Saudi Arabia replaces long-time oil minister Ali Al Naimi

RIYADH // Saudi Arabia replaced its long-serving oil minister in a major cabinet reshuffle on Saturday as it embarks on unprecedented economic reforms triggered by the fall in the price of oil. Ali Al Naimi, 80, had been in the post since 1995. He is replaced by Khaled Al Falih, the former health minister and […]

RIYADH // Saudi Arabia replaced its long-serving oil minister in a major cabinet reshuffle on Saturday as it embarks on unprecedented economic reforms triggered by the fall in the price of oil.

Ali Al Naimi, 80, had been in the post since 1995. He is replaced by Khaled Al Falih, the former health minister and chief of Saudi Aramco, the state oil company, who will head an enlarged ministry of energy, industry and mineral resources.

King Salman also appointed new ministers for water, commerce, health, transport, social affairs and pilgrimages. Majed Al Qasbi was named head of the new commerce and investment ministry, and Ahmed Al Kholifey was appointed governor of the kingdom’s central bank.

The king also restructured some portfolios, merging the ministries of labour and social affairs and establishing a commission for recreation and culture. The ministry of electricity and water was scrapped.

“The changes, especially at the ministry of petroleum were much awaited,” said John Sfakianakis, director of economics research at the Gulf Research Centre in Riyadh.

“The decision to merge ministries and appoint Khalid Al Falih is definitely a plus and a sign of efficiency and technocratic continuity.”

Mr Al Naimi became president of Saudi Aramco in 1983 and oil minister 12 years later. He had kept his post despite two major cabinet shakeups last year under King Salman, who acceded to the throne in January 2015.

Described by Forbes magazine in 2014 as the world’s most powerful oilman, Mr Al Naimi was the driving force behind a shift by Opec in November 2014 to defend market share instead of simply cutting output to support prices.

Major oil producers had eventually been expected to freeze output at a meeting in Doha last month, but the agreement collapsed when Saudi Arabia insisted any deal must include all Opec members, including Iran, which boycotted the talks.

The rapid decline of oil prices since the summer of 2014 has forced regional governments to slash spending, raise debt and look for new ways to balance the books.

The powerful Saudi deputy crown prince Mohammed bin Salman last month announced a raft of unprecedented economic reforms called Saudi Vision 2030.

The eldest son of King Salman, who is also defence minister, pledged to end the kingdom’s “addiction to oil”.

Saudi Vision 2030 includes selling shares in Saudi Aramco, creating the world’s largest sovereign wealth fund, opening up the tourism sector and transforming the education system.

Before yesterday’s announcement there had been a widespread expectation of a ministerial shake up in Riyadh as the government pushes through its reform agenda.

The newly appointed ministers will be expected to implement some of the ambitious targets outlined by the deputy crown prince last month with a new sense of urgency.

“There is a definite change in the dialectic,” said Mr Sfakianakis. “There is a different air of reform: more of an emphasis on delivery and greater accountability.”

scronin@thenational.ae

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Source: Business

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