Research On Saudi Arabia’s Public Investment Fund

In recent years,under the background of the oil price fluctuations,emerging energy application more widely,many producers have to face the transition of the economic development of petrodollars era,has long been heavily dependent on petrodollars in Saudi Arabia has begun to adjust its efforts on economic development strategy,speed up the pace of diversifying the economy,especially in 2014,Crown Prince Muhammad Bin Salman,with reform-minded ambitions,has taken control of Saudi Arabia’s economy with his ambitious reform programme--Vision 2030.With its Vision 2030 development plan,Saudi Arabia hopes to diversify its economy and end its long-term dependence on oil.The core project of Vision 2030 is the Public Investment Fund.Saudi Arabia to followed the three neighboring gulf countries-Qatar,Kuwait and the United Arab Emirates development pattern.These countries put the remaining revenue from oil into sovereign wealth funds for many years.Under the long-term accumulation of petrodollars foreign,the gulf sovereign wealth fund is more and more big.Their roles in the economic transformation are also more and more attention.As an important engine in the context of Saudi Vision 2030,the PIF,which previously had only 50 employees,has stepped into the spotlight as a major force leading the transformation of the Saudi economy,aiming to manage financial assets worth more than $2 trillion by 2030 and become the world’s largest sovereign wealth fund.During the years of PIF’s aggressive growth,many of the projects it invested in made great progress.The PIF was not originally set up as a savings fund,but as a stabilization and development fund: its capital was designed to cushion the national budget against fluctuations in commodity market prices,finance development projects,and attract foreign investment and technical knowledge to the kingdom.It aims to diversify government revenues,promote the development of emerging sectors of the economy,especially the private sector,and channel foreign direct investment into Saudi Arabia,thereby facilitating the transfer of foreign knowledge and technology to Saudi Arabia.At the same time,some structural contradictions may become important variables affecting the PIF and even the economic and social reform of Saudi Arabia.Firstly,the lack of transparency,low administrative efficiency and corruption will trouble the development of PIF for a long time.Secondly,the political prejudice of the international community,especially western countries,against PIF and Even Saudi Arabia will also affect PIF’s international investment for a long time.In addition,there are still many critics of the PIF in Saudi Arabia.All in all,these factors essentially reflect the structural contradictions between the profit-eating economic model and the economic diversification transformation.Finally,the expansion of PIF is mainly driven by political forces,and its development process always reflects political participation.It can be said that the construction of PIF is essentially a process of diversified interaction between economy and politics.The PIF gives Crown Prince Muhammad Bin Salman direct access to the country’s vast financial resources.He can use these resources as he likes,increasing his control over important political factions.In addition,Mohammed bin Salman can use the PIF to "buy" international support for his political goals in order to gain diplomatic approval from the international community,especially to enhance the special relationship between the United States and Saudi Arabia,thus solidifying the position as a great power in the Gulf.