Business

AMMAN — The Amman Chamber of Commerce (ACC) has urged official authorities to suspend personal exemption given to products bought through the Internet claiming damage to trading companies.

The goods bought over the Internet are delivered to clients without taking into consideration the customs fees or the sales tax, under the pretext of personal exemption, ACC President Issa Murad said in a statement, adding that most of the goods are counterfeit, not allowed in the Kingdom, in addition to not meeting Jordanian standards.

The chamber explained the negative impact from such exemptions to official institutions  because they inflict damage on traders and sponsors of international trademarks committed to set standards.

The Customs Department, in reply to the ACC's official request, said the implementation of the exemptions is affiliated with personal needs and within the deserved value. The department added that the exemption of mail packages from customs fees, sales tax and other taxes applies only to goods of personal use whether foodstuffs, children's toys, shoes or clothes, on the condition that the customs value for the package being no more than JD100. Traders incur multitude of costs whereas many Jordanians view pages on social media websites offering many products. 

ISTANBUL — Turkish conglomerates are racing to add high-end apartment blocks and office towers to Istanbul's rapidly changing skyline, turning to one of the world's most profitable real estate markets for quick returns as other parts of the economy suffer.

Anadolu Holding, which has interests in banking, retail and brewing, plans to venture into real estate with two developments in Istanbul this year, while Aksoy Holding, an energy-to-tourism conglomerate, is building a luxury residential complex on the Aegean coast and plans another project in Istanbul.

Construction lies close to heart of President Recep Tayyip Erdogan, who sees big real estate projects, both public and private sector, as a showcase for Turkey's rising prosperity, as well as a vehicle for job creation and winning loyalty at the ballot box by increasing the supply of new housing.

But some economists warn that such investments risk fuelling volatile consumption-led growth and undermining government efforts to put Turkey's economy on a more sustainable path.

They say they fail to address an under-investment in manufacturing technology that could erode the global competitiveness of Turkish industrial products and exports.

"Investments in construction create a doping impact in the economy in the short run but these are not quality investments boosting productivity," said Haluk Burumcekci, an economist who runs the Istanbul-based Burumcekci Consulting.

"And in the long run such investments do not help a sustainable growth model," he added.

The government says it is committed to ensuring sustainable growth. It has pledged reforms to boost labour productivity and household savings, and make Turkey one of the world's top-10 economies by 2023. Output grew by a stronger-than-expected 4 per cent last year, but it was largely consumption-led growth.

Turkish house prices have jumped 70 per cent since 2010, according to Turkey's Association of Real Estate and Real Estate Investment Companies (GYODER). Turkey topped global rankings with price rises of 18 per cent last year alone, according to the Knight Frank Global House Index.

Strong population growth and demand from investors elsewhere in the Middle East, who see Turkey as a relative safe haven in the region, are fuelling the construction boom, despite persistent worries among some investors about a housing bubble.

Demand for new homes stands at least half a million a year, almost doubling with the need for renovating existing houses, industry executives say. They estimate more than a third of Turkey's 20 million residential buildings need refurbishment, many to meet tighter earthquake regulations.

"The potential is still there," indicated Omer Faruk Celik, head of the Real Estate Developers and Investors Association. "Even though profitability is not very high in construction, the shorter return period on investment makes it more attractive than other areas of industry." 

New projects

Anadolu Holding, best known for its beer maker Anadolu Efes, said its foray into construction was driven by a need to create cash flow and by the ease with which it could find foreign financing for such projects.

Anadolu Efes has suffered in Turkey from rising taxes and regulation on alcohol, and in Russia, one of its biggest markets, from a diplomatic and trade row since Turkey shot down a Russian warplane near the Syrian border last year. It reported losses of 512 million lira ($180 million) and 198 million lira in 2014 and 2015 respectively.

Its parent firm will invest up to 850 million lira ($300 million) for its first real estate project in Istanbul and plans to launch another by the end of the year, Ali Baki Usta, the general manager of AND Gayrimenkul, its real estate arm, told Reuters.

Aksoy Holding, meanwhile, has been hit by losses at its fuel retailer Turcas Petrol in 2014 and 2015, mainly due to heavier regulation. Its tourism business, which includes luxury hotels, has also suffered as Turkey's deteriorating security situation deters foreign visitors.

"We wanted to diversify our portfolio, and real estate still offers potential for growth," the group's Chief Executive Batu Aksoy said. It will invest $200 million in an upscale real estate project in the Aegean resort of Bodrum and plans another in Istanbul.

