New five-year plan will continue diversification efforts, with new sources of finance
Omans 2016 to 2020 five-year plan will have continued social spending and investment, thanks to new PPP frameworks that will ease the budgetary constraints that have come with lower oil revenues, said Ali Massoud al-Sunaidy, the Minister of Commerce & Industry, speaking at MEEDs Oman Projects Conference on 26 October.
The economy is gradually adjusting to wave of low oil, says Al-Sunaidy. The adjustments will include financial and economic measures. The medium-term outlook is positive, despite short-term budget pressure, thanks to fiscal reserves and underutilised sovereign debt, helping Oman to continue its development plans.
The hydrocarbons fell 38 per cent in June figures from the National Centre for Statistics and Information, to make up just 34 per cent of GDP. The non-oil sector grew 3.7 per cent, with industry and agriculture and fishing both up 4.7 per cent.
Any budget cuts will be gentle and will protect citizens living standards.
We are implementing initial steps on controlling costs, says Al-Sunaidy. Any measures will be in keeping with the policy of maintaining the welfare of citizens, and there will be no dramatic shocks for growth.
Priorities to sustain growth are improving the business environment, promoting small and medium enterprises and creating jobs for young Omanis.
We are making an effort to reduce challenges for businesses, the steps they have to take, the hassle facing the private sector, says Talal Suleiman al-Rahbi, deputy secretary general at the Supreme Council for Planning. We know some of the challenges related to setting up a business, for example labour. We are trying to address them. The government is taking serious measures to improve the environment for doing business.
Oman will ride out the lower oil prices by seeking private sector investment and finance. Public-private partnership (PPP) frameworks are being prepared for a number of sectors.
The Ministerial Committee for PPP is working on a well-structured framework for PPP, on setting up a well-established framework for public private funding, says Al-Rahbi. The strategic projects already have been adopted, and they promote diversification, generating jobs, and creating income. If there is limited private sector involve, I believe the government will step in. If the private sector wants less risk, the government already steps in.
The first focus will be the transport sector, leveraging Omans position at the entrance to the Straits of Hormuz.