The current structure of the Saudi economy indicates that the Saudi economy is managed through two economic models. The first model is the market economy, which manages approximately 55 percent of the gross national product, while the other part is managed through directed planning, which is the part owned by the government and based on government policies, is pumped into the local economy. This situation makes it difficult to achieve the goal of economic diversification of the current structure of the economy. The first model relies on market freedom and maximizing profits to achieve balance in markets, whether goods or money markets. In this case, the invisible hand, as Adam Smith called it, works to reach the economic balance that achieves the employment of economic resources and economic growth in the long term. As for the government sector, it relies on central planning and the efficiency of the government apparatus to achieve the optimal distribution of economic resources through government spending. Economic studies that examined the economic effects of both models have proven that the free economy model and the government’s focus on systems and legislation that ensure fair competition and prevent monopolies in the economy are the best for maximizing economic welfare and achieving sustainable economic development. In the case of developing countries, such as the Kingdom, the government is forced to intervene in the economy in the event of market failure, but the government must be careful not to control the economy and paralyze the market mechanism from working through the government’s greater role than necessary and the private sector’s subordination to the government sector.
In order to achieve the goal of economic diversification, reduce dependence on oil, and distribute oil revenues more fairly, part of Aramco must be privatized and sold at a subsidized price to citizens. Selling part of Aramco to citizens primarily reduces the percentage of government sector control over the economy and increases the percentage of the private sector through citizen ownership and re-injecting the oil revenues generated for them into other sectors of the economy, which enhances the principle of economic diversification through market mechanisms. Oil revenues, a portion of which are pumped to citizens as returns on their investments in the oil sector, are recycled in the economy in economic sectors. Also, owning a portion of oil revenues for citizens contributes to improving citizens’ income in the event of oil booms, so that economic booms due to oil revenues are reflected on citizens. The market mechanism in directing investments in light of the availability of accurate and timely information, transparency, and the existence of systems and laws and their implementation, which preserves the rights of investors and consumers, is considered the best for achieving economic development and high growth rates that are positively reflected in the growth of individual income and fair distribution. Also, directing a portion of oil revenues to the private sector and reducing the percentage of government sector ownership will contribute to reducing the waste of public money due to the weak efficiency of the government sector compared to the private sector. Many applied studies that compared the performance of both the private and government sectors worldwide using a sample of economically advanced and developing countries indicate the weak efficiency of the government sector and the waste of public money.
If the government does not give up part of its oil revenues through privatization, it will not be possible to achieve the economic diversification called for in development plans. The economy will continue in the current situation, relying entirely on the government sector and its management mechanism for the economic resources it obtains from oil and non-oil revenues, which constitutes a weakness in the efficiency of the economy and a waste of economic resources that will affect the growth of the economy in the long term and the fairness of income distribution within the economy.