A new year has begun with a flurry of restructuring, new appointments and policy initiatives. It is natural to look at a collection of new Decrees, and after perhaps congratulating someone on an appointment, simply shrug our shoulders and say “we'll see”.
Reshuffles and announcements are not always interesting to the average person but there is a lot to dig into this time.
What has caught my eye most is the raft of new social development policies designed to ease the burden on citizens with lower incomes. Having worked in more than one government economic initiative, I do sometimes feel scepticism about bold new plans with magical solutions. But one thing I do believe in – credit to the late great J M Keynes, is that economic progress comes via the ordinary person's pocket. That is a simplification and inflation, debt ratios etc. are real economic considerations. However, the basic reality is that people need to have money to spend in order to spend it.
The accession of His Majesty Sultan Haitham bin Tarik came with a perfect storm of challenges: accumulated problems that were overdue for attention, a lower oil price slashing budgets, and then the cataclysm of the Covid-19 pandemic. Oman had to make tough decisions, hurry through painful measures like pension reform, phasing out subsidies and freezing public sector job hires. At the same time, Oman was entering an unfamiliar international debt market for the first time in generations and taking on onerous borrowing commitments. Businesses suffered and closed, and many people wondered whether happier times would return.
The austerity of the last few years has been tough even with the pandemic long passed and the oil price in comfortable territory. The more expensive borrowing needed to be dealt with promptly, the books balanced and fiscal order restored. I have always advocated stimulus as the route out of economic hardship, but even I believe that these decisions had to be taken. The Omani Government needed to clean house, and it is painful in the short term.
In reality, economics is about people. Jobs created and lost are lives liberated or turned upside down. Infrastructure investments are life upgrades for millions and financial opportunities for companies of all sizes – and the people they employ and the families they support. Now that more headline projects are underway in Oman, there is hope for better growth this year. But hope is for tomorrow, and if you're unable to pay your bills or feed your children today, it rings hollow. There is nothing more humiliating than being unable to sustain yourself and your family.
The new benefits announced for longer-term job seekers are just as important as the planned creation of 60,000 jobs. Even more important are the social benefit payments for low income families and some retired people, and the additional support for education to over seventy thousand citizens. The announcement of a major social housing building programme gives hope to many who could not afford to buy or build, as well as providing a direct stimulus in the construction sector.
Not all business people and economists can reconcile the paradox of giving away money to make money, and the practice has its limits! But taking away the fear of not being able to meet the basic needs of a family is a moral duty for any government and one that Oman is addressing. More than that, it will allow more people the freedom to get what they need, keep small businesses afloat with their custom, and float Oman's economy from the bottom while the big investments try to pull from the top. There will be hundreds of thousands of people and families feeling relief as the new measures come into force. Optimism goes a long way in business, and this is a sound business.
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