Fellow conglomerate Kosifler Group, which distributes luxury vehicles including Jaguar and Land Rover in Turkey and has also built hotels, is planning residential and office developments in two upmarket districts of Istanbul.

"The return on investment in tourism takes too long. We won't invest in hotels anymore and will launch new projects in construction," said board member Selim Kosif.

'Competition fierce'

If Turkey is to escape a middle-income trap, in which rising wages erode competitiveness and it struggles to increase the value of its industrial products and exports, it needs to boost its savings rate, raise productivity and reform areas, including its education system and labour market, economists say.

The construction boom may inflate growth rates in the short term, but will not address those structural issues, they say.

A desire for rapid economic growth has led to Erdogan's repeated calls for lower interest rates despite Turkey's high inflation.

"The push for lower interest rates may be related to trying to increase the contribution of the construction sector to growth," said Muammer Komurcuoglu, an economist at Istanbul brokerage Is Investment. "But growth through consumption is one-off."

The share of manufacturing in the country's $720 billion economic output fell to 23 per cent last year from a peak of 35 per cent in 2010, when the economy grew 9.2 per cent. The contribution to growth from the private sector has, meanwhile, been negligible since 2012, while domestic consumption has become the main driver.

Some in the construction industry also warn that companies pushing into the sector may find quick returns difficult to come by.

"Competition is fierce," indicated Haluk Sur, executive member of the Real Estate Investment Trusts Association, pointing out that profit margins had halved to around 10 per cent over about the last five years.

"Those who hope for easy money in construction may be disappointed," he said.

Mohammad Hourani

AMMAN — It is time for privatisation of Arab stock exchanges and cross-borders trading that will help exchanges grow at current difficult regional conditions, financial markets experts said Wednesday.

Around 70 per cent of the exchanges across the world are currently privatised and for-profit and this is the trend. Therefore, it is the time for Arab exchanges to move forward towards privatisation, Marwan Batayneh, chairman of the board of directors of the Amman Stock Exchange, said at the opening of the Arab Federation of Exchanges Annual Conference 2016 in Amman.

"Moving ahead towards privatisation should be done in line with well-studied and regulated manner," added Batayneh at the conference, which attracted industry representatives from several countries across the world.

In a speech delivered on behalf of Prime Minister Abdullah Ensour, Jordan Securities Commission Chief Commissioner Mohammad Hourani said maximum levels of cooperation between exchanges are needed at this stage to overcome challenges.

Stressing that exchanges play a key role in boosting economic growth, Hourani added that financial media also needs to play a constructive not a destructive role, which helps ensure transparency and objectivity.

There are 16 exchanges in the Arab world with variations in sizes of each one, he continued, stressing that electronic linkage of these exchanges is a necessity and will help boost investment and trading.

In a session at the event, Bart Chilton, senior policy advisor at DLA Piper LLP (US), stressed the importance of adopting financial technologies in exchanges, which he said plays an important role in advancing them.

This, however, should be done in tandem with the regulators, he added, noting that financial technologies are going to be disruptive.

Several topics on challenges facing exchanges in the region and globally, as well latest solutions and trends are going to be discussed during the two-day event.

AMMAN — Royal Jordanian (RJ) announced Sunday in a press statement that losses dropped by JD1 million to JD7.3 million in the first quarter (Q1) of 2016 from JD8.3 million in Q1 of 2015.  “The results improved by 13 per cent despite the unfair competition the company faces,” the company said in the statement.

“The drop in losses happened even though Q1 of 2016 revenues also went down 5 per cent to JD140.4 million from JD148.4 million in the first three months of 2015.”  The lower revenues were attributed to the reduced tickets prices resulting from lower oil prices. RJ reiterated that air traffic is seasonal in nature.

“Normally airlines, RJ included, see a remarkable regression in the number of travellers in the first and last quarters of the year [the winter season], whereas they witness active traffic in the second quarter and reaching the peak season in the third quarter, during the summer and holidays, which means improved seat factor,” it said. Improved seat factor enables airlines to achieve better financial results at the end of the year, as was the case with RJ last year.

AMMAN — Industry, Trade and Supply Minister Maha Ali on Tuesday inaugurated the Jordanian-Czech business forum, organised by the Jordan Chamber of Commerce (JCC) in cooperation with the Czech embassy in Amman. 

Ali indicated that the Kingdom's import from the Czech Republic in 2014 and 2015 reached $34 million, whereas Jordanian exports to the European country in the same period did not exceed $100,000.

