Sultan Haitham … sustaining upward momentum
Three years into the renewed Omani renaissance, the goals of Oman 2040 are driving the momentum needed to sustain the major evolution that is taking place. His Majesty Sultan Haitham has inaugurated new phases of the project, urging them along to completion. In the vision of Oman 2040, and of the renewed renaissance that is rolling out that vision, lies a broad horizon of transformational change, and Sultan Haitham is leading the path to its manifestation. The task is a considerable one, well-designed and closely and constantly monitored since its launch as a grand national initiative by the late Sultan Qaboos. Today, Oman is a greatly transformed nation, internally and in its position in the region and the world beyond; and the renewed renaissance “proceeds in the sure footsteps of the late Sultan towards a future both abundant and secure for the good land of Oman and for all of its citizens.”
The Sultanate is now entering a crucial phase in the renewed renaissance, if the full aspirations of Oman 2040 are to be met, and within the timeframe assigned to them; and if the successes already achieved are to be maintained. At stake are the tangible results of the work so far, in the form of accomplished developments which must be preserved, but also the somewhat intangible process of securing the homeland, of maintaining its stability and reputation for stability. Sultan Haitham has pledged and honoured a commitment to the manifestation of Oman 2040, when the Sultanate will be home to smart, sustainable cities; a place where social and economic prosperity and social justice are fundamentals accessible to all; where economic growth coexists comfortably alongside social welfare beneath a flexible state apparatus, responsible governance, and effective oversight.
An early target in this stage of the transformation process was the increasingly unwieldy state administrative apparatus, which has been gradually restructured over the past three years. Some ministries have been merged to eliminate overlap, some had portfolio titles adjusted; redundant semi-state councils and commissions have been discontinued and new ones established more appropriate to current needs; ministerial functions have been amended as necessary; the Council of Ministers reorganised. All of these changes have had the effect of streamlining the process of government, enabling the structure to move forward with greater effectiveness, better equipped to handle the challenges of accelerated development. Moreover, in parallel with the structural adjustments to the system, legislation relevant to government has been reviewed, for better alignment with the objectives of Oman 2040.
Majesty has given studied attention to the mechanisms of government decision-making. On 16 June 2022, he published his decision to restructure the Council of Ministers, the second reshuffle announced since his accession. As an all-important priority, the performance of government, and of the administrative apparatus of the state, is key to the attainment of Oman Vision 2040, and must therefore be subject to constant review. A further innovation was the creation of the Supreme Judicial Council, presided over by Majesty, which will oversee the reform necessary to create a successful judicial system operating under the highest standards of justice, integrity and transparency. The new system will bring the agencies of litigation and of public prosecution together beneath a single judicial authority, facilitating legal processes today and easing passage to the judicial realities of Oman 2040.
Royal Decree No 35/2022 defined the terms of reference of a reorganised judicial affairs administration which would be compliant with the provisions of the Basic Law of the State and with the objectives of Oman 2040. The reform achieves integration between the principal branches of the judicial authority as well as harmonising procedures that link the judicial authority and the apparatus of state, a development that brings many benefits to the public interest.
At a meeting of the Supreme Judicial Council chaired by His Majesty on 23 June 2022, it was decided that all necessary legal measures be taken with dispatch to amend laws and royal decrees of relevance to the judiciary, conformant with the terms of Royal Decree No 35/2022 and with the importance of continuing to converge the governance and procedures of the judicial system to align with the broad direction of the digital transformation and of Oman Vision 2040.
Royal Decree No 36/2022 brought new decentralised powers to the governorates and new vigour to the administration of their respective economic and social aspirations. The decentralised perspective is more modern, more confident in its deferral to local government objectives, enabling the Sultanate’s 11 governorates to best identify their respective needs and potential. It appeals to the individual strengths of the regional jurisdictions, while serving the larger national goals of 2040, embodied in the overriding principle of sustainable development. It benefits the creation of an attractive, diverse investment environment, of optimal exploitation of resources, and of upgraded local and municipal services in all areas.
