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Wed 23 Dec 2015 03:14 PM

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Saudi king says gov't to diversify income, raise efficiency

King Salman says Gulf kingdom is committed to decrease dependence on oil as main source of revenue

Saudi king says gov't to diversify income, raise efficiency

Saudi Arabia will seek to diversify its sources of income and improve the efficiency of government spending as it strives to reduce its dependence on oil revenue, which has plunged since last year, King Salman said on Wednesday.

The world's top oil exporter is expected to announce on Monday that it has run a big deficit this year, and Riyadh's approach to an era of expected low crude prices is closely watched both inside the kingdom and global energy markets.

Salman's comments precede what is expected to be a more detailed roster of economic proposals outlined in next week's budget announcement, and in a "transformation plan" to be revealed by his son Deputy Crown Prince Mohammed bin Salman in January.

"The kingdom is committed to implementing programmes to diversify sources of income and decrease dependence on oil as a main source of revenue," Salman said in the text of his annual address to the Shura Council setting out policy goals.

"Our vision for economic reform focuses on raising the efficiency of government spending, taking advantage of economic resources and increasing returns on government investments," he added.

The council is an appointed body that debates new laws and advises the government on policy. King Salman, 79, read out a brief statement on live television but his main address was then distributed in paper form to council members and later published on state media.

Noting the volatile economic conditions and lower oil prices in his speech, Salman said Riyadh's fiscal policy was based on "preserving stability and and balance between revenue and spending on big development projects".

He said reforms would also aim to create an attractive environment for increased investment by both Saudi and foreign companies, simplify procedures and boost employment.

The monarch reiterated Saudi Arabia's support for a stable oil market, which he said would protect the interests of current and future generations, and added that the kingdom was committed to continuing oil and gas exploration.

On Saudi Arabia's foreign policy, Salman again called for a political settlement to the war in Syria, adding that Riyadh wanted to preserve Syria as a unified nation incorporating all its religious sects.

He added that any political solution would have to involve all foreign forces quitting the country. Saudi Arabia is a main backer of rebels fighting Syrian President Bashar al-Assad, whose forces are aided by Lebanese and Iraqi militias and Iran.

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