A view of Port Sultan Qaboos in Muscat. Getty
A view of Port Sultan Qaboos in Muscat. Getty
A view of Port Sultan Qaboos in Muscat. Getty
A view of Port Sultan Qaboos in Muscat. Getty

One year after Sultan Qaboos, Oman is witnessing continuity and change


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The demise of Sultan Qaboos bin Said on January 10, 2020 marked the end of an era. Since the beginning of the “Blessed Renaissance” in 1970, which took place under his stewardship, Oman achieved unprecedented development, growing massively in every socio-economic metric.

For instance, total GDP increased from $256 million in 1970 to almost $77 billion in 2019. In the same timeframe, the sultanate went from having just 10 kilometres of paved roads, to 40,000km. The number of schools grew rapidly, from three to over 2,000.

But Oman’s march towards modernity has not only focused on modern metrics of development. A key part of Sultan Qaboos’s vision was the importance he placed on the preservation of the country’s centuries-old spectacular heritage and culture as well.

Oman’s current leader, Sultan Haitham bin Tarik, summed up the nation’s gratitude to Sultan Qaboos in a poignant eulogy delivered the day after his passing, in which he said “no words can express what he had achieved and accomplished”.

He references how the late ruler had set up a nation from scratch, one which is now recognised as a cultural and diplomatic power the world over. He went on to say that Sultan Qaboos’s reforms have led to “the blossoming he had wished for his country”. In this vein, Sultan Haitham pledged to continue the work started by his predecessor.

Saudi Arabia's Crown Prince Mohammed bin Salman welcoming Deputy Prime Minister for the Council of Ministers' Affairs of the Sultanate of Oman Sayyid Fahd bin Mahmoud Al Said to the 41st annual Gulf Cooperation Council Summit. EPA
Saudi Arabia's Crown Prince Mohammed bin Salman welcoming Deputy Prime Minister for the Council of Ministers' Affairs of the Sultanate of Oman Sayyid Fahd bin Mahmoud Al Said to the 41st annual Gulf Cooperation Council Summit. EPA
Sultan Qaboos set up a nation from scratch, one which is now recognised as a cultural and diplomatic power the world over

Oman was still coming to terms with the tragic loss of its legendary former sultan when the World Health Organisation declared Covid-19 a global pandemic on March 11, of that same year. The pandemic and its fallout led to an unprecedented series of challenges for countries across the globe. While the far-reaching ramifications of the crisis have humbled even the most developed nations, Oman moved with decisiveness, exhibiting remarkable resilience and nimble-footedness in its response.

A Supreme Committee on Covid-19 was formed in early March. Headed by Hamoud bin Faisal al Busaidi, the Minister of Interior, the Supreme Committee took a series of measures to safeguard the health of citizens, as well as orchestrating the subsequent re-opening of the economy after the lockdown of July and August.

The successful results are a testimony to the success of these measures. As of January 4, 2021, Oman recorded almost 130,000 cases of Covid-19 and 1,500 deaths. This translates to a recovery rate of almost 95 per cent, with mortalities at just over one per cent.

The government also took a number of measures to stimulate the economy and help businesses. On March 18, the Central Bank of Oman announced a comprehensive incentive package, injecting more than $20bn into the economy.

The central bank also announced a slew of other relief measures, like a five per cent increase in the lending ratio for commercial banks and a six-month deferment of interest on loans for affected borrowers, particularly small and medium-sized enterprises.

Relief initiatives with regards to statutory and regulatory compliance were also unveiled. The corporate sector was given tax relief in the form of a three-month extension for filing deadlines, and tourism and municipal taxes were waived until the end of August.

While confronting the immediate fallout of the pandemic, the government simultaneously put in place a restructured governance apparatus. A new Cabinet was formed in August, with the numbers of ministers being reduced from 26 to 19. A number of government institutions were either dissolved or merged with other ministries.

The new Cabinet reflects a process of continuity and change, bringing in a new generation of ministers with relevant fields of expertise, while retaining a cross-section of ministers from before.

A man receives his first dose of the Pfizer-BioNTech Covid-19 vaccine in the Omani capital, Muscat. AFP
A man receives his first dose of the Pfizer-BioNTech Covid-19 vaccine in the Omani capital, Muscat. AFP

In a major devolution of power, Sultan Haitham gave up the titles of Defence Minister, Foreign Minister, Finance Minister and the Chairman of the Central Bank of Oman to other officials. This marks a significant shift towards a more de-centralised style of governance. Similarly, the 11 governorates of Oman have been assigned more powers, strengthening the federal process.

