Summary: A jump in coronavirus cases has put further pressure on Oman’s economy as Sultan Haitham grapples with a “perfect storm” of low revenues and rising debt levels in the midst of the pandemic. Login or Register To Unlock The Content!This content is locked
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Oman’s oil price and coronavirus-induced financial crisis is most certainly dire. The two fiscal remedies advanced by Cinzia Bianco are indeed unlikely. Nobody in Muscat is thinking of approaching Saudi Arabia and the UAE for funding: both these sources are cash-strapped themselves, and the political cost for making an approach is well-recognised and unacceptable, although if Oman were to pull off a diplomatic coup and facilitate Saudi Arabia’s exit from Yemen, then circumstances might change. The IMF’s pressure on Oman to adopt socially-difficult reforms encountered resistance even in relatively prosperous times; current circumstances would make it even harder for Oman, for example, to introduce VAT and reduce subsidies further. Kuwait and Qatar are more likely to be susceptible to requests for funding, and the authorities are also likely to tap the local market and resort to commercial paper.
Finally, what evidence is there that the UK’s Brexit is ‘not likely to help matters’ in regard to its links with Oman? The reverse seems more likely, adding impetus on Global Britain to develop its non-EU markets – certainly the widening of the parameters for allocating development aid, aligning aid on a broader politically-influenced basis, is likely on balance to benefit Oman.