Noting that commercial and investment exchange between the two countries does not reflect the good bilateral political relations, she highlighted Jordan as an investment and tourist destination and a business hub in the region, especially that it provides an advanced business environment, modern infrastructure, qualified human resources and efficient communication network, in addition to special economic zones that are equipped with infrastructure and logistics. 

The minister also said that Jordan has signed trade agreements with many countries, such as the US, Canada, Turkey, Singapore, the EU and Arab countries, that enable the Kingdom to penetrate markets with more than 1 billion consumers.

She added that Jordan's gross domestic product increased from $8.5 billion in 2000 to some $37 billion in 2015, while the national exports went up by fivefold between 2000 and 2015.

Czech Industry and Trade Minister Jan Mládek noted that political relations between Jordan and the Czech Republic date back to the mid-1960s, describing Jordan as among the most important partners in the region due to the security and stability it enjoys in a turbulent region.

He said his country is looking forward to reaching developed economic ties with the Kingdom and increasing the commercial exchange volume.

Mládek also referred to an agreement between both countries on generating nuclear energy, expressing his country's readiness to provide Jordan with all its technical expertise in this field.

JCC President Nael Kabariti called on Czech businesspeople to take advantage of Jordanian investment environment, which is based on modern laws.

On the sidelines of the forum, Ali and Mládek held a meeting and discussed necessary steps to enhance economic cooperation through signing bilateral agreements and stimulating both countries' private sectors, highlighting the need to intensify commercial visits and holding joint conferences. 

AMMAN — The Jordan Exporters Association (JEA) recently arranged the participation of local food companies in SIAL Canada food exhibition hosted in Montreal last week, JEA President Halim Abu Rahmeh said Tuesday.

Nine Jordanian food companies took part in the event which is expected to open new export markets for local products, Abu Rahmeh noted. Department of Statistics' figures show that Jordanian exports to Canada in 2015 reached JD38.3 million, compared to JD36.4 million worth of Canadian exports to the Kingdom in the same year.

The JEA president also highlighted the importance of the Canadian market for the Jordanian food sector, due to the big Arab community it houses and its being a gateway for local products to enter the US market. He also noted that the association is preparing for other participations in Russian, French and Emirati exhibitions.

ABU DHABI/HASAKA, Syria — Syria's war has destroyed agricultural infrastructure and fractured the state system that provides farmers with seeds and buys their crops, deepening a humanitarian crisis in a country struggling to produce enough grain to feed its people.

The country's shortage of its main staple wheat is worsening. The area of land sown with the cereal, used to make bread, and with barley has fallen again this year, the UN Food and Agriculture Organisation (FAO) told Reuters.

The northeast province of Hasaka, which accounts for almost half the country's wheat production has seen heavy fighting between the Kurdish YPG militia, backed by the US-led air strikes, and Daesh militants.

Farming infrastructure, including irrigation canals and grain depots, has been destroyed, according to the FAO. It said the storage facilities of the state seeds body across the country had also been damaged, so it had distributed just a 10th of the 450,000 tonnes of seeds that farmers needed to cultivate their land this season.

Farmers are also struggling to get their produce to market so it can be sold and distributed to the population.

The conflict has led to the number of state collection centres falling to 22 in 2015, from 31 the year before and about 140 before civil war broke out between government forces and rebels five years ago, according to the General Organisation for Cereal Processing and Trade (Hoboob), the state agency that runs them. Many of those lost have been damaged or destroyed.

The breakdown of the agricultural system means Syria could struggle to feed itself for many years after any end to the fighting, and need a significant level of international aid, FAO said.

It has had a major impact on plantings; the area of land sown with wheat and barley for the 2015-2016 season stood at 2.16 million hectares, down from 2.38 million hectares the previous season and 3.125 million in 2010 before the war, and only around two-thirds of the area targeted by the government, it indicated.

The UN organisation added that its planting information came from the Syrian government. The government itself has not made public the figures for 2015/16 plantings.

The agriculture ministry could not be reached for comment. A government source told Reuters that information on the 2015/16 crop area was still not ready for publication.

"What concerns us is not the fluctuations from one year to the other, it is the worrying overall downward trend," said Eriko Hibi, the FAO's main representative for Syria.

Depending on rain

The worsening wheat shortage is another hammer blow to a country where the population numbered around 22 million before the civil war but more than 250,000 have been killed in the fighting and millions have become refugees.

Last year, farmers sold just over 450,000 tonnes of wheat, a fraction of the 1-1.5 million tonnes that is needed to provide enough bread to government-held areas of the country alone, government sources and traders said.

