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EDITOR IN CHIEF- ABDULLAH BIN SALIM AL SHUEILI

Foreign Investment, Bankruptcy laws vital to thriving economy

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Pledges by the Omani government to enact and modernise a trio of statutes, covering Foreign Investment, Public-Private-Partnership (PPP) and Bankruptcy, have been hailed as indispensable to growth of a dynamic private sector and strong economy.


The proposed statutes, outlined in the 2018 State Budget unveiled last week, are part of a slew of measures pledged by authorities in support of its commitment to ‘fostering the contribution of the private sector’ to the nation’s economic development.


“The Government is taking measures to tackle the constraints in Oman’s competitiveness, including through developing the legislative framework. In this respect, the Government is currently working towards enacting Foreign Investment Law, Public-Private Partnership (PPP) law, and Bankruptcy Law,” the budget document stated.


These legislative actions, according to prominent Muscat-based economist Dr Fabio Scacciavillani (pictured)– Chief Strategy Officer at Oman Investment Fund, a sovereign wealth fund of the Sultanate of Oman, will go a long way in boosting the country’s investment appeal.


He explained: “In general, investors are attracted by two main elements: expected returns and the ease of doing business. Streamlining procedures, simplifying requirements, easing the issuance of permits, and facilitating interactions with public offices, will be the crucial factors in boosting private sector growth and attracting foreign investments, which have continued at a healthy pace even during the past few years.


Further improvement is possible by easing initial capital requirements combined with subsequent controls on assets and liquidity to avoid abuse.”


In comments to the Observer, Dr Scacciavillani also underlined the importance of up-to-date insolvency provisions to help improve the economic climate and business environment in the Sultanate.


“The bankruptcy rules are currently contained in the Commercial Companies Law issued pursuant to Royal Decree 4/1974 and therefore after 40 years requires some update. Bankruptcies are inevitable, because capitalism involves risk and sometimes such risk materialises.


For a thriving economy it is of paramount importance to set rules that either allow for a quick turnaround, like the Chapter 11 provisions in the US, or that which can achieve an orderly and rapid disposal of the remaining assets.”


The economist cited in this regard the initiative of Tanfeedh — the National Programme for Enhancing Economic Diversification — to devise a strategy aimed precisely at fostering a business friendly environment in the Sultanate.


“The Foreign Investment Law, Public-Private Partnership (PPP) law, and Bankruptcy Law are important pillars of this strategy,” said Dr Scacciavillani.


“Ministries and other institutions are coordinating their efforts to follow the best international practices in all three areas. Once these provisions will be enacted, their implementation will require the effort of all levels of government to avoid delays or an overly bureaucratic approach,” he stressed.


Also as part of these policy actions, the government has outlined plans to establish a national office for competitiveness to monitor international indicators in order to improve the enablers required to raise the competitiveness of Oman.


It has also announced allocations for eGovernment projects designed to enhance the performance of government units and improve service delivery with a view to encouraging the private sector to finance and implement these initiatives.


Conrad Prabhu


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