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Expanded role for the Oil Ministry under Vision 2030 The Ministry of Petroleum and Mineral Resources has been expanded to become the Ministry of Energy, Industry and Mineral Resources. It will be dedicated for energy, in addition to expanding to encompass responsibilities relating to electricity and industry. It will also undertake the management of the National Industrial Cluster Development Program (NICDP). The new Minister will chair the board of directors of the Royal Commission for Jubail and Yanbu, the Industrial Development Fund, the Saudi Organization for Industrial Estates and Technology Zones, the Saudi Geological Survey, the King Abdulaziz City for Science and Technology, the Saudi Exports Development Authority and the King Abdullah City for Atomic and Renewable Energy. Energy sector liberalization drives non-oil diversification The wider role for the Ministry of Energy, Industry and Mineral Resources is in line with the expanded industrial responsibilities foreseen for Saudi Aramco in the Vision 2030. It may also suggest a continued desire to liberalize the energy sector. The National Industrial Cluster Development Program (NICDP), established in October 2012 by the Ministry of Petroleum and Mineral Resources and the Ministry of Commerce and Industry, could likely gain further importance in the industrialization strategy adopted in the Vision 2030. The NICDP will be managed by the Ministry of Energy. It seeks to leverage Saudi Arabia’s comparative advantage in energy, petrochemicals and minerals to create sustainable export oriented industries, initially focused on the automotive, construction material, appliances, metal processing and flexible packaging sectors. Restructuring the Cabinet and other government bodies The Ministry of Commerce and Industry will become the Ministry of Commerce and Investment and sees the appointment of a new Minister. The new Minister will chair the board of directors of the General Authority for Investment, the General Authority for Small and Medium Enterprises and the Saudi Standards, Metrology and Quality Organization. The Ministry of Labor will be merged with the Ministry of Social Affairs to form the Ministry of Labor and Social Development, and sees the appointment of a new Minister. The Ministry of Water and Electricity has been disbanded. The Ministry of Agriculture was renamed the Ministry of Environment, Water and Agriculture and expands its responsibilities into these areas. Two new Ministers for Transport and Health were appointed. The Ministry of Hajj has been renamed the Ministry of Hajj and Umrah and sees the appointment of a new Minister. The Saudi Fund for Development will now report to the Council for Economic and Development Affairs. The General Authority for Entertainment and the General Authority for Culture have been created. The Department of Zakat and Income Tax was renamed the General Authority for Zakat and Income, and will report to the Ministry of Finance. New Central Bank Governor maintains commitment to USD peg Saudi Arabian Monetary Agency (SAMA) Governor Al-Mubarak has been replaced in his post by SAMA Deputy Governor for Research and International Affairs Dr. Al-Kholifey. A number of officials were also appointed into various government and advisory roles. New SAMA Governor Al-Kholifey’s past policy pronouncements suggest continued commitment to the USD peg. Watch the Saudi Fund for Development The Saudi Fund for Development (SFD) new direct link to the Council for Economic and Development Affairs likely concentrates further authority in the Deputy Crown, in our view. Given that the Public Investment Fund (PIF) last saw similar links being established prior to plans being made for it to be turned into a Sovereign Wealth Fund (SWF), this could suggest further strategic changes may take place at the SFD. 4 GEMs Paper #26 | 30 June 2016 38 Merrill Lynch HOUSE_OVERSIGHT_016114