Darwish bin Isma’eel al Balushi, Minister Responsible for Financial Affairs, has said that the world is currently undergoing an unprecedented economic and financial crisis as a result of the ongoing COVID-19 pandemic, coupled with the sharp decline in international oil prices, Oman News Agency (ONA). reports. It’s a crisis that’s causing serious negative impacts on all countries of the world, without exception, and at rates surpassing all predictions, the Minister observed.
Photo credit: ONA
In a statement to ONA, al Balushi said that the slump in prices of Oman oil led to a steep decline in the Sultanate’s oil revenues, and this outstrips the government of its ability to finance programs of development and social expenditure as allocated in the budget, besides exposing the financial position to multiple risks.
As per ONA, the Minister added that, in order to alleviate the crisis, the government has implemented a package of financial procedures which focus mainly on cutting general spending and consumption.
Al Balushi pointed out that the total financial effect of government procedures to tackle the situation is expected to stand at more than RO1 billion. As far as revenues are concerned, the financial effect is estimated to stand at RO300 million, he added.
The procedures undertaken by the government are as follows:
– 10 per cent reduction of current expenses of civil, military, and security units.
– 10 per cent reduction of liquidity allocated for the developmental budget.
– A minimum of 10 per cent reduction in operational and administrative expenses of government companies.
– 50 per cent reduction of subsidy allocated for government companies.
– 50 per cent reduction of bonuses and privilege dues of boards of directors of public authorities, public establishments, and companies.
– A minimum of 50 per cent cut on financial provisions for official missions at all civil, military, and security units, as well as government companies.
– Negotiation with owners of real estate properties leased by the government for a discount in rent by at least 10 per cent.
– Suspension of implementation of new capital projects of government departments and firms, in addition to rescheduling of existing obligations.
– Suspension of promotion and bonuses for all employees of government companies, irrespective of results of a firm or its performance.
– Suspension of all training courses and workshops planned abroad, as well as attendance (abroad) of conferences, exhibitions, and expositions of civil, military, and security units, as well as government companies.
– Suspension of exceptional bonuses for all employees.
– Suspension of all unnecessary ceremonies and activities, like annual celebrations and inaugural ceremonies.
– Giving priority to the private sector in works involving expansion or initiation of activities at government companies, and enhancing the role of government-private sector partnership.
– Accommodating any new developments that might occur during this year within budget allocations, only by raising the efficiency of procedures of spending management, but without demanding additional financial allocations.
The Minister said that these measures touch some priorities allocated to spending, but their implementation has been dictated by the current exceptional circumstances. The overall aim is to safeguard financial stability, he added.
Al Balushi pointed out that the government will continue to monitor the situation of economic developments and the course of oil prices in the next stage. Accordingly, additional procedures will be taken, but without prejudice to priorities of sectors of basic services like health, education, and others, to ensure their sustainability.