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KSA takes precautionary measures to avoid falling oil prices

KSA takes precautionary measures to avoid falling oil prices
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By Mohammed Abu Meleeh

Riyadh-Mubasher: Saudi Arabia took some precautionary measures to avoid impact of falling oil prices, which is considered a 'quality step' to diversify income resources.

The kingdom focused on developing the policies and procedures of preparing budgets, boosting the capital spending efficiency, lowering the current expenditures and improving the government purchase and competition system.

Mazen Al-Sudairi, head of research department at Alistithmar Capital, said the steps taken by the government are considered a quality development in the budget amid volatile oil prices.

He told Mubasher that the kingdom used to relay on the minimum level of expenditures, but it relied this year on the maximum level as it booked SAR 183 billion in provisions to overcome the potential decline in revenues.

The kingdom should focus currently on the private sector to boost liquidity in this sector especially after the rise in the prices of feedstocks and inputs, Al-Sudairi said.

He added that the government should remove the legal obstacles facing foreign investments, in addition to seeking to establish giant companies in all fields like SABIC and Aramco.

Barjas Albarjas, a former consultant at state oil firm Saudi Aramco, said business sustainability and strategies are main considerations for the diversification of the state's income resources.

"We should invest in researches, developments, innovations and studies to avoid reliance on oil," he added.

Translated by Abdul Maguid Aboshahla