Before the conflict, by contrast, Syria could produce 4 million tonnes of wheat in a good year, with around 2.5 million tonnes going to the state and the surplus exported.

The United Nations said in January that some Syrians were starving in besieged areas under the control of rebel forces or Daesh, which it said were home to at least 400,000 people.

Faisal Hejji, a farmer in Ras Al Ain in Hasaka, said he had devoted 200 dunums of land to wheat this season, down from 300 dunums before the conflict.

"War has made us lose a lot of the necessary inputs we need and when we do find them they are pricey," Hejji added. "We used to support one dunum of wheat with 50 kilogrammes of fertiliser but now this is missing."

"Also, we are now depending more on rain rather than other irrigation methods," he continued.

No security

His plight is typical of farmers across the country, according to the FAO, which estimated last year that Syria's wheat deficit for 2015 stood at around 800,000 tonnes. That deficit could widen every year should farmers continue to lack access to agricultural inputs and markets, it said.

"Many farmers don't want to be displaced or give up their land, they want to stay as long as they can and in order to do that they have to be able to produce their food and make ends meet," Hibi said.

She added that it was still too early to tell what this year's wheat crop would be, as it depended on the weather. "So far it has been a bit drier but that may change," she said.

Syrian farmers benefited from the best rainfall in a decade last year and harvested around 2.4 million tonnes of wheat, significantly better than the drought-stricken year before but still around 40 per cent lower than the pre-war average.

Hejji's land is located in a part of Syria where Kurdish groups declared their own government two years ago known as the self-administration. Yet he still sells his wheat to the state-run Hoboob, which he says is the only group capable of buying it at suitable prices.

"I go to the Hoboob agency in Hasaka or Qamishli to sell my wheat and I store small quantities for me and my family. Some farmers sell their wheat to middlemen but these traders also sell them ultimately to Hoboob," he said.

It is difficult to transfer wheat and other food from one province to another because of lack of security, Hibi added. "I've seen a lot of fresh fruit wasted in some areas where just nearby people haven't seen fresh fruit for years."

SEOUL — South Korea vowed Tuesday to restructure the country's once formidable shipbuilding and shipping sectors, now crippled by mismanagement, slowing global demand and competition from Chinese rivals. 

Shipbuilders, including Hyundai Heavy Industries and Daewoo Shipbuilding and Marine, have racked up massive losses after slumping oil prices sapped demand for tankers and offshore drillers.

The "Big Three" firms dominated the world's shipbuilding market during the 1990s and 2000s and although they had combined sales of more than 68 trillion won ($59 billion) last year, an extended export slump, regional rivalry and overcapacity have taken their toll.

Daewoo, the world's second-largest shipbuilder, posted a record net loss of 5.5 trillion won last year.

Hanjin Shipping, the South's top container carrier, applied for a creditor-debt restructuring plan on Monday to avoid bankruptcy after reporting mounting losses stemming from slowing demand in China. 

Its smaller industry peer, Hyundai Merchant Marine, has also been bleeding cash for years, with both firms criticised for paying inflated charter fees to shipowners.  

As shipbuilding and shipping firms seek government aid or extensions on their debts, Seoul's regulatory body said it would press them to sell more assets, shed jobs, slash worker pay and streamline their business plans.  

"The focus of the restructuring is to deal with overcapacity and loss of competitiveness for companies involved," said Yim Jong-yong, the chairman of the Financial Services Commission (FSC).

"Companies and creditor banks can't do this alone. We all need to work together and fast to make this happen," Yim added.

While the FSC also named the steel, petrochemical and construction sectors as being in need of intensive restructuring, it focused on shipping and shipbuilding because of their "continually worsening situation". 

Daewoo, partially owned by state-run Korea Development Bank, will be required to shed thousands of jobs, cut costs and have its progress reviewed by creditors, according to the FSC statement. 

Hyundai Heavy and Samsung will also be required to submit their own restructuring proposals, which will be closely monitored by their creditor banks.

Shippers like Hanjin and Hyundai will be required to renegotiate and slash charter rates for vessels they have leased and reach an agreement with bondholders to restructure the debts before creditors start to provide support. 

Creditor banks, mostly state-run, will help boost capital of the ailing companies that push through "speedy and pre-emptive" restructuring measures, the FSC said. 

"The government and creditors need to make full efforts for speedy restructuring to... revitalise the economy as soon as possible," it added. 

