PPP to protect Sultanate against future oil price drops
Partnerships between public and private sectors to shield against potential drop in the price of oil
Oman’s efforts to set up partnerships between the country’s public and private sectors as it moves towards the twin objectives of economic efficiency and diversification will shield the Sultanate against a potential drop in the price of oil, the Minister of Finance said.
Speaking to Times of Oman, HE Darwish Al Balushi, the minister of finance, said, “Boosting the percentage of non-oil activities means that Oman is moving on the right track towards diversifying the economy and gradually becoming less dependent on oil. He added, “Per barrel oil price in the country’s 2020 budget will be similar to oil prices in 2019.”
The minister had previously stressed the importance of setting up public-private partnership, saying, “The government’s interest in the public-private partnerships stems from their full confidence in the private sector’s ability to take the initiative to lead economic diversification efforts, increase growth, and enhance the competitiveness of the national economy.”
“The contribution of non-oil activities at the end of 2018 increased to about 70 per cent of GDP, a percentage the private sector had a major role in achieving,” he added. “In this context, Oman Vision 2040 adopted the PPP concept as one of its main pillars, which will be translated in practice through the next five-year development plan.”
Al Balushi explained that even though oil prices were not expected to fall, Oman has been preparing itself for any fluctuations in the oil price. He also said that Oman had already looked at various sectors for public-private partnerships, saying, “”Oman’s Vision 2040 has highlighted some promising sectors that will be worked towards in the upcoming five-year plans leading up to 2040, based on economic developments that continue to occur.”
He also said that students and the youth of Oman should always keep these plans in mind. When asked if students and jobseekers should evaluate potential job opportunities based on the sectors Oman has focused on for Vision 2040, he said, “Undoubtedly, they should. There are constant developments such as the fourth industrial revolution, renewable energy, and knowledge-based economies. All of these are clear now.
“Also, in terms of public-private partnership, this is an important factor for the future, so as to give the private sector a larger role in leading diversification efforts in the country, as well as investments and infrastructure projects and providing job opportunities,” added Al Balushi. “Just as there are promising sectors, the private sector itself is vitally important in leading the economy forward,” he added.
According to him, the Public Authority for Privatisation and Partnership (PAPP) is pushing harder for partnerships that can benefit Oman. He said: “It is noteworthy that by the end of the Ninth Five-Year Development Plan, the government aim is for the value of the projects related to the PPP programmes to reach about OMR2.5 billion. In addition, the PAPP is currently studying more than 20 other initiatives for submission thereof to the private sector in the near future.”
The Minister of Finance’s comments came during the Supreme Council of Planning’s (SCP) Public Private Partnership Forum, which took place at the Oman Convention and Exhibition Centre 7 and 8 October, under his patronage.
A statement from the SCP said: “The forum aims to exchange knowledge and experience in the public-private partnership sector and lay down its principles. It will also explore aspects of some developmental projects which can be executed with the PPP model in Oman.”
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