Prince Alwaleed bin Talal, chairman of Kingdom Holding Co.

The fall of crude oil prices points to the need for Saudi Arabia to have an active sovereign wealth fund, said Prince Alwaleed bin Talal, chairman of Kingdom Holding Co.

This will be similar to the sovereign funds in Kuwait, Abu Dhabi and Norway, he said.

“Clearly the income from our sovereign wealth fund would not cover all our budget, but at least should cover a good size of it,” said the prince.

Addressing reporters in Jeddah, he also said that the fall of oil below $80 a barrel proves that Saudi Arabia’s reliance on petroleum revenue is “dangerous”.

Prince Alwaleed said: “Saudi Arabia depends 90 percent on oil, which is not right, it’s wrong and it’s dangerous, actually.”

The prince spoke as oil prices sank to multi-year lows on Tuesday. Brent crude oil futures sank more than $2 a barrel to a four-year low of $82.32.

Shale oil is already putting pressure on oil producers, he pointed out.

Explaining his position on sovereign wealth funds, Prince Alwaleed said: “The Norway fund is our role model because they have around over $850 billion sovereign fund and they make out of this around $40 billion to $50 billion. And that amount covers almost all the requirements of the budget in Norway.”

The prince made the remarks during a visit to the location of the Kingdom Tower and The Kingdom City in Obhur, north of Jeddah.

The tower, now under construction, is projected to cost SR4.6 billion and be the world’s tallest skyscraper at over 1,000 meters (3,280 feet).

 
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