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International Optimism about Accelerated Saudi Economic Reform | ASHARQ AL-AWSAT English Archive 2005 -2017
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Saudi Arabia’s Crown Prince Mohammed bin Salman sits during an allegiance pledging ceremony in Mecca, Saudi Arabia June 21, 2017. (Bandar Algaloud/Courtesy of Saudi Royal Court/Handout via REUTERS)

London– “Fitch” international ratings agency said on Thursday that the decision by Saudi King Salman bin Abdulaziz to name his son, Mohammed Bin Salman, as crown prince, would further boost economic reforms in the Kingdom.

In a report, the agency also said that the decision would reduce the risk of the country’s Vision 2030 program losing momentum.

“Mohammed bin Salman was instrumental in setting up the Vision 2030 reform agenda and its implementation plans, including the National Transformation Program 2020, the Fiscal Balance Program and the plan to partly privatize Saudi Aramco,” Fitch said.

The agency went on to say that under Mohammed bin Salman’s leadership of the Council for Economic and Development Affairs, the kingdom’s economic policy has amazed observers because of its boldness.

It included early cuts in subsidies, which has given markets confidence in the government’s ability to rein in big fiscal deficits, it added.

Other western reports have also agreed that the elevation of Prince Mohammed to the rank of crown prince would have “huge positive impact on the Saudi economy”.

The Wall Street Journal quoted well-informed banking sources as saying that the timing of the appointment promoted the direction towards the alliance of the Kingdom’s leaders behind economic reform and foreign political developments.

They added that the measure was a much-calculated step, noting that such clarity was needed in the presence of a major ambitious plan.

Tom Rogers, associate director at Oxford Economics, said: “The shift in royal succession announced this morning should help underpin the durability and credibility of the economic reform process in Saudi Arabia.”

“Market reaction was positive, underlining local confidence in the move,” he added.