Oman plans to cut subsidies next year 21

Gulf Daily News Sunday, 26th October 2014
Oman plans to cut
subsidies next year
KUWAIT CITY: Oman’s government
is likely to start cutting some state
subsidies next year as the decline in
global oil prices pressures its finances,
Financial Affairs Minister Darwish Al
Balushi said yesterday.
The country’s original budget plan for
2014 assumed the government would run
a deficit with an average oil price of $85 a
barrel. For most of this year, the oil price
has been higher, but in the last few months,
it has dropped steeply to as low as $82.
Oman has been considering ways to
reform its costly and sometimes wasteful subsidy system, though reductions in
spending would be politically sensitive.
Asked whether cuts were likely next year,
Balushi said: “Yes, I think the time is probable and especially with the decline in oil
prices. I think the people would be more
understanding now, more accepting. They
realise that this was natural wealth that is
being overused, wasted...”
In an interview on the sidelines of a
meeting of Arab finance ministers and
central bank governors in Kuwait, Balushi
also said the current subsidy system was
ineffective because it did not focus on
poorer people.
“Everybody gets, people who deserve
and people who do not. I think if we
rationalise it and use the saving for better
priorities, that will definitely have a return
for the people of Oman.”
The subsidy reforms will
proceed gradually and make
sure people who deserve state
aid are not affected, Balushi
said. He did not give details of
which subsidies would be cut,
but in the past has described
petrol as an obvious target.
Omani officials have said the
government may return to the
international debt market for
the first time since 1997 to
cover a budget deficit.
Balushi said, however, that
the government’s priority was
to make its first issue of Islamic
bonds for the domestic market.
“Sukuk for the local market
is more clear at the moment,
and we might be doing it during
the first quarter of next year.”
Omani bankers say a rial-denominated sukuk issue would
be a boost for the country’s
n Participants at the workshop
fledgling Islamic finance industry, giving Sharia-compliant
“There are more than $2.8 billion invested in banks a badly-needed tool with
mega real estate projects in the kingdom and the which to manage their liquidity.
new law will set a framework to regulate and
The sukuk issue might be
support such projects.”
worth the equivalent of around
Additionally, the committee will have a dis- $300 million or $400m, Balushi
pute resolution function which will assist devel- said, adding the government
opers and investors in a quick settlement of has been considering maturities
disputes to ensure smooth progress of the project of five and seven years.
and the interest and rights of the investor.
“We look at more options
As per the latest Bahrain Economic Quarterly and see which one will serve
report issued by the Economic Development the government objective and
Board, the real estate and property market in also the economic objective
Bahrain grew by 4.5 per cent in the second quar- and the financial market.”
ter of this year compared to 1.8pc growth in the
same period last year.
Workshop focus on real
estate development law
MANAMA: Charles Russell,
one of the premier full service
law firms in the Middle East
and a leading international law
firm with offices in Bahrain and
Qatar, held a workshop to discuss the new real estate development law in the kingdom.
The workshop, held at the
Capital Club, was introduced by
Simon Green, the firm’s head
of real estate and construction
in the Middle East and included presentations from Unkar
Chanian and Reem Al Mahroos
and visiting partner, David
Savage, global head of property and construction.
The new development law introduced in July
this year and which will come into force in
February 2015, seeks to protect the interests
of investors and developers by establishing a
structure for such projects. Developers will be
required to obtain a licence and to set up an
account to allocate all the funds for the project
to ensure that the money raised from the market
will be used for a specific project which provide
high level of governance.
“The new law will attract more investments
into the real estate market in Bahrain and restore
investors’ confidence in this growing market,”
Ms Al Mahroos said.
n Industry and Commerce Minister Dr Hassan Fakhro directed Industrial Affairs Under-Secretary
Osama Al Arrayedh to open Bahrain Truck and Heavy Trailer Company’s facility in Sitra. The event
was attended by ministry officials, leading businesswomen, businessmen and representatives
from AL-KO, a major German company in the field of spare parts and industrial structures.
Market prices
are reviewed
MANAMA: Senior officials from the Industry and
Commerce Ministry yesterday
visited several markets, including Manama Central Market
for vegetables and fruits to
examine prices stability. The
move comes as Bahrain prepares for Ashoora.
Major suppliers asserted the
availability of fruits and vegetables to meet the demands
in the coming days, in which
more than 1,500 tonnes of
fruits and vegetables are provided on a daily basis from
Saudi Arabia, Jordan, Egypt,
Lebanon, Turkey, India,
Pakistan and other countries.
The Bahrain Livestock
Company and the Delmon
Poultry Company have vowed
to provide adequate supply of
meat during the season.
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