Saudi Deputy Crown Prince Mohammed Bin Salman’s interview broadcast on Al Arabiya TV in parallel with Saudi TV, read the full transcript below:
Q: Will the fund help galvanize the housing sector?
The Real Estate Development Fund is certainly one of the major factors influencing the development of the housing sector. There are three types of housing- there is free housing and these are hundreds of thousands and I cannot provide a final number. Then there is housing supported by the Real Estate Development Fund and housing that’s supported through the major investor which is the government that facilitates it for Saudi citizens to buy houses for reduced prices. This is a very long-term loan as its profit to the fund does not exceed 3 percent. Citizens can own the house on the second day and pay for years without affecting his major income. This is in addition to free units with the biggest size possible and we will give these to citizens who cannot cover the costs of the housing programs.
Q: When do you expect the program to be launched?
It should be within six months. I do not think it is going to be one of the first programs to be launched because it is very complicated and involves high expenditure. I expect it to be launched in the third quarter of 2017.
Q: Your Highness, some economists fear for Aramco and think it’s state-owned and must not be listed for an IPO. What do you think?
I think this tends to be close to the socialist communist approach where everything is owned by the state, even a bakery must be owned by the state. According to the documents based on which Aramco was established in the era of King Abdulaziz – may he rest in peace – there were plans to sell shares at the time. Today, you have a company with a very high value. You can keep this company in Saudi Arabia and keep its influence in Saudi Arabia and make it develop in Saudi Arabia while benefitting from its value by motivating other sectors that are not in Saudi Arabia. The amount of money we will make through Aramco will help us seize many opportunities, like we said at the beginning of the interview. If Aramco is not put for IPO, it means it will take us 40-50 years to develop the mining sector. It will take us 40 years until we develop the local product and it will take us long years to develop logistical services just like we wasted 40 years in the past while trying to develop these sectors. When we offer part of Aramco’s stock and take this cash money and establish new and strong sectors in Saudi Arabia, economy will develop, jobs will be available and the revenues of the government and the fund will improve. This is in addition to other benefits. All this will happen while Aramco is still in Saudi Arabia.
Q: What will be its value and the percentage?
There are two major factors to specify the percentage of offering.
Q: What will we sell? The service or the wells or what?
We’re selling the value of the company. The wells are owned by the government. Only the company has the right to benefit from these wells. This was the case in the past and it’s the case today and nothing has changed. The size of the share, which will be sold, is linked to two factors. The first one is demand. Is there demand or not? The second one is what do we have on the pipeline, like investments inside or outside Saudi Arabia. There was demand. However, cash is what we need because we don’t have a sector to invest in in Saudi Arabia or contain this investment so why sell an Aramco share. However if there is demand and there is a sector that needs this amount to invest in the day after, then we will immediately sell. These two factors are what specify how much we will sell from Aramco but it’s certainly won’t be far off 5 percent.
Q: When will Aramco shares be sold?
Q: Are you working now on paperwork and authorizations?
Q: If Aramco shares are sold who will specify the production ceiling of Aramco?
The Saudi government will do that. It will specify the production ceiling. It is in the Saudi government’s interest to increase production according to the price that suits the company. Part of the government’s returns is the tax on the oil (50 percent) that’s sold or produced. There are also taxes it takes from Aramco. The government’s interest is to increase Aramco’s profit. This means that the government will not take a decision that goes against its interests or with Aramco’s interests regarding the production rate.
Q: Your Highness, considering the vision and the economic situation, will production be liberated from political decisions?
Production is not a political decision. Production is an economic decision. It has never been a political decision in the past. To specify a suitable production price is an economic interest. This is governed by supply and demand and coordination with OPEC countries and non-OPEC countries in order to coordinate the quantity of supply and demand so there is no collapse or confusion in oil prices.
Q: One of the programs launched last Sunday was the investment project to motivate 100 companies so they become regional or international. What kind of companies will be upgraded?
I cannot name companies now. Some companies are in the stock market and others are not. We seek more than 100 companies that have a chance to transform from a local company to a pioneering regional company and we also seek companies that have the chance to transform from a pioneering regional company to a pioneering global company. There is a group of companies that can achieve such a transformation. This will have great influence and it will be reflected on the Saudi economy. This requires easy procedures, facilitations and agreements with other countries to facilitate their sale and their expansion.
Q: Will the government negotiate on behalf of companies and look after their interests?
Certainly. We noticed that all governments in the world do that. We have seen this most recently. Few days ago, the German chancellor was here and the most prominent company directors in Germany were here. She negotiated as if the companies are owned by the German government. She was engaged in all details to help these companies succeed. The Saudi government must perform its role to help Saudi national companies succeed. This will turn 100 Saudi companies from pioneering local companies to regional and from pioneering regional companies to global. We will thus have the experience in how to transform these companies into huge companies as after 2020 we will do programs that target a wider range of these companies.
