123 School Work

Current State of the Oman economy

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  The Current State of the Omani Economy
  
  Current Problems and their causes
  
  1.0 The Sultanate of Oman has consistently received praise from the international community for the quality of the country's financial and economic management. The well developed system of five year planning combined with a pro active central bank has ensured financial rectitude in the management of the economy whilst Vision 2020 provides a policy framework and direction for the longer term development of the Omani economy and society.
  
  1.1 Yet since December 1997 the Omani economy has suffered a series of shocks which it appears to be experiencing difficulty in recovering from and which have proved difficult for the planning system and institutional framework described above to address. Chronologically this started with the decline in Oil prices. With a lower revenue stream from crude oil sales and with oil revenues comprising a major component of Government revenues, there was no alternative but to cut Government expenditure. Whilst Government expenditure on the purchase of goods and services is a major component of any economy, it is a particularly high component within the Omani economy and as such had a major negative effect both directly and indirectly on the Omani private sector.
  
  1.2 The problem of lower oil prices and reduced Government expenditure was compounded by two other factors, the decline in Muscat Securities Market and the imposition of additional customs duties on luxury goods and other items such as alcohol...