A report in Bloomberg today said that Saudi Arabia is considering canceling more than $20 billion of projects in addition to making deep cuts to ministry budgets as the Kingdom takes austerity measures due to low oil prices.
The budget cuts to some ministries could be as much as 25%, the Bloomberg report said. Overall, the government is reviewing thousands of projects valued at about 260 billion riyals ($69 billion) and may cancel up to a third of them.
Another plan, also revealed in the Bloomberg article from anonymous sources, includes “merging some government ministries and eliminating others.”
The Bloomberg report cited people that asked not to be identified as the discussions are private.
The National Transformation Program is part of Vision 2030.
The report did not elaborate on which ministries might be merged or eliminated, but such steps would only be the latest effort by Saudi Arabia’s rulers to make significant changes to the government under the leadership of HRH King Salman and Deputy Crown Prince Mohammed bin Salman, who is also in charge of the powerful Council on Economic and Development Affairs (CEDA) and Minister of Defense.
In June, Saudi Arabia released its National Transformation Program (NTP), a comprehensive document that provides details and goals for the Kingdom’s efforts to move its economy towards greater productivity and away from dependence on oil revenues. The National Transformation Program is one of the executive programs supporting Vision 2030, and “increases the readiness of participating government entities to undertake their responsibilities through setting up clear phased objectives and 2020 target levels in accordance with the Vision’s objectives and targets.”
The NTP’s publication came two months after the launch of Saudi Arabia’s Vision 2030, a grand strategy for diversifying the Saudi economy as well as staking out significant social goals.