Q: Does this mean that the government may extend loan to them?
This is possible and will depend on what will be announced in the program.
Q: The private sector is now complaining about rising operating costs and thinks this will harm the industry and commerce. What do you think of this and of the increase in prices and the shrinking economic condition?
I do not think this is accurate but programs which will be executed will strongly motivate the work of the private sector and will strongly increase sales to the private sector. If hundreds of billions are spent in a short period of time this will certainly positively influence the private sector. I will give you an example. In the past, we only depended on the government’s capital expenditure. In the next years, we will have a high government capitalist expenditure. This is one. Two: there will be expenditure from the reserves mentioned in the financial balance program, 200 billion riyals to develop the private sector. This is another expenditure that’s different from the capital expenditure we got used to. Thirdly, and this is important, is the expenditure of the public investment fund. The public investment fund will spend inside Saudi Arabia after Aramco offers over SAR 500 billion in just 3 years. Imagine this expenditure in the military industry or in manufacturing cars or providing entertainment and creating tourism and other industries. Imagine the influence on all of the private sector. This will strongly motivate their sales in all sectors whether in retail or transport or services sector etc.
Q: Will you impose taxes on the companies’ income?
No, this was not mentioned and it was not mentioned in the financial balance program. We mentioned there will be no taxes on incomes.
Q: With regard to companies coming to Saudi Arabia, are efforts being made to attract foreign investments?
Yes. Today, the ministry of commerce is working on screening the work of the investment commission and our work in a different way. We used to wait for companies to make the request but today we seek the companies that we want for them to work in Saudi Arabia. There is a very long list of companies which the investment commission must seek every year and bring into the Saudi market.
Q: Is there someone who wants to enter the market but makes complains about the procedure here?
Easy procedures greatly contribute to the work of these companies. For instance, I’ll tell you a recent incident that happened during the German chancellor’s visit. German companies had a problem that our licenses in Saudi Arabia for only for one year while their strategies and investments are based on four years. In this case, a change is made and the license will last for five years. Easy procedures greatly motivate the work of foreign companies in Saudi Arabia.
Q: On privatizing the healthcare sector, the minister was quoted as saying during a seminar that hospitals will be privatized. Then it was said they will be turned into companies owned by the state. Where do we stand on this?
In successful countries healthcare sector is privatized. If we look at the US for example, the American government does not own hospitals. Each hospital is co-owned by the private sector and the non-profit sector. The government’s role is to guarantee free treatment of Saudi citizens. Instead of operating a hospital and spending on it and having a quality that does not please citizens, we privatize them. Companies will thus own them and we take care of an insurance policy for each citizen. The citizen chooses the hospital where he wants to be treated whether it is owned by the private sector or the non-profit sector. This will create high competition among hospitals owned by the private sector and they will provide good services to attract citizens who have insurance policies and make more profit. This will create a much better healthcare sector that provides the best services with much less corruption because interests are now between stakeholders. This will also reduce the Saudi government’s burden related to management and decrease high costs that the Saudi government incurs on the healthcare sector. This money will be spent in other sectors that need this expenditure.
Q: When will this begin?
It is a very complicated project. We expect things to be clearer during the current year.
Q: What are the other sectors that can be privatized in the near future?
Municipal sectors and transportation, mainly airports, airlines and ports are the major sectors that we target in the current phase.
Q: Your Highness said the number of those who want to perform Umrah and Hajj will increase by preparing the Two Holy Mosques and improving facilities. However Muslims in Pakistan for example or of other countries or Muslims who reside here think that fees will have an effect and turnout will be lower so instead of having a person perform Umrah four times a year, he will perform Umrah once a year.
This is not true, and those who stand behind this propaganda hate Saudi Arabia and hate Saudi interests and are trying to seize any opportunity to make Islamic communities dislike Saudi Arabia. First of all, before this decision, there were fees on Hajj and Umrah visas worth 50 Saudi riyals. The person who comes the first time pays 50 Saudi riyals on Hajj and Umrah visa. Such fees are not only on Hajj and Umrah visas but target all the Saudi government visas and unifies their price. In order to serve pilgrims and people who perform Umrah, the government covered the costs of the first visit that any Muslim does and this visit will be at the expense of the government. If a Muslim wants to perform hajj for the first time, he does not pay for the visa and the Saudi government pays the visa fees. If a Muslim wants to perform Umrah for the first time, the government pays the visa fees. However, regarding the person who comes for a second or third time, first of all, he’s draining the Saudi economy and we’ve served him the first time for free. Second of all, he’s taking the spot of other Muslims who want to come and perform Umrah and Hajj.
Q: A minister was removed due to abuse of power. Is this the outcome of the Corruption Commission?
