Muscat – By pushing the government to make more efficient use of higher hydrocarbon prices and a budget surplus of US$2bn, His Majesty Sultan Haitham bin Tarik has “helped reduce anxiety about the stability of the strategically positioned Gulf state”.

An American think tank based in Washington, DC, affirmed that the wise leadership of His Majesty the Sultan has succeeded in facing the twin economic challenges brought about by the COVID-19 pandemic and low crude oil prices.

A report by Jonathan Campbell-James of the Washington Institute for Near East Policy delves into the policies undertaken by the sultanate under His Majesty the Sultan’s guidance to steer it away from the economic crisis that the country faced as His Majesty the Sultan took the reins of the sultanate.

“When His Majesty Sultan Haitham bin Tarik came to power in January 2020, Oman’s foremost problem was a looming fiscal crisis spurred by over-dependence on oil and natural gas revenues, compounded by the collapse in prices during the COVID-19 pandemic. With the period of mourning barely over, Omani crude futures plummeted to US$30 per barrel four months later – a price that threatened to halve the country’s projected oil revenues for the entire year, widen its fiscal deficit, and double its national debt. Oman was already suffering from low credit ratings because of previous budget deficits, so financing this debt in the short term presented challenges,” wrote Campbell-James.

He added that although many of these structural problems persist today, the tide appears to have turned. “In previous crises, the country had often been rescued from imminent financial disaster by a global price recovery and the extraordinary ability of Petroleum Development Oman to squeeze just a bit more oil from its complex geology. This time, however, the political leadership deserves credit as well.”

Under His Majesty’s watch, he wrote, long-stalled laws regarding foreign capital investment, bankruptcy, and public-private partnership have been introduced, along with changes to employment and visa regulations intended to attract foreign direct investment.

“Besides His Majesty the Sultan’s personal example of frugality during the fiscal crisis, the key difference today is that officials are being held more accountable for the effort and results they show when implementing these initiatives. The Sultan’s business style, coupled with the additional constitutional tools he has given himself to strengthen managerial oversight, suggests that he is intent on making sure executives stick to the plan and meet targets.”

Given this sharpened focus, Campbell-James said, “Oman is able to meet targets it all too often missed in the past. For example, the government introduced a value-added tax in April 2021 after years of prevarication. Despite being set at a low rate of five per cent, the VAT raised a modest US$780mn in 2021 and is projected to generate US$1.3bn in 2022.”

He wrote His Majesty the Sultan’s foreign policy appears to have enhanced relations across the board, particularly with Britain and Saudi Arabia.

“Elsewhere, Oman has continued its prominent facilitating role in renegotiating the Iran nuclear deal and securing the ceasefire in Yemen. Warm relations with partners – based on trust and history rather than just transactional value – are paying dividends across the portfolio of government business.”

“Besides His Majesty the Sultan’s personal example of frugality during the fiscal crisis, the key difference today is that officials are being held more accountable for the effort and results they show when implementing these initiatives. The sultan’s business style, coupled with the additional constitutional tools he has given himself to strengthen managerial oversight, suggests that he is intent on making sure executives stick to the plan and meet targets.”

Given this sharpened focus, Campbell-James said, Oman is able to meet targets it all too often missed in the past. “For example, the government introduced a value-added tax in April 2021 after years of prevarication. Despite being set at a low rate of 5%, the VAT raised a modest $780 million in 2021 and is projected to generate $1.3 billion in 2022.”

On foreign policy, His Majesty the Sultan appears to have enhanced relations across the board, particularly with Britain and Saudi Arabia. “Elsewhere, Oman has continued its prominent facilitating role in renegotiating the Iran nuclear deal and securing the ceasefire in Yemen. Warm relations with partners—based on trust and history rather than just transactional value—are paying dividends across the portfolio of government business.”