Local media outlets sometimes raise questions about the necessity of a national risk management strategy. Indeed, this topic is important because it highlights a fundamental element of any economy that strives for sustainability and resilience in the face of shocks. Over the past five decades, the national economy has faced several shocks resulting from sudden declines in global oil prices, financial and climate crises; and increased competition among countries due to shifting political climates.
The Sultanate of Oman's s economy remains heavily dependent on oil — a traditional feature in the region — and continues to face significant challenges in diversifying. This has led many stakeholders to ask whether there is a clear national strategy for risk management within economic policies. Risks are numerous in any rentier state that relies on oil for its financial and economic foundations, underscoring the need for a unified and integrated strategy to address future risks.
In this regard, the Sultanate of Oman has launched numerous initiatives and programmes, most notably the Fiscal Balance Plan (2020–2024), which serves as a framework for financial risk management. The plan aims to reduce dependence on oil, control public spending, enhance the efficiency of non-oil revenues and gradually reduce the deficit and public debt. It also includes mechanisms for monitoring short- and medium-term financial risks, such as revenue forecasts based on oil price scenarios, early warning indicators for deficits and debt; and contingency plans for external shocks.
The Central Bank of Oman plays a vital role in strengthening monetary and supervisory policies to monitor inflation risks and global volatility, maintain financial stability and issue annual financial stability reports that analyse potential systemic risks to the economy. In addition, the State Financial and Administrative Audit Authority contributes significantly to oversight and the fight against corruption through its monitoring of public funds.
Meanwhile, the government continues to integrate the concepts of economic, environmental and technological risk management across institutions by emphasising economic diversification, financial sustainability and investment in innovation and institutional resilience. Through Oman Vision 2040, it seeks to enhance the nation’s capacity to anticipate shocks, strengthen institutional preparedness for crises, develop governance and financial oversight systems; and detect operational risks and mismanagement. It also aims to combat corruption and misuse of public resources in both government entities and publicly listed companies.
Furthermore, the government is advancing efforts to develop a unified official document entitled the “National Strategy for Economic Risk Management”. It is employing risk management methodologies to identify and address economic challenges, mitigate the negative effects of crises and maintain relative stability. These efforts address key issues such as inflation, price fluctuations, exchange rate instability, economic recessions, policy shifts, supply chain disruptions and declining purchasing power.
At the same time, the government is developing risk response strategies that include eliminating high-risk activities, diversifying income sources, forming insurance and risk-sharing partnerships; and establishing emergency and resilience plans. Building financial reserves through contingency funds and developing flexible business models capable of adapting to change are also key components.
In general, risk management methodologies provide a structured framework for tackling economic challenges, mitigating their impact and enhancing the resilience of individuals and institutions. They are not instant solutions, but rather tools for proactive planning and intelligent adaptation to change.
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