Oman’s Shura Council approves draft state budget for 2012

Budget targets 7% growth rate, offering 36,000 jobs

Recommendation to set up budget & follow-up committee endorsed

Omani Council of Ministers reviews mechanisms to push forward development

Govt. continues efforts to attract investments for vital projects

Oman’s Shura Council (parliament), under Chairman HE Sheikh Khalid Bin Hilal Al Ma’awali, approved the draft state budget for the fiscal year 2012 after lengthy debates.

The Shura Council Office reviewed the steps taken by the expanded economic committee, which discussed the draft budget of the state for the fiscal year 2012, referred by the government.

The meeting discussed the damages incurred at Al Nahdha Hospital and the nearby areas due to recent heavy rain. The Office decided to delegate the health and social affairs committee to visit the hospital and assess the condition, the reasons behind rain water seeping and submit a report to the Shura on the findings.

The office reviewed the decision of ad hoc committee for developing the internal bylaw of the Shura Council and naming its members from the Shura Council. The committee will submit its report to the council in three months from its formation. The new bylaw will decide its mechanism, the panels and the work regulations at various bodies of the Shura Council in accordance with the legislative and audit powers granted by the Council of Oman.

The Shura Office also reviewed circulars and messages from various government departments and from the Shura members and citizens on many topics and issues related to the service and development aspects in different parts of the Sultanate.

Earlier, a work team from the Shura Council led by Ali Bin Khalfan Al Qutaiti visited Al Nahdha Hospital on Monday.

The Shura team inspected damages at the hospital’s different sections and medical electronic devices caused by floods in the recent rain.

The team was briefed by the executive chairman of Al Nahdha Hospital on damages of the hospital and losses, as well status of patients.

The visit is Shura’s efforts to view the cause behind the water entering the hospital and evaluate damages and the current status of the hospital.

The draft submitted to the Shura Council shows estimated public expenditure at 10 billion rials.

In the new budget, total revenues are 21 per cent higher at 8.8 billion rials over 2011.

Revenue from oil represented 69 per cent of the total revenues, while gas revenue represented 12 per cent and non-oil revenue stood at 19 per cent.

The estimated deficit in the new budget, based on an oil price of $75 would be about 1.2 billion rials, 14 per cent of the total revenue and 5 per cent of GDP (gross domestic product).

The draft report, submitted by the Finance Ministry, was discussed by the Shura Council in a closed session on Tuesday.

On Wednesday, the Shura will host HE Darwish Bin Ismail Al Balushi, Minister Responsible for Financial Affairs, to discuss the draft.

The draft said the estimated total public debt will be 1.56 billion rials, 7 per cent of the initial estimate of GDP for 2012, while it will be 1.26 billion rials at the end of 2011.

The report says the 9 per cent expenditure growth in the budget aims to cover most of the annual commitments for expenditure, whether civil or security and additional requirements resulting from the employment of citizens.

Financial allocations were provided to recruit 79,725 citizens in the military, security and civil units.

The report sought the cooperation of ministries and government agencies with the Finance Ministry to reduce their additional requests for the year as the budget does not allow any growth in expenditure during the year.

In order to cover the deficit, average oil production should rise to 915,000 barrels per day with an average price of $88 in 2012, it said.

The report said if the oil price does not rise, 200 million rials will be withdrawn from the Emergency Reserve Allocation.

Development Bonds of 200 million rials will be issued and 100 million rials will be borrowed from outside. Another option is using 700 million rials from the financial surpluses of 2011 budget, it said.

Meanwhile, the Council of Ministers discussed the Royal speech of His Majesty Sultan Qaboos Bin Said at the opening of the fifth term of the Council of Oman 2011 and development projects being implemented at various regions of the Sultanate during meetings held in November, a statement issued on Monday said.

The council reviewed the contents of His Majesty’s speech which provided comprehensive vision for a national action plan that meets the needs and aspirations of Omani society for a bright future.

The council discussed the need to develop mechanisms that will ensure the implementation of the recommendations and action for the current and future stage in cooperation with all state institutions and sectors to translate these recommendations into reality.

The council reviewed the developments on the economic front, including the Special Economic Zone (SEZ) at Al Duqm; fisheries sector; and the Medical City project.

The council reviewed the progress of projects at the SEZ at Al Duqm. The key projects are the Dry Dock, Al Duqm Airport project, residential quarters, the commercial port, the economic zone, the fish activities complex, the tourist area, resorts, central business district and educational institutions.

By 2020, these projects are expected to achieve various economic objectives such as increasing the contribution of the SEZ at Al Duqm to the GDP, diversifying non-oil exports, increase exports, and attracting more investments to this zone which is designed to serve as a regional centre for heavy industries.

The council’s deliberations focused on creating job opportunities for citizens; expansion of the youth centers and recreational places; harmonize planning with the growth of population growth; ensuring safety of wadis in light of the changes in the climate of the region; and periodic follow up of progress of work and completion.

