Published: April 1, 2016
“Saudi Arabia is getting ready for the twilight of the oil age by creating the world’s largest sovereign wealth fund for the kingdom’s most prized assets.
Over a five-hour conversation, Deputy Crown Prince Mohammed bin Salman laid out his vision for the Public Investment Fund, which will eventually control more than $2 trillion and help wean the kingdom off oil. As part of that strategy, the prince said Saudi will sell shares in Aramco’s parent company and transform the oil giant into an industrial conglomerate. The initial public offering could happen as soon as next year, with the country currently planning to sell less than 5 percent.” (Bloomberg.com)
Aramco’s sale is planned for 2018. The mega Public Investment Fund will have major investments at home and abroad. The fund will be big enough to buy over Apple Inc., Google parent Alphabet Inc., Microsoft Corp. and Berkshire Hathaway Inc. — the world’s four largest publicly traded companies.
Prince Salman is overlooking a major cultural and economic shock for his country residents. An economy and population that has been used to handouts from the government for decades is ill prepared for a massive change. In order to wean of the economy and population from government support, Prince Salman needs a step by step, gradual, over the years change policy. That would include massive investment in education and training in non-oil sectors.