMT

According to an internal government document seen by the Financial Times, Saudi Arabia is revising the 2020 National Transformation Plan (NTP), which is part of the broader Saudi Vision 2030 initiative. Officials preparing the revisions are scheduled to present the final draft of the new NTP — internally being referred to as NTP 2.0 — by the end of October. NTP 2.0 will modify some existing initiatives and add new ones. Part of NTP 2.0 will focus on reforming the government bureaucracy and increasing government transparency. Some goals — such as financial sector and privatization reforms — will get a second look and further consideration on how to adjust them to take into account the current state of the Saudi economy.

Changes to the NTP were largely inevitable, given that many of its reforms were overly ambitious and difficult to attain. Saudi Arabia's non-oil revenue declined by 17 percent and the government failed to hit its non-oil revenue target for the first half of 2017. There have also been frequent delays to new iterations of the Saudization labor plan, which reflects the enormous challenge of employing Saudi Arabia's burgeoning youth population. It's not clear whether the Saudi Aramco initial public offering will also be redrafted, since it's not officially a part of the NTP program.

While the NTP 2.0 is in development, other initiatives that demonstrate responsiveness to the needs of the Saudi economy continue to move forward. The newest phase of the Kingdom's labor nationalization program (called "nitaqat" or "levels") is being implemented this week for companies with five employees or more. While this system has been around for several years, its latest phase has created even more levels, which aim to make it slightly easier for smaller companies to qualify for benefits and avoid penalties if they are employing larger numbers of Saudi nationals. The fact that the nitaqat program was changed at all seems to reflect that small business owners have successfully lobbied the Ministry of Labor to adjust the scheme. It's just one example of political and economic realities colliding with the NTP and Vision 2030. 

Adjusting the NTP adds yet another component to Riyadh's enduring efforts to address multiple challenges on the home front. It will also be important to watch whether these efforts damage Crown Prince Mohammed bin Salman's credibility and popularity in the years to come. Some of his other signature initiatives — such as the intervention in Yemen — are already unpopular among parts of Saudi society. Still, they are all part of the government's evolving policies to change the way things have traditionally been done in Saudi Arabia.

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