The Custodian of the Two Holy Mosques King Salman bin Abdulaziz – may God protect him – made changes since the first day he assumed power as he realizes the importance of the Corruption Commission’s work. He was also not satisfied with the role this committee has played. If fighting corruption is not on the top of the agenda it means the fight is not succeeding and attempts being made to do so will not succeed no matter what you do. I reiterate that anyone who is involved in corruption will not be spared, whether he is a minister, a prince or whoever he is. Anyone whom there is enough evidence against him will be held accountable.
Q: Will social media networks contribute to exposing corruption?
Documents regarding corruption must not be taken from social media networks as we do not know who is forging it and who is not and what is real and what is fake and who has a certain agenda and who doesn’t. Any Saudi citizen who has documents that expose corruption or information about corruption can submit them to the relevant authority, mainly to the anti-corruption commission and he must trust the relevant authorities and have confidence they will perform their role.
Q: Your Highness, the war on Houthis in Yemen is going on. Will it go on?
No one wants the war to go on.
Q: What do you think is the future?
There’s no doubt that when the war erupted, Saudi Arabia had no choice. It was something we had to do as the other scenario was much worse. First of all militias that are categorized as terrorist militias and which we have had a negative experience with in 2009 staged a coup against legitimacy. Secondly, these militias posed a threat on international navigation and on all of Yemen’s neighbors. Thirdly, terrorist activity on the other side south of Yemen became strongly active and exploited these militias’ work. If we had waited a little bit, threats would have been more complicated and there would have been threats inside Saudi Arabia and in regional countries and on international borders and crossings. We had no other choice. I think the Saudi armed forced accomplished great achievements. When the operations began, legitimate powers’ control over Yemeni territory was almost 0 percent. Today, legitimate powers control 80 percent or 85 percent of Yemeni lands. There is another coalition in North Saudi Arabia in Iraq and Syria to fight ISIS which controls part of Iraq. The coalition consists of 60 countries that have been led by the US since 2014. This was a year before we formed our alliance and they have not done anything till this day.
Q: As they have regained control over territories in Yemen, why doesn’t the legitimate authority move to Yemen?
The legitimate authority is always moving between Yemen and Saudi Arabia and it was in Aden for a long time. They always avoid having the president and the vice president both present in Yemen in order to decrease the threat of eliminating them. This is how they plan their work.
Q: There are talks about differences between Saudi Arabia and the UAE regarding Al-Islah and their role in the war and the future of Yemen. How accurate is that?
There are many rumors and enemies certainly want to spread as much rumors as possible among allies.
Q: Why are areas that are under the control of Houthis more secure and stable, like Sanaa, compared to areas controlled by the legitimate power, like Taiz and Aden?
I want [to know] your source of information. I completely doubt this.
Q: Some reports said the coalition’s intelligence information is not efficient and it is proved by the fact that Houthis and Saleh still have stock of weapons.
We can eliminate Houthis and Saleh in few days. We can mobilize Saudi ground troops and in only few days we can seize control of all areas and of the 15 percent which Houthis and Ali Abdullah Saleh control but as a result thousands of our troops can fall victims. There will be funerals in all Saudi cities. Yemeni civilians will also fall victims. There will be huge losses. Time is on our side. Being patient is in our interest. We have the supplies and we have the logistics and high morale. The enemy does not have supplies and funds and is impatient. Time is on our side and we will exploit the time to serve our interests. If we do not do so, it means we will have served the enemy.
Q: There have been frequent offers made by Ali Saleh. Isn’t it possible that this is the way to isolate Houthi?
Ali Abdullah Saleh has a huge dispute with Houthis and we know that he is currently under the control of Houthis and under his guardianship. If he is not under the control of the Houthi guardianship, his stance will certainly be completely different. If Ali Abdullah Saleh exits Sanaa to another area, his stance will be completely different compared to his stance today. Today, he may be obliged to adopt many of the stances.
Q: He suggested an initiative when his son came at the beginning of the war and you rejected it?
That’s true. We were trying to execute a political initiative that makes us avoid war and we were open to discussions during that phase on the condition that they do not come near Aden because if they do, it will be very difficult to discuss a political solution when Houthis are expanding in Yemen. Unfortunately, what we hoped for did not happen and we had to engage in the operations.
Q: Your Highness, regarding powers that are affiliated with the legitimate government in Yemen, and not with the rebels, why doesn’t the kingdom open lines of communication with them?
All lines are open whether for powers affiliated with the legitimacy or with powers affiliated with Ali Abdullah Saleh or even if they are affiliated with neither. More are encouraged every day.
Q: Regarding tribes in Yemen, it looks as if they did not adopt neutrality. You met the tribes, how do you see them today?
They were very enthusiastic as they hate the Houthis group a lot and want to get rid of it as quickly as possible so that they can work on projects to develop Yemen.
