Ali Noureddine
This article was translated from Arabic.
“Oman Vision 2040” was put into action in early 2021 and serves as the benchmark for all economic and social development in the Sultanate of Oman between 2021 and 2040. All sector plans and general policies are based on this global vision, which has been under serious consideration since 2013. The late Sultan Qaboos Bin Said appointed a special committee, which was later led by his cousin Haitham Bin Tarik, who succeeded him as Sultan of Oman in 2020.
In terms of sociopolitical policies, “Vision 2040” might be viewed as the government’s blueprint for the current Sultan of Oman, Haitham Bin Tarik. The sultan developed the document between 2013 and 2020 when Qaboos was in power, and did not personally accept the final recommended versions until only a few months after ascending to the throne.
Observers point out that the administration is committed to implementing the economic planning clause‘s provisions as quickly and effectively as possible.
Upcoming privatization wave
The government’s investment arm, Oman Investment Authority, announced the start of implementing a major plan for the privatization of over 30 enterprises it now owns in order to begin implementing the “Vision” principles.
Over the following five years, the Investment Authority plans to progressively sell shares of these enterprises to the private sector in order to raise 6.4 billion dollars. As a result, its interests in other nations will rise and diversify.
Currently, the Investment Authority has investments in more than 35 different nations while the Omani government keeps at least two thirds of the Authority’s holdings in current assets that may be liquidated as necessary.
The Omani economy will be progressively freed from government control and transformed into an open and vibrant economy as a result of this wave of privatization. The government will sell its interests in the energy, manufacturing, and tourism sectors to do this, with the promise to subsequently evaluate the remaining portions of its holdings and local assets before deciding which state enterprises would next be privatized.
The current privatization initiative is what the government is banking on to create a successful private sector that can compete successfully in the international market. Through this privatization drive, the government also hopes to attract international capital and investments to Oman.
This is precisely what the Sultanate of Oman was preparing for in April when it announced measures that allowed foreign investors to fully own the value of their shares in local businesses. By attracting foreign capital in this manner, the Omani stock market exchanges will also be stimulated despite the current liquidity crunch.
The current wave of privatization aims to implement the Vision 2040 framework’s goals of “expanding the private sector, investment, and international collaboration.” According to this “Vision,” “supporting the ideals of competitiveness” entails strengthening the private sector and giving it the reins to guide an economic rebirth.
This can only be accomplished by deepening the capital market, providing it with the required resources, and increasing its capacity to support economic activity. “Vision 2040” aims to scale back government and limit its powers to those of control, jurisprudence, and regulation in exchange for a reduction in direct investment. The ongoing privatization process demonstrates this.
Risks, apprehension, and criticism
There are many risks associated with privatization, and Omanis have expressed concern in this regard, particularly since no social oversight was involved.
The Sultanate of Oman declared that community engagement was one of the basic tenets of “Vision 2040,” however it remains lacking. Involving stakeholders from different socioeconomic strata in the decision making process and collaborating on the development of policies that might decrease harmful effects are at the core of community partnership.
The list of stakeholders impacted by the current privatization wave but not participating in its planning includes employees and workers at the enterprises whose ownership is being transferred to the private sector. These individuals’ job security will be impacted by the privatization decisions made because corporations usually reduce their staff in an effort to increase profits. The list also includes consumer stakeholders who benefit from a few fundamental essential services that will no longer be provided as a public service but rather as a private service.
Therefore, despite the fact that they have an impact on the costs of the services that customers pay for and the number of employees that the companies will retain, the Sultanate of Oman didn’t take the initiative to include representatives of all these strata when gearing up prospective privatization routes.
This course attracted a great deal of criticism with regard to a number of essential sectors affected by this privatization wave, such as the electricity and education sectors. Privatizing these sectors would essentially entail tying basic services to for-profit businesses that only put their profit ahead of their customers’ needs and allow supply and demand to determine their prices, as opposed to the government regularizing these sectors to maintain social security.
The privatization of oil and gas exploration and extraction was another aspect of the privatization road that drew criticism. Opposing opinions contend that these operations need to remain under the management of the public firms because of their relationship to crucial and significant sovereign wealth and their potential for collaboration with international firms in order to draw foreign investment.
Technically, the government giving up its involvement in these operations would entail ceding greater control over its petroleum and gas resources to foreign firms, allowing them to impose their terms and conditions on future production procedures.
The timing of these privatization processes, which are currently being planned, and their connectedness to the deterioration of the international financial markets, as well as the lack of cash flow brought on by high interest rates in the United States and the effects of the Ukrainian war, are, however, the most significant demerits. The Sultanate’s enterprises will need to be compromised in order to be sold off for the lowest possible price, which will result in a fall in investor interest in the industries that are being privatized under these dire financial and economic conditions.
In conclusion, and as predicted, the impending huge privatization wave has sparked much debate over its viability relative to the worth of the public institutions being sold, as well as its implications on social security and the standard of living.
In light of social security goals and the interests of the people of Oman, it is vital that the Omani government begin a thorough investigation of the privatization road and the intentions to sell the Sultanate’s assets. While it is crucial to follow the “Vision 2040” directives, the Sultanate must also be flexible enough to balance the long-term goals of the “Vision” with the current economic and social conditions.