KUWAIT, Nov 16: Saudi Arabia’s planned sale of stakes in big public firms will reduce its debt burden and the country is likely to have a lower-than-expected budget deficit in 2002, its finance minister was quoted as saying.
Saturday’s edition of the Kuwaiti Al-Seyassah daily quoted Finance and Economy Minister Ibrahim al-Assaf as saying the 2002 deficit would be below $12 billion.
The revenues from privatisation and selling state-owned shares in some firms will help reduce public debt, al-Assaf was quoted as saying in an interview last week. The amount of revenues will depend on the timing of the sales.
Saudi Arabia announced last week it planned to sell stakes in several large firms to kick-start its privatization scheme.
The cabinet ratified plans to sell stakes in joint stock firms including industrial giant Saudi Basic Industries Corp (SABIC) and the kingdom’s sole telecoms provider, Saudi Telecommunication Company (STC).
The government has a 70 per cent stake in SABIC, and owns all of STC, which plans to float 30 per cent of its shares to Saudi investors before the end of the year.
The privatization list also includes roads and railway, water desalination, aviation, ports and airports services, hotels and medical services.
The newspaper quoted al-Assaf as saying Saudi Arabia’s 2002 budget deficit would be less than earlier expectations of 46 billion riyals.
There are still two months before the end of the year, and I anticipate the deficit will be lower, he said.
Saudi Arabia, which has a huge internal debt despite being the world’s largest oil exporter, is trying to privatize some state-owned services as part of economic reforms.
Al-Assaf said its internal debt was more than 600 billion riyals while gross domestic product was around 700 billion riyals.
The conservative kingdom does not publish official data on unemployment.
Independent economists put the jobless rate at around 25 per cent but al-Assaf said it was below 10 per cent.
Unemployment is below 10 per cent, not 14 to 15 per cent as widely reported, he was quoted as saying. However we don’t have very accurate statistics.
He said unemployment was partly a result of Saudi citizens being unwilling to do certain jobs.
The country has been trying to encourage its citizens to do jobs previously filled mostly by foreigners, like taxi-driving and working in the retail sector.
With more than half the population under the age of 20, and the job market unable to absorb thousands of graduates each year, the government faces a time bomb that could destabilise society, according to some analysts.—Reuters