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HOUSE_OVERSIGHT_016124

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Ambitious diversification agenda is not without risks Diversification initiatives will require material participation from the private sector. Vested interests and the large bureaucracy could act as a dampener on timely reform implementation going forward. The large size of the NTP program may mean some of its outcomes are internally inconsistent, in our view. Cultural and entertainment changes could be opposed by conservative or clerical factions. Slippage could occur due to execution risk or reform fatigue, particularly due to the socio-economic impact of fiscal consolidation. Any material changes to subsidies or wages could be difficult to implement in the absence of a social safety net. While fiscal consolidation measures are unprecedented in scope, they appear too ambitious or difficult to reach and may leave a financing gap. As such, the measures may still fall short if oil prices do not stabilize, which suggests a need for a less aggressive energy policy going forward, in our view. Government leaders continue to show focus on delivery The US visit of Deputy Crown Prince Mohammed bin Salman and finalization of various Memoranda of Understanding (MoUs) with prominent US corporates helps provide a highly visible anchor for foreign investment and instil business confidence in regards to government focus. It also helps boost the profile of the Deputy Crown Prince both domestically and internationally. This is in line with our view that the government is likely to target rapid implementation of several ‘low-hanging’ reforms to spearhead the program and boost confidence. Energy sector liberalization could also serve as another highly visible anchor to the reform program, in our view. Table 5: Announced US corporates plans during the US visit of the Saudi Deputy Crown Prince Company Sector Outcome Six Flags Entertainment Company has been allowed to operate in Saudi Arabia Pfizer Pharmaceuticals Company has been awarded a direct investment lice

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