Saudi Arabia Planning a New Sovereign Fund That will Focus on Diversifying Investments
Saudi Arabia is planning to build a new sovereign fund which will help it manage a part of its oil wealth along with diversifying the country's investments.
The reason behind it is the drop in oil prices for a longer time than expected which is hurting the finances of Saudi Arabia. The state budget of the kingdom has reached a record high deficit and the net foreign assets dipped to greater than $100 billion in the last fifteen months.
Sources say, it has asked for proposals to be submitted by investment banks and consultancies for this project.
According to one of the sources, the Saudi government had sent out a "request for proposal" consultants and banks towards the end of 2015 l asking for ideas, how the new fund can be functionally structured. However, the size of the planned fund is still remains unknown.
Reportedly, it is mainly aimed at focussing on investing in businesses other than the energy industry like transportation, industries, chemicals and maritime ventures. Range of options is still under consideration and no final decision has been taken as yet.
This kind of belt-tightening is something new to the petrodollar-fuelled nation where the per capita income increased triple fold since late 1980s.
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