The restructuring of the state apparatus will help achieve multiple objectives, such as increasing the efficiency of the government, promoting investment and business, achieving more focused development at the level of individual governorates. Overall, these changes will stand the country in good stead as it confronts immediate economic challenges and as it draws up a roadmap for the future.

A series of regulations were introduced to achieve a number of economic objectives. For example, the Medium-Term Fiscal Balance Plan 2020-2024 (MTFP), which was introduced in October 2020, focusses on supporting economic growth, diversifying and enhancing government revenue streams, assessing state expenditure and their efficiency, enhancing the social safety net and strengthening financial management. The MTFP aims to bring the budget deficit down to just below two per cent of GDP by 2024. Oman’s 2021 budget has forecasted a deficit of eight per cent.

In an effort to shore up government revenues, Oman announced the introduction of a five per cent value-added tax from April 2021. Water and electricity subsidies will be phased out, starting from January 2021 until 2025 and an income tax on high earners is also under consideration. While these steps will lead to a period of belt tightening, fiscal prudence will help the government enhance its development expenditure in the years to come.

In one of the landmark decisions of the year Sultan Haitham approved the launch of Vision “Oman 2040” in December 2020. It lays down the roadmap for the country over the next two decades. It aims to build upon the gains made since the beginning of the Blessed Renaissance and to further drive a developed, diversified and sustainable Omani economy.

The 10th Five-Year Plan (2021-2025) – the first plan of the Vision 2040 – aims to achieve an average GDP growth of three and a half per cent, creating 135,000 jobs over the duration of the plan’s timeframe. Oman sits on a rich pool of young talent, with 65 per cent of the Sultanate’s population being under the age of 35. Vision 2040 aims to unlock this demographic dividend by modernising the education system, as well as supporting scientific research and innovation.

These measures, along with affirmative action in the form of Omanisation, encouraging more Omanis into jobs previously held by expatriate workers, will create employment opportunities for young citizens, giving businesses access to a dynamic and skilled workforce. The tourism sector, which has long been a major employment generator, is getting a major boost with the exemption of an entry visa for nationals of 103 countries for a 10-day period.

Looking back on the year since the passing of Sultan Qaboos, I can confidently state that Sultan Haitham has ensured a process of continuity and change. Under his visionary leadership, Oman has confronted the immediate challenges with resolve and laid a robust foundation for a glorious future.

Mohammed Mahfoudh Alardhi is the Executive Chairman of Investcorp and Chairman of Sohar International

Tightening the screw on rogue recruiters

The UAE overhauled the procedure to recruit housemaids and domestic workers with a law in 2017 to protect low-income labour from being exploited.

 Only recruitment companies authorised by the government are permitted as part of Tadbeer, a network of labour ministry-regulated centres.

A contract must be drawn up for domestic workers, the wages and job offer clearly stating the nature of work.

The contract stating the wages, work entailed and accommodation must be sent to the employee in their home country before they depart for the UAE.

The contract will be signed by the employer and employee when the domestic worker arrives in the UAE.

Only recruitment agencies registered with the ministry can undertake recruitment and employment applications for domestic workers.

Penalties for illegal recruitment in the UAE include fines of up to Dh100,000 and imprisonment

But agents not authorised by the government sidestep the law by illegally getting women into the country on visit visas.

How to watch Ireland v Pakistan in UAE

When: The one-off Test starts on Friday, May 11
What time: Each day’s play is scheduled to start at 2pm UAE time.
TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.

