Oman economy to register 7% growth in 2013

The Majlis A'Shura yesterday held its 3rd regular meeting of the 2nd annual sitting of the 7th term under the chair of Khalid bin Hilal al-Ma'awali, Chairman of the Majlis A'Shura. The Majlis A'Shura hosted Darwish bin Ismail al-Balushi, Minister Responsible for Financial Affairs who delivered his statement about the draft budget of the state for 2013. He reviewed the major highlights and aims of the state budget for the upcoming fiscal year 2013. He said that next year budget, as it is the case with the previous budget, aims at achieving a number of aims and priorities, as in the basic pillars of the 8th five year plan and its financial framework, in a manner that secures achieving the balance between economic and social development. While developing the assumptions of the financial estimates for the different expenditure items, the socioeconomic developments were taken into consideration, as well as the outcomes from implementing the first two years of the plan 2011 and 2012. He reviewed the broad lines of the budget on the social and economic front. He pointed out that it is expected that the government expenditure estimated at (RO 13) billion to give strong thrust for the commercial and economic activity. The national economy will register a (7%) growth in 2013 and maintain the inflation rates at its current levels. He affirmed that the financial allocation for the development programme of the ministries and governmental units have been enhanced by about (30%) to complete the underway infrastructure projects, such as ports, airports, roads, water, sanitary drainage and infrastructure projects for the Special Economic Zone at A'Duqum and other economic zones. This will provide investor-friendly milieu that encourage local and foreign private investments. He hoped that the national economy would witness more private sector projects especially in production sectors, which add real value and contribute to both diversifying sources of income and generating job opportunities. He pointed out that efforts to enhance the production capacity of oil and gas sector are going on by increasing expenditure on exploration and digging programmes, production and modern enhanced oil recovery. He pointed out that the growth rate of the expenditure of the sector is about (14%). He also pointed out that the cautious approach that has been adopted while preparing the annual budgets for the subsequent year has been followed while estimating oil prices for the purpose of calculating budget revenues. This approach has proved to be sound during the past two years and contributed to making the Omani economy immune from the negative effects of the foreign shocks and sharp fluctuation of oil prices in the world markets. He also pointed out that while the growth of the expenditure size of the budget is high and unprecedented (29%), still the expenditure will be hopefully financed from real resources without the need to borrow or withdraw from funds in an unplanned manner; if the oil prices went down severely. As for the social aspects, the Minister Responsible for Financial Affairs pointed out that the budget attached a great priority to promoting the standard of living of citizens, improving their living conditions in terms of employment opportunities, providing them with quality education and health, supporting aids and housing loans programmes, expanding the social security and insurance, enhancing training mingled with employment, training and rehabilitation programmes in a bid to absorb that targeted number of jobseekers by providing them with necessary skills that enable them to join the private sector's establishments. He added that the growth of expenditure on these sectors is expected to grow by (40%). The expenditure estimates are about (RO 4) billion. They include the financial allocations for covering the cost of employment at the ministries and governmental units, education costs for (522,000) students at the basic and general education and (107,000) students at the higher education institutions inside and outside Oman. The expenditure estimates also include the allocations for the training of (16,000) jobseekers in training coupled with employment programmes and on job training, the monetary liquidity for the housing aids to build housing units (3,580 units), as well as (2,110) housing units for the housing loans programmes, the financial allocations to subsidize the interests of the housing loans, the support of electricity, water and oil, as well as some basic stuffs. The Minister Responsible for Financial Affairs furthered that the financial framework for the draft General Budget of the State for 2013 is estimated as follows: The public revenues were estimated at (RO 11.2) billion, with a growth of (27%), representing oil and gas revenues (84%) of the total revenues and non-oil revenues (16%).  He explained that the oil barrel has been calculated at (USD 85) per barrel and the average daily production at (930,000) bpd. As for the general expenditure, he said that it is expected to be (RO 12.9) billion, a growth rate of (29%) compared to the approved expenditure at the beginning of the year and (12%) compared to the amended expenditure. As for the estimated deficit between revenues and public expenditure, he further said that it will be about (RO 1.7) billion or (15%) of the revenues and (5%) of the GDP. He pointed out that the deficit is expected to be covered from the financial revenues from oil prices being higher than the estimated price in the budget. "Oil is still the main source for financing public expenditure due to the high price for the required equilibrium for covering the budget (USD104) for oil). It is important to affirm the need to abide by the expenditure estimates and not to exceed it except in cases of emergency and dire needs," he added. Afterwards, the floor has been opened for discussions. The members questioned about a number of issues that covered different aspects of the budget, the most important of which are oil and gas revenues, their rate in public revenues, government plans in this regard, the agreements signed with oil producing companies, the government share of the production of these companies, the total oil revenues, the share of government of these revenues, the revenues of the government funds, such as the State General Reserve Fund, Oman Investment Fund, emergency allocation and the possibility of adding these revenues to public revenues. The discussions also covered the inflation rate, the size of expenditure approved in 2012 budget and approved in 2013 budget, the forecast trends for oil production after 2013 and the government vision to develop this important source in the future. The questions of members of the Economic Committee at the Majlis A'Shura focused on the budget of the service ministries, the regional municipalities, foreign investments, their returns and the proposals to set up investment companies in the Sultanate. The questions also covered the rise of the budget of some governmental sectors, the need to attach priority to civil sectors, the pension funds, the oil production and investment, oil and gas insurance, as well as Oman Air and the government investment in it. Major questions were also raised about the importance of providing fishermen and farmers with governmental subsidy. They also tackled the diversification of sources of the national economy as oil is an exhaustive resource, the government investments and their revenues. The members of the Majlis A'Shura also discussed training mingled with internal and external employment in 2012, the local and foreign training programmes carried out by the government or the planned ones. They also touched on the strategic financial allocations and the developmental strategy Oman 2020, in addition to employment opportunities and the available opportunities for employment at the governmental institutions and companies, their types, levels, the required qualifications and experience for them, as well as the expected wages for them. Times Of Oman