The passing of Sultan Qaboos bin Said al-Said last January marked the end of an era. Despite fears of a messy succession, a smooth transition of power ensued from an emergency session held by the Council of Oman (comprising the appointed State Council and the elected Shura Council). As different governmental establishments gathered to witness the inauguration of Sultan Haitham bin Tariq al-Said, the initial challenge of (dis)unity was overcome. If emerging from the shadow of his predecessor was a monumental task, Sultan Haitham was not helped by the inheritance of an ailing economy and a fat bureaucracy.
Shortly after his ascension to power, the double whammy of an oil price collapse and a pandemic ensued. While many believed that these external shocks would plunge the country into a deeper crisis, the economist Karen Young argues that, on the contrary, the plan for economic recovery has accelerated the evolution of Gulf economies, leading to a competitive economic policy landscape. For Oman, the unexpected fallout from Covid-19 has provided the new sultan with more breathing space for reform implementation. In particular, Sultan Haitham has moved to introduce what would have otherwise been unpopular policies under different circumstances. The approach is two-pronged: addressing Oman’s financing needs and delegating authority.
A Shift from Personalisation to Power Devolution
The day after the official mourning for Sultan Qaboos had ended, Sultan Haitham issued a decree that removed reference to his predecessor in the national anthem, substituting it with universal lyrics. That marked the beginning of a shift away from the personalisation of rule towards a systematic division of roles. By appointing the ministers of finance and foreign affairs in August 2020, and later a Secretary-General of the National Security Council, the sultan has not only empowered these government agencies, but also inadvertently insulates himself from criticism, while retaining the authority to hold these figures accountable.
Sultan Haitham’s grip on the reins of leadership, however, remains noticeable in his role as Prime Minister, and equally in the Special Office established by royal decree last June. This office is tasked with overseeing communications with various government bodies. In January 2021, Sultan Haitham promulgated a new Basic Law of the State aimed at outlining civil liberties and rehashing guiding principles for the Council of Oman. As the Omani journalist Rafiah Al Talei notes, many held high hopes for the Council’s elevation to a “legislative institution able to hold the rest of the government accountable,” but this remains to be seen. Nevertheless, the revamped Basic Law underscores the independence of the judiciary as a basis for governmental accountability, unlike its 1996 version, which asserted the previous sultan’s position as the “sole arbiter of national priorities.”
New appointments included a number of non-royals in key positions such as governors and ministers, though equally noteworthy was the integration of certain Shura Council members into the Council of Ministers. If sensitivity to public opinion is seen to lead to change, then continuity was also observed as some ministers retained positions but were given a remit outside the Cabinet –a discreet installation of figureheads. Three women feature in the Council of Ministers, alongside three women as undersecretaries; an undeniable advancement in female political participation, though scepticism around this commitment persists.
A Family Affair
The attention-grabbing provision in the new Basic Law, as analysts have singled out, is the appointment of a Crown Prince, with the sultan’s eldest son, Theyazin, subsequently confirmed in this designation. While many have labelled the move towards primogeniture a historic one, the Omani leadership has in practice been from father to son, from Turki bin Said’s reign (1871-88) to Qaboos bin Said’s (1970-2020). Crucially, codifying an heir apparent allows future successions to avoid the unpredictability that had shrouded Sultan Qaboos’ final years. By also drawing on the youth connection, Theyazin’s current ministerial portfolio (Sports, Cultural and Youth) will stand the sultanate in good stead.
Unlike his predecessor, who kept royal family members at arm’s length, Sultan Haitham has made a serious attempt to include family members in senior government positions. Notable examples include his full brother, Shihab bin Tariq al‑Said, as Deputy Prime Minister for Defence Affairs; Fahd bin Mahmoud al-Said, his cousin, as Deputy Prime Minister for the Council of Ministers; and Asaad bin Tariq, his half-brother, retaining his position as Deputy Prime Minister for International Affairs. The dynastic rule by Al Busaidi members becomes more pronounced with a harder look at the cabinet.