Q: I will go back to Egypt. Relations with Egypt were excellent then the Egyptian media began to hint that relations are about to be severed. What’s going on?
You mean the Egyptian Muslim Brotherhood media? The media that criticizes Saudi Arabia or Egypt-Saudi relations is the same media that criticizes President Sisi. Egypt-Saudi relations are strong and solid. Relations with deep roots do not get affected in any way whatsoever. In the history between Egypt and Saudi Arabia, the two countries have always stood with each other during all circumstances and during all times and this has not changed. No negative stance has been made by the Egyptian government toward Saudi Arabia. The Saudi government did take a single negative position against the Egyptian government. Egypt was never late to help Saudi Arabia and Saudi Arabia was never late to help Egypt. There is a solid conviction between the leaders of the two countries or rather between people of the two countries. There is no doubt that the enemies of Saudi Arabia and Egypt will try to create rumors one way or another either through Iranian propaganda or Brotherhood propaganda as they want to create a rift in Egypt-Saudi relations. The leadership in both countries do not pay attention to these.
Q: Your Highness mentioned the King Salman Bridge between Egypt and Saudi Arabia. Do you bet on it?
True. After the bridge was approved expert teams began working in offices and not in front of the media. The plans will be announced in detail when the foundation stone is laid. The foundation stone will certainly be laid before 2020.
Q: Islands, have you finalized the issue related to islands?
As for the islands, there was never a problem related to them.
Q: According to Egyptian media reports, this issue is in the courts.
What happened around a year ago was demarcation of maritime borders. Islands are registered in Egypt as Saudi islands are registered as Saudi islands. In international institutions, they are also registered as Saudi islands. What was finalized was demarcating maritime borders. Egypt did not give up an inch of its lands and Saudi Arabia did not up give an inch of its lands. Borders were demarcated for reasons related to economic benefits that may be made after demarcating borders or after King Salman Bridge is built or that may be made through oil supplies, gas supplies, energy supplies or the train or roads, which will target the port to be built in North Sinai and the Gulf’s exports to Europe.
Q: Can we see a direct dialogue with Iran in the future despite what it is doing in the region?
How do you communicate with someone or a regime that’s completely convinced that its system is based on an extremist ideology that relies on texts in its constitution and in Khomeini’s legacy and that stipulates that it must control Muslims in the Islamic world and spread the Twelver Jaafari sect in the Islamic world so Imam Mahdi comes. How do I convince these of anything? What interests are there between me and them? How do I communicate with them? When there’s a problem between me and another state, we begin by solving it. For example, if there’s an economic problem, we communicate and I see what you want and you see what I want and we understand how to address the problem. If, for example, it is a political problem, like the case is with Russia and how we communicate regarding Syria, we discuss what their interests are and what my interests are. How do we communicate on Yemen? We discuss interests. But with Iran, how do we communicate? Their logic is based on the notion that Imam Mahdi will come and that they must prepare the fertile environment for his arrival and they must control the Muslim world. They deprived their own people of development for more than 30 years and put them through starvation. The people have bad infrastructure because the regime only wants to achieve this aim related to Imam Mahdi. The regime will not change its mindset overnight; otherwise, its legitimacy inside Iran will come to an end. The mutual points, which we can agree on with this regime, are almost non-existent. This regime was tested during more than one phase, like during the time of Rafsanjani and everything turned out to be mere charades. The strategy of expansion was adopted after the Khomeini revolution happened. When the world got angry, they brought a peaceful leader and at the time it was Rafsanjani. They did that to gain the trust of the world and our trust. They gained our trust. After that they got to another phase of providing a good environment, an extremist leader was assigned so the expansion resumes. This is what we saw during the reign of Ahmedinejad and we saw how they expanded in Iraq, Syria and other areas. Then they’d assign another leader to maintain the gains and satisfy the rest of the world. Then they’d again assign an extremist leader to resume expansion. This will not happen. This is over. A believer is not bitten from the same hole twice. We were bitten once. We will not be bitten again. We know we are a major target for the Iranian regime. Reaching the Muslims’ qibla is a major aim for the Iranian regime. We will not wait until the battle is in Saudi Arabia but we will work so the battle is there in Iran and not in Saudi Arabia.
Q: What do you think of a solution in Syria?
There is no doubt that the situation in Syria is very complicated. There’s no doubt that former American President Barack Obama wasted many significant opportunities which he could have seized to achieve great change in Syria. Syria has today become an international conflict. Russia is present there as a superpower. A superpower like the US is present. All five superpowers are present there and any friction between these superpowers may create a crisis that’s much bigger than the Middle East crisis. The situation is very complicated. Today, we are trying to come out with the biggest amount of gains in the interest of Saudi Arabia and the interests of the Syrian people and the region’s countries.