The Decree outlined a harmonised organisational structure for all governorates and abolished the Provincial Affairs Council. It outlined the formation, terms of reference and legal personality of the new governorate structure, which would have financial and administrative independence. It added two new wilayat to the administrative division of the Sultanate of Oman, raising the administrative status of both Jabal al Akhdar and Sinaw to that of wilayah. This brings the number of wilayat to 63 across the Sultanate. Their newfound status will facilitate the efforts of Jebel al Akhdar and Sinaw in attracting investment, developing their resources and upgrading local services.
Sultan Haitham has outlined his principal motivation in expanding the powers of local administrations, explaining that the decentralised approach was designed to assist them in “determining their developmental, economic and social priorities, benefiting from the comparative advantage among them, and simplifying service procedures for citizens.” Regional development within the Sultanate is a priority of the Tenth Five-Year Plan, which is redefining national development plans with reference to geographical, demographic and resource-specific strengths, for greater efficiency and balance.
The rollout of the Governorates Development Programme is being seed-funded by an initiative of His Majesty that allocates the sum of OMR20 million to each governorate over the course of the Tenth Five-Year Plan. The funds will be used at the discretion of the governorates to bankroll selected local development projects and disbursed via the development budget’s electronic system. Aggregate financial allocations for these projects for 2023 AD amounts to OMR1.2 billion,
We don’t quite understand these figures If the Sultanate has 11 governorates and each is to receive OMR20 million over 5 years, that wouId amount to OMR4 million each for 2023 multiplied by 11 governorates = OMR44 million. What does OMR1.2 billion represent here? Translation will need to be reviewed after clarification? Thks.
local needs and local initiatives. It is a direct approach to leadership and to identifying the shortest and most effective routes to the resolution of challenges and fulfilment of local aspirations. His Majesty has held direct meetings with sheikhs, dignitaries, and local notables across the Sultanate, cementing the cohesion between leadership and people that lies at the heart of Oman’s indestructible social stability.
These meetings have deeply felt connotations for His Majesty, who believes fully in the value of listening directly to the honestly stated needs of local public representatives, as he believes fully in the process of decentralisation. As a model that fits well with overall national goals for the future decades, governorates will gain ever greater autonomy in the management of their affairs, both in the determination of their respective economic and social destinies and in responsibility for the resolution of local tasks and challenges.
During his 4 January 2022 meetings with sheikhs from the wilayat of Dakhiliyah and Al Wusta governorates at Al Shamoukh al Amer Fort in Manah, His Majesty gave royal directives to raise the sums allocated to each governorate under the Governorate Development Programme from OMR10 million to OMR20 million over the years of the Five-Year Plan (2021-2025) beginning in 2022. He directed the governors to submit an annual implementation plan to the concerned authorities on how they are planning to utilise these allocations.
His Majesty has been generous in his praise, and financial support, for the role played in Omani society by the Omani Women’s Associations. He has also singled out for their valuable contribution the nation’s many public and private rehabilitation centres for persons challenged by disability, ensuring that all such entities, which manifest some of the most noble characteristics of those who serve them, are adequately provided for and rewarded for their efforts.
During his 9 January 2022 meeting with the sheikhs of Al Sharqiyah South Governorate at Fort Al Shomoukh al Amer in Manah, His Majesty focused discussions on the value of entrepreneurship and of the small and medium enterprise sector. He spoke of the encouragement SMEs bring to local economies, of their ability to create job opportunities locally by maximising the comparative advantages of specific regions and districts. He encouraged resourceful members of local communities to take the initiative and establish their own projects, with the help of generous assistance packages provided by supportive government entities affiliated to the Ministry of Finance, to the Small and Medium Enterprises Development Authority, and the Oman Development Bank.
On 10 January 2022, Sultan Haitham met with the sheikhs of Al Sharqiyah North at Al Shumoukh al Amer, where he touched on a number of issues of developmental, economic and social significance to the governorate. He outlined the broad government policies that aspire to bring prosperity to all of the nation’s citizens in a climate of overall economic stability, and the place each citizen had in the endeavour to reach that positive outcome.