An extended slump in exports and weakening domestic consumption has taken an increasingly large toll on Asia's fourth largest economy, which expanded just 0.4 per cent in the first quarter of this year. 

Exports, which account for nearly half of the country's economy, have been in decline for 15 straight months. The International Monetary Fund this month cut the country's growth outlook for 2016 to 2.7 per cent from 2.9 per cent.

AMMAN — The first credit information bureau will play a key role in increasing financial inclusion and eventually triggering economic growth, Central Bank of Jordan (CBJ) Governor Ziad Fariz said Monday.

Speaking at the opening of the Euromoney Jordan Conference, Fariz said the bureau will help make available credit for those who were never able to get credit from banks.

“The bureau is important for enhancing financial inclusion, especially for startups and women and increasing their participation in the economy,” said Fariz, adding that only 25 per cent of Jordanians have bank accounts.

“We have to exert efforts to increase this percentage to 50 per cent, which is internationally acceptable,” added the governor at the event, which brought together around 400 high-level government officials, investors, financiers, business leaders and entrepreneurs from Jordan and across the Middle East region to address the development of Jordan’s innovation economy. 

During the event, Planning and International Cooperation Minister Imad Fakhoury reviewed Jordan’s National Vision and Strategy 2025 which charts the path for the future and determines the integrated economic and social framework that will govern the economic and social policies based on providing opportunities for all. 

“This national strategy is foreseen to enable Jordan to move rapidly to the diversification of resources, development of infrastructure, and capitalise on existing strengths. Its basic principles include promoting the rule of law and equal opportunities, increasing participatory policy making, achieving fiscal sustainability and strengthening institutions,” said Fakhoury.

The strategy is being implemented through three phases. The Kingdom’s 2016-2018 Executive Development Programme (EDP) forms the first implementation phase. 

This programme has been prepared with full coordination for the first time with the General Budget Department so that the outputs of the development programme are the reference in the preparation of the budget which ensures the direction of financial allocations in the areas of development, that have been planned for. 

The EDP also takes into consideration the Governorates Development Programmes for 2016-2018, he added.

The government has also identified 15 priority initiatives that were included both the long term strategy and medium term plan. These priority initiatives are in the sectors of water, healthcare, tourism, energy, vocational training, investment, transport, ICT, education and local development, Fakhoury continued.

Regional circumstances and disruption associated with them have impacted Jordan for very long... However, Jordan has always been able to accommodate its strategies and plans accordingly.

“We always seek to find opportunities in challenges, thus though we have long-term strategy “Jordan 2025”, but its implementation is through flexible medium term developments programmes that are revised annually. This enables us to take all new developments into account within our plans. For instance, currently the (2016-2018) EDP  is being revised to integrate the outcomes of the 2015 Population Census and the Sustainable Development Goals of the 2030 Agenda  into the programme,” Fakhoury elaborated.

Organised by Euromoney Conferences, the event also attracted a significant number of international delegates from further afield, including attendees from Australia, Canada, France, the United Kingdom and the United States of America.

Sharing their views during the opening session, panellists including Ahmad Abu Eideh, chief executive officer, Middle East at Standard Chartered, and Trevor Cullinan, director of sovereign ratings at Standard & Poor’s, debated the outlook for Jordan’s economy, discussing the effect of low energy prices, the future of the International Monetary Fund programme and public debt management, as well as addressing the expected impact of the first phase of the Jordan’s 10-year economic development programme, ‘Jordan 2025’.

The event also explored the important role that Jordan’s small and medium-sized enterprises sector plays in the country’s wider economic development. 

Panellists such as Fawaz Zu’bi, founder and chief executive officer of Accelerator Technology Holdings, Rasha Manna,  managing director of Endeavour Jordan, and Marion Hoenicke, head of the lending operations division at European Investment Bank, discussed the challenges and opportunities faced by entrepreneurs and start-ups. 

They also examined the role that supporting organisations, such as donors and credit agencies, play in helping these companies to grow and thrive, as well as how Jordan can further cement its status as a hub for entrepreneurship in the region.

Another key theme of the conference was that of innovation and the development of a digital ecosystem in Jordan. 

Panellists explored how digital technology and information communication technology contribute to the advancement of the innovation economy, looking at its potential benefits to the Kingdom’s economy as a whole. 

RIYADH — The powerful young prince overseeing Saudi Arabia's economy unveiled ambitious plans on Monday aimed at ending the kingdom's "addiction" to oil and transforming it into a global investment power.

