Beyond Saudi Aramco’s stalled IPO | Financial Times

Beyond Saudi Aramco’s stalled IPO | Financial Times:

The indefinite postponement of plans to sell a minority stake in the Saudi state oil company Aramco opens the question of how the country will now manage its finances and its plans for economic diversification.

The sale, intended to raise at least $100bn for a 5 per cent stake in the company, was designed to provide the core funding for the diversification that is needed to generate much-needed jobs and over time enable Saudi Arabia to eliminate its dependence on oil. The concept goes back to a study produced by McKinsey, the international management consultants, in 2014. It was launched under the banner of Vision 2030 by Crown Prince Mohammed bin Salman in 2016.

Directionally, the thinking was right: Saudi Arabia needs to diversify and to find new sources of revenue. The problem is that there was no delivery mechanism to turn the grand vision into practical reality. Now there is no money.