The five pillars of Islam

1. Fasting 

2. Prayer 

3. Hajj 

4. Shahada 

5. Zakat 

Paatal Lok season two

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Stars: Jaideep Ahlawat, Ishwak Singh, Lc Sekhose, Merenla Imsong

Rating: 4.5/5

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Getting there
Flydubai flies direct from Dubai to Tbilisi from Dh1,025 return including taxes

 

 

New UK refugee system

 

  • A new “core protection” for refugees moving from permanent to a more basic, temporary protection
  • Shortened leave to remain - refugees will receive 30 months instead of five years
  • A longer path to settlement with no indefinite settled status until a refugee has spent 20 years in Britain
  • To encourage refugees to integrate the government will encourage them to out of the core protection route wherever possible.
  • Under core protection there will be no automatic right to family reunion
  • Refugees will have a reduced right to public funds
It Was Just an Accident

Director: Jafar Panahi

Stars: Vahid Mobasseri, Mariam Afshari, Ebrahim Azizi, Hadis Pakbaten, Majid Panahi, Mohamad Ali Elyasmehr

Rating: 4/5

Avatar: Fire and Ash

Director: James Cameron

Starring: Sam Worthington, Sigourney Weaver, Zoe Saldana

Rating: 4.5/5

MATCH INFO

Champions League quarter-final, first leg

Ajax v Juventus, Wednesday, 11pm (UAE)

Match on BeIN Sports

The line up

Friday: Giggs, Sho Madjozi and Masego  

Saturday: Nas, Lion Bbae, Roxanne Shante and DaniLeigh  

Sole DXB runs from December 6 to 8 at Dubai Design District. Weekend pass is Dh295 while a one day pass is Dh195. Tickets are available from www.soledxb.com

The specs

Engine: 1.5-litre turbo

Power: 181hp

Torque: 230Nm

Transmission: 6-speed automatic

Starting price: Dh79,000

On sale: Now

Heavily-sugared soft drinks slip through the tax net

Some popular drinks with high levels of sugar and caffeine have slipped through the fizz drink tax loophole, as they are not carbonated or classed as an energy drink.

Arizona Iced Tea with lemon is one of those beverages, with one 240 millilitre serving offering up 23 grams of sugar - about six teaspoons.

A 680ml can of Arizona Iced Tea costs just Dh6.

Most sports drinks sold in supermarkets were found to contain, on average, five teaspoons of sugar in a 500ml bottle.

The specs

Engine: 1.5-litre, 4-cylinder turbo

Transmission: CVT

Power: 170bhp

Torque: 220Nm

Price: Dh98,900

The specs

Engine: 5.2-litre V10

Power: 640hp at 8,000rpm

Torque: 565Nm at 6,500rpm

Transmission: 7-speed dual-clutch auto

Price: From Dh1 million

On sale: Q3 or Q4 2022 

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

Our legal consultant

Name: Hassan Mohsen Elhais

Position: legal consultant with Al Rowaad Advocates and Legal Consultants

How Filipinos in the UAE invest

A recent survey of 10,000 Filipino expatriates in the UAE found that 82 per cent have plans to invest, primarily in property. This is significantly higher than the 2014 poll showing only two out of 10 Filipinos planned to invest.

Fifty-five percent said they plan to invest in property, according to the poll conducted by the New Perspective Media Group, organiser of the Philippine Property and Investment Exhibition. Acquiring a franchised business or starting up a small business was preferred by 25 per cent and 15 per cent said they will invest in mutual funds. The rest said they are keen to invest in insurance (3 per cent) and gold (2 per cent).

Of the 5,500 respondents who preferred property as their primary investment, 54 per cent said they plan to make the purchase within the next year. Manila was the top location, preferred by 53 per cent.

What is a robo-adviser?

Robo-advisers use an online sign-up process to gauge an investor’s risk tolerance by feeding information such as their age, income, saving goals and investment history into an algorithm, which then assigns them an investment portfolio, ranging from more conservative to higher risk ones.

These portfolios are made up of exchange traded funds (ETFs) with exposure to indices such as US and global equities, fixed-income products like bonds, though exposure to real estate, commodity ETFs or gold is also possible.

Investing in ETFs allows robo-advisers to offer fees far lower than traditional investments, such as actively managed mutual funds bought through a bank or broker. Investors can buy ETFs directly via a brokerage, but with robo-advisers they benefit from investment portfolios matched to their risk tolerance as well as being user friendly.

Many robo-advisers charge what are called wrap fees, meaning there are no additional fees such as subscription or withdrawal fees, success fees or fees for rebalancing.

The Year Earth Changed

Directed by:Tom Beard

Narrated by: Sir David Attenborough

Stars: 4

The burning issue

The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE. 

Read part four: an affection for classic cars lives on

Read part three: the age of the electric vehicle begins

Read part one: how cars came to the UAE

 

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