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Oil price slump not to hit development, lives of Omani people: Sayyid Fahd

Oil price slump not to hit development, lives of Omani people: Sayyid Fahd

MUSCAT: H H Sayyid Fahd bin Mahmoud al Said, Deputy Prime Minister for the Council of Ministers has issued a statement about the nation’s method of addressing the current global economic situation that led to the decline of oil prices. He said that Oman’s development projects will continue as planned and steps are being taken to avoid any negative impact on the citizens’ lives here the other day.

“Action is focused on avoiding impact on the lives of citizens, the Omanisation process, employment and training programmes in both the government and private sectors and the entitlements of employees. Moreover, services rendered to citizens will not be affected,” he said, adding that these are considered the basics of His Majesty Sultan Qaboos bin Said’s vision and His Majesty’s keenness to provide a decent life to citizens.

“Since the outset of the Blessed Renaissance in 1970, the Sultanate has survived fluctuations in oil prices. Through the vision of His Majesty the Sultan and the cooperation from citizens, the Sultanate has overcome all kinds of challenges,” the deputy prime minister said, while adding that the country has weathered tough times in the past when there was no infrastructure projects, economic diversification policies and investment opportunities compared to what exists today.

Oil revenues account for around 90 per cent of the income of most the GCC countries and with prices below the budget forecasts, their governments are looking at budget deficits next year.

Steps are being taken to maintain economic and social growth, boost commercial activities and encourage investment, said Fahd.

“Encouraging both local and foreign investment, executing major strategic projects or projects for public benefit and improving the role of the private sector will continue as these initiatives are fundamental to the development objectives to maintain a stable economic status which can promote the country’s development ratings,” the deputy prime minister said while expressing optimism about Oman’s future.

An economist from an international business advisory firm said the need of the hour is to attract investment.

“Oman should develop a more proactive and knowledge-based approach in the identification and targeting of industries to be promoted. Those countries that have a clear integrated strategy tying infrastructure development plans to business and economic objectives have higher rankings. This gives long term clarity to investors,” Dr Anchan C K, managing director at World Wide Business House, said.

“Modern industries are increasingly characterised by their diversity on the one hand and their interdependence on the other. Services and manufacturing are becoming more intertwined and in promoting trade and investment, the two should be promoted together. I suggest that consideration should be given to a more proactive approach. There should be room for a greater role of the private sector in providing input to the promotion process,” Anchan added.

While talking about the importance of diversification of economy in the present market situation, P Chandrasekr, group general manager at Jawad Sultan Group of Companies, said that non-oil revenue generation, notably tourism has a great potential.

“Apart from bringing in the desired revenues, the tourism sector does not suffer market price vicissitudes. Some of the steps to boost tourism have already happened. In addition, a number of prestigious hotels and resort projects, too, are in the offing and all this will take shape in the next two to three years. Hence, Oman has the wherewithal to withstand the oil price vagaries,” the group general manager added.

A resident said she is not sure from where the shortfall in revenue will come to support growth that Oman has experienced in recent years.

“There is a drive from the government to diversify and promote SME, but there is a long way to go before these will have the impact required to cover such a shortfall. Difficult times may be experienced in 2015 unless there is a recovery in oil prices. I am sure that the government will put the necessary measures in place to support Oman’s future,” Tonia Gray, general manager at Competence HR, said.