Saudi: Expert says oil a key component in economy
The Kingdom's 2016 budget "represents an opportunity for significant change" in the country, a vice president at Hill International told Construction Week
As Saudi Arabia works to balance its spending, revenues, and socio-economic policies, a legal expert said that oil prices cannot be separated from the equation.
Haroon Niazi, vice president and country manager at Hill International Saudi Arabia, told told Construction Week that Saudi's overhauled 2016 budget, which includes subsidy cuts and taxation, "represents an opportunity for significant change in the Kingdom".
"The prospects of change may be daunting for some, but for others it brings with it opportunities, particularly for those who are able embrace change and implement alternative operational strategies in order to realise valuable benefits," he said.
"The cost cutting measures which have been implemented in the 2016 budget are essential to enable the Kingdom to continue with diversification and assist it in moving away from a commodity based economy.
"In reality, the price of oil will always underpin and be an important component of the economy in Saudi Arabia," Niazi added.
The legal expert also praised Saudi Arabia's investment in the development of infrastructure to support manufacturing and diversified energy sources.
"Looking at the construction industry, it is important to acknowledge the fact that over the last few years the Kingdom has made huge strides in various other sectors, including chemical process plants, construction of mining facilities, and the development of renewable energy facilities.
"By investing in various market sectors, we are likely to see the continued development of an enhanced, diversified and sustainable economy for the Kingdom.
"The positives can already been seen when analysing the 2015 results where oil revenue represented approximately 73% of total revenue. In previous years this figure has ranged between 80%-90%," Niazi added.
As per Saudi's 2016 budget, state spending for the year has been pegged at $223.9bn (SAR840bn), down from the $259.9bn (SAR975bn) actually spent in 2015.
The budget also suggests the country is not relying on a major recovery in oil prices this year.
Revenues for 2016 are forecasted at $137.1bn (SAR514bn), down from $162.1bn (SAR608bn) in 2015.