Manama: Oman is forming a committee to tackle the economic impact of the coronavirus pandemic, a government media office said on Sunday.
Oman’s Sultan Haitham Bin Tariq has ordered the formation of the committee and will be affiliated to the Supreme Committee on COVID-19, the Omani news agency ONA reported.
The interior minister will head the committee, which will handle the economic effects of the pandemic and study the speedy return of economic activities, ONA quoted a statement from the sultan's office as saying.
Oman is reeling from the double whammy of Covid-19 pandemic and low oil prices. Earlier this week, Bloomberg reported that Oman has approached the neighbouring Gulf countries for financial aid in an effort to shore up its ailing economy. The talks took place at the leadership and foreign ministry level between Gulf officials, but are preliminary and without any formal decision, the report added.
An Omani foreign ministry official, asking not to be named, said his country reached out to neighbouring countries to discuss ways to back up its national program to mitigate the impacts of the drop in oil prices and the coronavirus outbreak.
Oman was among the most vulnerable economies in the six-nation Gulf Cooperation Council (GCC) even before the dual crisis. The Sultanate has been beset by low oil prices and lockdown measures clamped to curb the spread of the virus.
Oman has taken a series of measures during the span of a month's time, including a further 5 % cut in the budget of the government agencies and the army and the combination of its two wealth funds - the State General Reserve Fund and the Oman Investment Fund - into one entity.
Last week, Omani Minister of Tourism Ahmad bin Nasser al Meherzi said that a 4 % fee to be charged on customers at hotels, in an effort to mitigate the impact of coronavirus in the tourism sector.
Oman’s long-standing role as a mediator on regional and international issues, including with Iran, and its geographical position on one of the world's busiest shipping lanes, make its stability important to Gulf States and international allies like the U.S.
Last month, Sultan Haitham met with the foreign and finance ministers of Qatar, which is being boycotted by a four-nation Arab bloc led by Saudi Arabia. The talks followed a series of meetings and phone calls between Oman, Kuwait and Qatar, ONA reported.
Oman is the biggest Arab oil exporter outside OPEC. But, it is one of the most vulnerable oil producers in terms of credit profiles.
Its break-even oil price – the price required to balance its government budget – is $82, according to Fitch Ratings. Hence, the ongoing OPEC+ cuts are only set to deepen deficits in the GCC and stall growth. Under the latest round of agreed cuts, Oman will slash its crude production by 23 percent.
Oman is nearing a seventh consecutive year of fiscal deficits. The gap is expected to widen to 16.9% of gross domestic product this year, according to a forecast by the IMF.
Oman has the highest Chinese exposure among GCC states, with 45% of its exports – mostly oil – going to China.
Meanwhile, the country reported on Sunday five more deaths from the virus, pushing its toll to 104. The country confirmed a total of 1,404 new infections on Sunday, raising the tally to 23,481