Deputy Crown Prince Mohammed Bin Salman said the world's top oil exporter would raise the capital of its public investment fund to 7 trillion riyals ($2 trillion) from 600 billion riyals ($160 billion) and would sell up to 5 per cent of shares in state oil giant Aramco.

The plans also included changes that would alter the social structure of the ultra-conservative Muslim kingdom by pushing for women to have a bigger economic role and by offering improved status to resident expatriates.

"We will not allow our country ever to be at the mercy of  commodity price volatility or external markets," Prince Mohammed said at his first news conference with international journalists.

"We have developed a case of oil addiction in Saudi Arabia," he had earlier told Al Arabiya television news channel.

His "Vision 2030" envisaged raising non-oil revenue to 600 billion riyals  ($160 billion) by 2020 and 1 trillion riyals  ($267 billion) by 2030 from 163.5 billion riyals ($43.6 billion) last year. But the plan gave few details on how this would be implemented, something that has bedevilled previous reforms.

The 31-year-old prince gave assured answers to questions on the plan, and appeared to pitch his comments to appeal across the Saudi social spectrum, and in particular to young people, who face unemployment and an economic downturn despite their country's oil wealth.

Even before oil prices started to plunge in 2014, economists  had regarded Riyadh's fiscal policy and economic structure as being unsustainable, but reduced income from energy sales has made reform more urgent.

At the centre of the plan is the restructuring of its Public Investment Fund, which Prince Mohammed said would become a hub for Saudi investment abroad, partly by raising money through selling shares in Aramco.

The partial privatisation of Aramco was also central to the plans, and Prince Mohammed said it would be transformed into an energy company that he expected to be valued at $2 trillion to $3 trillion, and that less than 5 per cent of it would be listed on the stock market.

So big is the state oil company because of its rights to the kingdom's crude reserves, that selling even 1 per cent of its value would create the biggest initial public offering (IPO) on earth, he said.

He added that other Aramco subsidiary companies would also be listed along with other publicly held companies, and noted that one major benefit of privatisation was that it would increase transparency and help limit corruption.

"People used to be unhappy that files and data of Aramco are undeclared, unclear and not transparent. Today they will be transparent. If Aramco gets IPO-ed that means it has to announce its statements of accounts," he continued.

Since the prince was appointed to oversee Saudi long-term planning through the Council of Economic and Development Affairs, Riyadh's focus on reform has grown far more urgent and far more acute.

Prince Mohammed has enjoyed a dizzyingly rapid rise since his father became king 15 months ago, from being little known outside the ruling Al Saud family to become the driving force of Saudi plans to prepare for a future after oil.

In his rare press conference, he presented himself as a modernising leader who seeks to shake Saudi Arabia out of its economic slumber and its reputation for opacity and rigid bureaucracy, showing an interest in topics including education, the public role of women, and football.

The government ran a deficit of 367 billion riyals ($98 billion) or 15 per cent of gross domestic product in 2015, officials said, and this year's budget plan aimed to cut that to 326 billion riyals ($87 billion).

His economic team has already announced efforts to curb wasteful government spending, to diversify revenue streams by introducing sales tax and privatising state assets, and to make reforms in the education sector.

Such was the speculation among Saudis over the details of the plan that hashtags associated with it were the top two trending on Twitter on Monday in the country with the highest rate of social media use in the Middle East.

But ambitious targets, such as raising the private sector share in the economy to 60 per cent from 40 per cent, reducing unemployment to 7.6 per cent from 11 per cent and growing non-oil income to 1 trillion riyals ($267 billion) from 163 billion riyals ($44 billion) were not explained further.

Some Saudis said they had hoped for more detail on crucial issues such as education reform. There were no further details of plans to increase revenue from tax or of any changes to the political structure of the absolute monarchy.

"For me as a Saudi, I am concerned by the education transformation plan," said a Saudi entrepreneur. "If it is not at the top of the list, why not?"

However, the plan also envisaged increasing women's participation in the workforce, something that has already grown quickly over the past five years, to 30 per cent from 22 per cent.

But he also said he did not believe Saudi society was ready to end its ban on women driving.

A green card system would also be launched within five years to enable expatriate Arabs and Muslims to live and work long-term in the country, Prince Mohammed said, in a major shift for the insular kingdom.

But the focus was on economic restructuring to help reduce oil dependence.

"I think by 2020, if oil stops we can survive," Prince Mohammed said. "We need it, we need it, but I think in 2020 we can live without oil."

Appealing to Saudi youth, he ended his news conference by promising them a new Saudi Arabia.

"The vision is not a dream, it's a reality that will come true," he said.