Oman's ruler has set up a Dh667.6m fund to help young men and women set up businesses.
Sultan Qaboos creates fund for Oman SMEs
MUSCAT // On a cold, hazy morning in the desert outside the northern town of Bahla last week, Oman's ruler told a group of local people that he had ordered the creation of a fund to help them establish small businesses.
Flanked by two bodyguards, Sultan Qaboos bin Said al Said sat on a wooden bench discussing economic policy with a group of about 300 people sitting a few metres away from him.
"This fund will help young men and women with their projects. The initial capital of the fund has been set at 70 million rials (Dh667.6m), which will be increased by 7 million rials each year," Sultan Qaboos said.
Oman is approaching an economic crossroads, and the sultan's visit to Bahla was a sign of that.
Finance minister Darwish Al Balushi told reporters last month that government spending had created 36,000 jobs for Omanis in 2012 and that a further 56,000 would be created this year, of which 20,000 would be in the civil service.
But an unemployment rate estimated to be 20 per cent by the IMF and dwindling oil reserves has forced the government to change its approach.
The solution, officials say, is to develop an entrepreneurial economy - which would be a major change for Omanis, who have grown accustomed to relying on oil wealth and comfortable jobs in the government.
So Sultan Qaboos, who has ruled Oman for over four decades, has revived a custom of travelling on month-long tours around the country, holding "consultation sessions".
This year's tour is focusing heavily on the economy and the government's efforts to boost employment and encourage people to get involved in setting up small and medium-sized enterprises (SMEs). At last week's meeting in Bahla, he ordered that new owners of SMEs be given state land for free, so that they would start with a "more competitive edge".
"The sooner that SMEs are created, the better for the economy. I don't think we can sustain the surplus situation for too long," said Abdulwahid Al Heraki, an independent economist.
Oman's jobs situation is complicated by the reliance of its economy on foreign workers, many from Asia. About 1.3 million of the population of about 3.3 million are foreigners, most of them workers brought in to do skilled or strenuous jobs in the oil, construction and services industries.
"The ratio we considered was always between 30 to 33 per cent of the population. At present, expatriate numbers have increased greatly, but in some aspects they are temporarily justified, such as for some major projects in Duqm and the upcoming railway project," said the sultan.
The sultan seems to strike a chord with many people when he discusses his new plan to stimulate the economy.
"It is a good initiative by the sultan. I am looking to set up a car repair workshop and I need capital to do it. The financial grant will make me my own boss," 26-year-old mechanic Khalid Al Mukhaini said in Muscat.