On 13 March 2022, His Majesty met with a number of sheikhs from the governorates of Muscat, Al Batinah South and Musandam at Al Alam al Amer Palace. In the course of the meeting, His Majesty raised the issue of licensing fees for the recruitment of non-Omani manpower and referred to his royal directives requiring a reduction of the fees associated with the issuance and renewal of such licences as outlined in the Government Services Pricing Guide. The overall aim of the Guide is to improve the business environment and enhance the competitiveness of the Sultanate in attracting investment and reducing burdens on the private sector, while also bolstering companies committed to raising Omanisation rates. Again, His Majesty spoke of the value to the smaller and larger economy of SMEs and of the need for the private sector to benefit from fee reductions in their practice of affording job seekers a constant stream of employment opportunities.
His Majesty the Sultan directed the addition of 25 food commodities to the list of food commodities exempt from value-added tax, bringing the number of exempt food commodities to 100%, or 513 in total.
his 23 March 2022 meeting with sheikhs from the governorates of Al Batinah, Al Dhahirah and Al Buraimi held at in Beit Bahjat al Anzaar in Wilayat Sohar, His Majesty informed the gathering that the state’s development plans were on track for full implementation and that the restructuring of public institutions was keeping pace, with the target of better services for both the country and its citizens as befits the function of government. On the new economic zone to be established in the Al Rawdah district of Al Buraimi Governorate, he noted that an opportunity existed to optimally exploit high oil revenue in discharge of the state’s public indebtedness. All surplus will be spent on development projects implemented by the government.
Emphasising the central significance of the bicameral Council of Oman (with its State and Shura branches) in the decision-making task of national government, His Majesty received representatives of each in separate meetings, where he noted the hopes pinned on the discussions, studies, projects, plans and opinions explored within the two Councils. Theirs is a work, he reminded them, that intimately affects the destiny of nation and citizen, that demands they strive zealously for ever greater prosperity for both. The meetings took place in December 2022.
His Majesty’s meeting with the Chairman and members of the State Council Office took place on 19 December 2022 at Al Baraka al Amer Palace. He briefed the gathering on the status of current government objectives and urged the Council members to afford priority in their work to ensuring that the momentum and sustainability of the development process was maintained in the higher interests of the country. He also stressed the importance of stronger partnership ties between the Council of Ministers and the State Council, in service of the broad public interest.
On 21 December 2022, Sultan Haitham received the Chairman and members of the Shura Council Office, again at Al Baraka al Amer Palace. He reminded the visiting representatives of their obligation to exercise the powers granted to them under the Council of Oman Law; of the public aspirations vested in them; and of the need for them to harmonise their functions with those of the municipal councils within their constituencies to avoid duplication and overlap. In the understanding that the interests of the nation superseded all others, His Majesty urged the Council members to strengthen their partnership with the Council of Ministers in the higher interest of all.
His Majesty’s concern for public welfare is a constant theme in his interactions with the agencies of government and he directed a meeting of the Cabinet which he chaired on 3 March 2022 to expedite a review of existing social programmes and the bases on which social security allocations are calculated. The objective of such programmes must be to provide an adequate standard of living for beneficiaries and His Majesty instructed the disbursement of a bonus allocation for the month of Ramadan. He also reminded ministers to do what they could to mitigate the impact of the high cost of goods and services on individuals and families of limited income.
In a practical expression of his understanding of the burdens borne by the labour market, His Majesty instructed the licensing authorities to reduce work-related and recruitment-related fees. Cost-trimming initiatives of this kind can have a direct impact on commercial, industrial and private sector business activities and serve to complement the long-term campaigns to stimulate the national economy and revitalise the investment environment.
