How to reduce costs in the Gulf countries: Oman

Sultan Qaboos Grand Mosque in Muscat, Oman

How the Gulf economies will get their economies back on track as COVID-19 numbers reduces is a dilemma I have been mulling over for some time. In the past, most of the countries have relied on oil to keep their budgets in order. Dubai, of course, is dependent on logistics, and on oil from Abu Dhabi. Qatar is reliant on natural gas of which it is the world's largest exporter. Qatar holds 858 trillion cubic feet (Tcf) of proven gas reserves as of 2017, ranking 3rd in the world and accounting for about 12% of the world's total natural gas reserves of 6,923 Tcf. Qatar has proven reserves equivalent to 609.2 times its annual consumption.

The obvious way to cut costs is by reducing the number of foreign consultants working for a government. Oman is a good example of what will happen across the region. About 70% of all foreign experts and consultants working for the Omani government will not be renewed. That number is huge. It is an indication of what will happen in other countries.

In latest spending cut, Oman not renewing majority of foreign consultant contracts

by Al Monitor staff

Contracts will not be renewed for at least 70% of foreign experts and consultants working for the Omani government.

In an effort to curtail public spending amid a coronavirus-induced economic slump, Oman announced it will not renew the contracts of the majority of its foreign consultants working in government.

According to a circular issued by the royal court on Thursday, contracts will not be renewed for at least "70 percent of foreign experts and consultants working in all civil and government units without exception."

Additionally, at least 70% of civil government employees who have more than 30 years of service must be referred for retirement no later than Dec. 31. At least 70% of government consultants and experts who have worked for 25 years are also subject to mandatory retirement.

The announcement is just the latest in a series of measures to cut public spending amid a slump in oil revenues and coronavirus closures that have hampered the economy. This month, Oman announced an additional 5% cut to the budgets of government bodies and the armed forces.

More than a third of the sultanate's 4.6 million residents are expats. Under the government's so-called Omanization policy, state-owned companies have been ordered to speed up plans for replacing foreign workers with locals. It also called on private companies to ask their foreign employees "to leave permanently."

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Friday, 27 November 2020