The Agriculture and Fisheries Ministry made a detailed presentation covering various benefits of diversifying sources of income, increasing fish reserves and enhancing food security.

The council recommended the establishment of small and medium enterprises that encourage Omani youth, as well as establishing an institute for the rehabilitation and training of human resources; ensure proper fish farming by strict supervision; and benefiting from experience of other countries in this field.

The council discussed the implementation of the medical city project and saw a presentation by the Health Ministry.

The council also reviewed the proposal for the different health specialties that will be included in the medical city project. The council has directed that the area of the city be expanded to meet future needs and also allow the private sector to invest in medical services to meet the growing demand by society.

The council was also briefed on the efforts undertaken by the diplomatic and consular missions to help and care for Omani students studying abroad. The council decided to enhance these efforts to ensure that students are in continuous contact with his country and that he /she is always cared for through various programs and providing them with help in case of emergencies.

The council also discussed ways to help mentally challenged people enhance their skills to over come their condition. It stressed the need for retaining the responsibility of supervision to the Social Development Ministry on the National Commission for Special Olympics.

The council also discussed hosting conferences and seminars from December 2011 to the end of February 2012 aimed at exchanging expertise with scientists. It will support the Sultanate’s efforts to attract researchers that aim at imparting experience in these fields.

The Sultanate looks to boost private investments in commerce, services and manufacturing sectors through promoting economic zones, said HE Sheikh Sa’ad Bin Mohammed Al Mardhouf Al Sa’adi, Commerce and Industry Minister.

He was talking on ‘Oman, the Land of Opportunities’ at the forum for Investment in Free and Developmental Zones held at Al Bustan Palace Hotel on Saturday.

The free zones are expected to attract local and foreign investments of $6 billion and will generate up to 20,000 direct jobs and 2020 indirect jobs.

The two-day meeting was presided over by HE Darwish Bin Ismail Al Balushi, Minister Responsible for Financial Affairs.

The total land allocated for the existing industrial estates and those under construction stood at 87 million square meters and the total investments at these estates at $9.4 billion.

Public Establishment for Industrial Estates (PEIE) will invest more than 70 million rials for the construction of new industrial zones and expansion of the existing zones, including 30 million rials for investment in Sumail Industrial Zone.

The free trade and industrial zones in Salalah and Sohar ports have attracted huge investments and Salalah Free Zone is expected to bring in around $3.5 billion investments, he added.

Yahya Bin Said Al Jabri, chairman of the Special Economic Zone Authority at A’Duqm, said the project will boost the Sultanate’s economy and will generate job opportunities.

“It will also increase non-oil contribution to 5 per cent, in addition to increasing the size of re-export and the socioeconomic growth rate in the Sultanate,” he said.

The size of the Arab inter-trade in 2009 amounted to $70 billion, or 9.5 per cent of the Arab and foreign trade, which is a very low rate, and requires more efforts to enhance the Arab cooperation and benefit from opportunities availed by regional economies, said Eyad Al Qudhah, chairman of the Arab Union of Free Zones (AUFZ).

Darwish Bin Ismail al Balushi, Minister Responsible for Financial Affairs and chief guest inaugurated the exhibition on the sidelines of the forum.

Hilal Bin Hamad Al Hasani, CEO of PEIE, said that the forum coincides with the economic development being witnessed by the Sultanate, especially A’Duqm Economic Zone.

He added that the turn out to the forum stood at 650 participants representing 29 countries.

The first session of the forum highlighted the reality and aspirations of the Omani economy and the governmental expenditure on the developmental plan (2011- 2015), the economic pacts and their role in free movement of investments, importance and goals of economic zones, challenges facing investment at the industrial zones and how to overcome such challenges.

The forum also showcased investment incentives and benefits, their impact on the development of invested capital, the components of the investment-friendly environment, the competitiveness of zones, the relative advantage, the impact of the national manpower on the development and enhancement of foreign investments, the legal and regulatory frameworks for the economic zones, as well as the integration of the legislations at the state and their impact on investment and the legislative frameworks for investment and their impact on economic development.

It also discussed the economic agreements and their impact on the development of economic zones, as well as the importance of international organizations of economic zones, the free trade agreement (FTA), in addition to reviewing the AGCC experience and the Arab Free Trade Zone’s experience.

A number of undersecretaries from the Sultanate and GCC countries took part in the forum.

The forum will have three sessions on Sunday, which will include a number of Arab case studies in the field of free and developmental zones.

The opening ceremony of the forum was attended by ministers and honorable members of the State Council, a number of undersecretaries, members of the Majlis A’Shura and representatives of free and developmental zones from the Sultanate and Arab countries.

The two-day forum is being organized by the Public Establishment for Industrial Estates (PEIE) in collaboration with the Arab Union of Free Zones (AUFZ).