The fee reductions were part of a package of measures taken at the recommendation of His Majesty that will have more immediate effect for ordinary citizens and small businesses than the larger programmes focused on national financial sustainability. The SME sector continues to be a focus of His Majesty’s attention and he has been vocal in his advocacy of incentives that favour the sector and encourage new start-ups. At a Council of Ministers meeting chaired by Sultan Haitham on 31 May 2022, several significant stimulus measures with economic and social dimensions were approved, at a cost to the treasury of some OMR130 million. The measures include further financial allocations to the Housing Assistance Programme overseen by the Ministry of Housing and Urban Planning. The expanded scheme will add an additional OMR70 million to the Programme budget over the current Five-Year Plan period (2021-2025). It will release all citizens at present benefiting from the Ministry’s Housing Loan Programne and whose monthly income is below OMR450 from the balance of their loans. Further support will be made available to mitigate electricity costs, offering consumers in the residential category with two or fewer accounts a 15% discount for the summer months, May to August 2022. In addition, payment of the job security benefit was extended to the end of December 2022 for citizens who had become unemployed.
Support for small and medium enterprises, and for self-employed and financially challenged individuals whose situation was caused or exacerbated by the Covid-19 pandemic, was agreed in the form of a raft of payment exemptions. Included among the beneficiaries of such exemptions were borrowers availing of the Oman Housing Bank’s emergency loan portfolio; entrepreneurs in possession of a Riada card; and beneficiaries of additional emergency loans granted by the Small and Medium Enterprises Development Authority. SMEs were also exempted from fees and fines resulting from delays in the repayment of loans concluded with the loan portfolio formerly known as the Al Rafd Fund up to the end of 2022. Private and commercial vehicles were relieved from payment of fines and renewal fees for 2020 and 2021. Sums owed by certain Omani entrepreneurs and SME owners and against whom detention orders had been issued and remained open, or who had been served with penal rulings involving dishonoured cheques, were settled. Cases involving parties not subject to the provisions of loan agreements concluded with the formerly Al Rafd Fund loan portfolio were deferred to the end of 2022.
The Council of Ministers has kept a close eye on the Sultanate’s financial performance, and in light of the positive results achieved by the National Programme for Fiscal Balance in maintaining stability, His Majesty instructed the Council at its 17 November 2022 meeting to proceed with the launch of the National Programme for Financial Sustainability and Financial Sector Development, to have a lifespan of three years beginning from January 2023. The programme will stimulate the financial sector to become a major enabler for the sustainable growth of investment and of the economy.
His Majesty also sought approval for the implementation of a number of additional development projects to supplement those approved in the Tenth Five-Year Plan. These include dualisation of the Sultan Qaboos Road in Salalah, the rehabilitation and construction of a rainwater drainage system along the same highway, and the construction of a multi-purpose port in Wilayat Masirah.
So that the Council of Ministers could continue providing the necessary support to mitigate the effects of inflation on the public, His Majesty directed the adoption of further initiatives, including the accelerated promotion of eligible civil service employees who had attained seniority in 2012 according to a schedule beginning in 2023. Also targeted were rising vehicle fuel prices, to be capped at the November 2021 level up to the end of 2023. The job security benefit for laid off workers was extended to the end of June 2023. Current and retired personnel with borrowings from the Housing Loan Fund of the Sultan’s Armed Forces and the Royal Guard of Oman and having monthly incomes below OMR450 would be exempted from payment of the balance on their loans, mirroring the relief offered to citizens benefiting from the housing loan programme offered by the Ministry of Housing and Urban Planning.
A review of the plan to reduce government service fees led to a decision to cancel, reduce or merge an additional set of such fees in a stimulus to economic activity and greater competitiveness in the business sector, as well as to facilitate the bureaucratic process.
In a follow-up of Sultan Haitham’s directives regarding the settlement of minor financial claims incurred by SME owners and by individuals against whom detention orders had been issued, the Supreme Judicial Council, after first coordinating with the Ministry of Finance, settled debts incurred in respect of 1,169 cases involving SME owners and individuals at an aggregate cost to the treasury of OMR2,445,563.213. Accompanying the cash settlement was a release of all associated detention orders and property confiscations by the system.
