Omani Sultan streamlines cabinet and hopefully economy

Published May 22nd, 2001 - 02:00 GMT

On May 14, the Omani ruler, Sultan Qaboos Bin Said, announced a realignment of his government that, in many respects, could be likened to a reorganization of a corporate boardroom. Two new economic ministries were created, and the activities of another were merged with those of a larger department. Most of the new posting involved individuals with long histories in Omani politics. 


Among the stars of the cabinet reshuffle were Malik Bin Sulayman Al-Mamari, the former transport and housing minister, who was named to head the new transport and telecommunications ministry; Shaikh Suhail Bin Mustahail Shamas, a former telecommunications minister, who will head the new ministry of housing, electricity and water; Shaikh Salim Bin Hilal Khalili, the president of the Oman Chamber of Commerce and Industry (OCCI), who was named the minister of agriculture and fisheries; and Said Sultan Bin Hamad Bin Saud, the chairman of the board of the Oman Establishment for Press, News, Publication and Advertising, who was moved to the position of minister of social affairs, labor and vocational training. The ministry of water resources was merged with the ministry of regional municipalities. 


While the scope of the government reshuffle was limited, its results could be far reaching, since Sultan Qaboos clearly intended to streamline his cabinet in order to promote the modernization of the national economy. 


The new transport and telecommunications minister will play a key role. Among Al-Mamari’s primary priorities, will be to assist in upgrading of the Oman Telecommunication Company (OTC) infrastructure projects.  


He got off to a fast start. On his first day on the job, the OTC announced that it had concluded a $2.47 million deal with Germany’s Siemens, which will involve the installation of a new international telephone exchange. Siemens will be providing all the equipment required for the facility, which will be operational within five months. 


Also announced last week was the award of a $13.5 million tender to expand the GSM network in the Dhofar Governorate. The new governor of Dhofar, Shaikh Mohammad Bin Ali Al-Qatati, was the former minister of electricity and water. 


Shaikh Suhail also faces a daunting task. The ministry of housing, electricity and water is currently involved in a $23.4 million project to establish a control center at Al-Mawilah that will distribute electricity between the major power stations in the Sultanate. The control center is a key element in the ministry’s goal to modernize the power sector in anticipation of the phased privatization of the industry.  


Contracts totaling $17.2 million have already been awarded to Europe’s ABB to design, supply and install equipment for the electricity control center, and Oman’s Civil Contracting Co. has been commissioned to a fiber optic network. The contract to construct the building at Al- Mawilah in which the control center will be housed will be open to tender bids next month. It is expected to become operational by mid-2003. 


The modernization of Oman’s telecommunications and power sectors is considered key to the sultanate’s future development. Oman’s GDP soared 26.7 percent to $19.77 billion in 2000, but that was largely attributed to the energy sector, which last year expanded by 57.7 percent, largely as a result of the higher prices being paid for oil. 


The contribution to the GDP from non-oil activities rose by a modest 7.7 percent to $10.5 billion in 2000, from $9.28 billion in 1999. As a result of this robust growth, the 2000 budget deficit was narrowed to $303 million from a projected $904 million. 


But, like its neighbors in the Gulf, Oman is intent on reducing its dependence on the energy sector, and is directing proceeds from oil sales into non-oil-related projects, for which it is also seeking to attract foreign investors.  


In an effort to attract foreign capital, Oman last year reduced its corporate tax rates and increased foreign ownership limits to 70 percent. Currently, the authorities are planning to allow private investors 100 percent project ownership in the minerals sector. ― (MENA Report)

© 2001 Mena Report (

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