Streamlining Government Affairs, Solving Fiscal Problems
Competence and productivity are chief concerns in the intersection between politics and the economy. A shift towards an institutionalised model recognises experience as the rule of thumb, starting with a new Chairman of the Central Bank’s board, Taimur bin As’ad (also the sultan’s nephew). Overall, Oman’s public administration reform has been geared towards a medium-term fiscal balance plan, which was approved last October. The government had revisited the public wage bill in May 2020 before implementing mandatory retirement thresholds for public sector workers, on top of the non-renewal of expatriate contracts upon expiry. By August 2020, a line-up of 28 royal decrees were issued, dismissing five government councils and merging more than ten ministries –what the Omani journalist Turki al-Balushi calls a “consolidation” in order to decrease capital expenditure at a time of fiscal constraints.
What is conspicuous from the above timeline is that, as far as possible, Sultan Haitham has spaced out these economic policies, while grasping the opportunity offered by the Covid-19 window to implement said policies. Though the sultanate will introduce value added tax (VAT) consistent with the GCC Unified Agreement, the tax (announced in October 2020) will only come into force on April 16, 2021, with a series of exemptions. The six-month period between introduction and implementation offers room for ironing out specificities, known as “Executive Regulations.” More importantly, the gap eases social tensions that could have erupted had such policies been enacted in one fell swoop. Besides VAT, Oman expects to introduce income tax on high earners in 2022 – a move that would be a first in the region.
Reducing public expenditure and enhancing state revenues will likely be a long drawn out process. The International Monetary Fund (IMF) has, however, praised the large-scale reform efforts in the sultanate, estimating “a gradual decline in the rate of public debt to GDP.” Navigating fiscal challenges remains tied to economic stimulation, which in turn involves hitting employment targets, in particular, opportunities for young job-seekers.
Attracting Investments, Reinventing Industries
An eye on investments was cast early in Sultan Haitham’s reign, when a new Oman Investment Authority (OIA) was established in June 2020 – a result of a merger of two existing investment funds. A Forbes article calls the OIA a “middle-weight fund” that cancels out previously duplicated functions, and is tasked with hunting for more sources of revenue. The Ministry of Economy, abolished in 2011 but reinstated by royal decree in August 2020, replaces the “Supreme Council for Planning” and provides further indication of the sultanate’s continued economic focus. By late 2020, the undersecretary of the ministry, Nasser al-Maawali, issued a statement emphasising “sustainability” and an Omani Vision 2040 built on a “knowledge- and innovation-based economy.”
Al-Maawali’s statement reinforces the notion of jumpstarting the Omani economy. The aforementioned medium-term fiscal balance plan, known as “Tawazun,” has since taken centre-stage. Besides venturing into renewable energy projects via a new state entity, Energy Development Oman, Tawazun has launched 16 projects ranging from 5G infrastructure to an aviation academy in collaboration with Airbus Helicopters. One of the projects, building on a June 2020 initiative to set up a Cyber Defence Centre, unveils an Advanced Security Academy with the support of Thales, a French-based security company. These plans for fiscal adjustment shape up, equally, as a tactical gambit to resonate with Omani youths.
The sultanate’s pitch for foreign investment is encapsulated in a recent meeting between Omani officials and foreign ambassadors. A supervisory committee overseeing private investments and Omani exports in foreign markets has since been formed. This concerted push follows an agreement to further develop its Special Economic Zone (SEZ) in Duqm with the construction of a commercial-entertainment centre. Other jigsaws to this investment puzzle include incentives to support business activities in industrial cities, and an online portal known as “Invest Easy,” facilitating cooperation between the public and private sectors. The latest high-profile interstate agreement is borne out of the Chinese Foreign Minister’s official visit to Oman, leading to bilateral cooperation in the fields of science and technology.
Painful but Productive Policies?
Where Sultan Haitham’s reform agenda is concerned, mixed feelings from the Omani public persist, but trust in the government remains key for the acceptance of unpopular policies. Subsequent financial pains on individuals arising from such policies must be publicly understood in the context of an inextricable relationship between politics and economic performance. In other words, without successful economic diversification moving the country away from its dependence on the (low) oil prices, little can be achieved from the efforts of an aspiring sultan.