In a gesture marking the anniversary of his accession on 11 January 2020, His Majesty gave instructions on 11 January 2023 for a cash bonus to be made across the board to the charitable teams affiliated to the social development committees in all states. The gesture honours the valuable work of the many selfless volunteers working for these charities, as well as providing financial support to charities that back up the work of the Ministry of Social Development. His Majesty is especially appreciative of the vital role they play in community service.
The Muscat Stock Exchange is a significant player in the government’s efforts to attract investment from overseas. To encourage greater non-resident participation, His Majesty recommended a suspension of withholding tax and interest on dividends payable to non-resident investors.
The drive to attract overseas investment to the Sultanate, in particular investment in projects that contribute to economic diversification and provide job opportunities for citizens, is a major national priority, as is the financing of these investments. Royal directives have mandated an increase in the ceiling of loans offered by the Oman Development Bank from OMR1 million to OMR5 million, with higher limits for development projects that create added value. In addition to expanding its funding investment in suitable projects, the bank’s capital would be raised to enable the increase.
The decentralisation of investment powers to the governorate authorities received a welcome boost in the form of Sultan Haitham’s instructions to the Oman Development Bank to expand the list of activities and fields financed by the bank. The expansion will invigorate the investment climate beyond the environs of Muscat, bringing new projects and new jobs to the governorates.
His Majesty has welcomed a strengthening of the partnerships between the Oman Housing Bank and various local banks. Coordination facilitates the provision of financing to applicants, thus reducing waiting lists for loans, including housing loans sought from the Ministry of Housing and Urban Planning.
The Sultanate’s improved financial and economic indicators in 2022 validated the strategies that grew GDP, which came in at OMR44.9 billion at the end of 2022. This represented a rise of 32.4% over the figure for 2021, and a surplus of some OMR1.146 billion over what had been an estimated deficit of OMR1.55 billion for fiscal 2022.
Net public spending increased in 2022 by some OMR958 million, much of which was directed at improving conditions for cash-strapped consumers. Targeted subsidies served to stabilise fuel prices, and expand reserves assigned to Oman Housing Bank for loan purposes. New funding fuelled development advances in the electricity, waste disposal, and food commodity sectors. Additional allocations were made available to families depending on social security, and overseas student scholarship allowances were raised by some 25%. Self-employed entrepreneurs qualifying for the Riada card were released from having to take on additional emergency loans, as were borrowers from the Oman Development Bank’s emergency loan portfolio.
By the end of 2022, the government had succeeded in paying off a tranche of the public debt and securing more control over the loan portfolio. Overall public debt dropped from OMR20.8 billion at the end of 2021 to OMR17.7 billion at the end of 2022.
One positive outcome of the government’s stringent fiscal control measures was an upward revision of the Sultanate’s credit rating and of its future outlook by the various international credit rating agencies over the course of 2022.
Sultan Haitham, meanwhile, continues to direct national energies towards an acceleration of the major programmes that will fulfil the goals of Oman Vision 2040. These programmes are working in harmony to find sustainable solutions for management of the economy and public finances, as well as of the national workforce. The National Programme for Financial Sustainability and Development of the Financial Sector (Estidama), the National Programme for Economic Diversification (Tanwiya), the Government Digital Transformation Programme, the National Programme for Investment and Export Development (Nizdahar), and the National Programme for Employment (Tashgheel) have specific responsibilities in the manifestation of these goals.
In its budget for 2023, the Sultanate has introduced projects with a strong developmental impact, for which it has assigned some OMR200 million over and above core budget categories. Among the latter, OMR384 will fund the social protection system, as dictated by Royal Decree No 33/2021, which had the purpose of targeting the most challenged income groups for integrated social protection. It also sought a review of investment strategy to identify the most efficient investments, such as would serve financial sustainability, and improve the overall work environment by funding a rounding up of retirement benefits.