The transition of power in Oman from the deceased Sultan Qaboos to his cousin and the country’s new ruler, Sultan Haitham bin Tariq, has been smooth and quick, but the new sultan will soon find that he has a task in shoring up the country’s economic position.

Above all, the fiscal and debt profile of the country requires careful management. Fiscal discipline was rare for Oman even during the oil price spike of the 2000s. Although oil prices only collapsed in 2014, Oman has been registering a fiscal deficit since 2010, reaching a 20.6 per cent high in 2016. As long as fiscal deficits remain elevated, so will Oman’s need to finance those deficits, predominately by borrowing in the local and international market.

Oman’s Debt-to-GDP ratio has been rising at a worrying pace, from 4.9 per cent in 2014 to an IMF-estimated 59.8 per cent in 2019. By 2024, the IMF is forecasting the ratio to reach nearly 77 per cent. A study by the World Bank found that if the debt-to-GDP ratio in emerging markets exceeds 64 per cent for an extended period, it slows economic growth by as much as 2 per cent each year.

Investors are willing to lend to Oman, but the sultanate is paying for it in terms of higher spreads due to the underlying risk markets are placing on the rising debt profile of the country. For instance, Oman has a higher sovereign debt rating than Bahrain yet markets perceive it to be of higher risk, making it costlier to borrow. Failure to address the fiscal and debt situation also risks creating pressure on the country’s pegged currency.

If oil revenues remain low, Sultan Haitham will have to craft a daring strategy of diversification and private sector growth. He is well placed for this: Sultan Haitham headed Oman’s Vision 2040, which set out the country’s future development plans and aspirations, the first Gulf country to embark on such an assessment. However, like all vision documents in the Gulf, Oman’s challenge will be implementation.

In the age of climate change, renewable energy is a serious economic opportunity, which Oman has to keep pursuing. If cheap electricity is generated it could also be exported to other Gulf states and to south Asia. In Oman, the share of renewables in total electricity capacity was around 0.5 per cent in 2018; the ambition is to reach 10 per cent by 2025.

However, in order to reach this target, Oman would have to take additional measures such as enhancing its regulatory framework, introducing a transparent and gradual energy market pricing policy and integrating all stakeholders, including the private sector, into a wider national strategy.

Mining could provide another economic opportunity for Oman’s diversification efforts, with help from a more robust mining law passed last year. The country has large deposits of metals and industrial minerals and its mountains could have gold, palladium, zinc, rare earths and manganese.

Oman’s strategic location connecting the Gulf and Indian Ocean with east Africa and the Red Sea could also boost the country’s economy. The Duqm special economic zone, which is among the largest in the world, could become the commercial thread between Oman, south Asia and China’s ‘Belt and Road Initiative.’

Oman has taken important steps to make its economy more competitive and conducive to foreign direct investment. Incentives include a five-year renewable tax holiday, subsidized plant facilities and utilities, and custom duties relief on equipment and raw materials for the first 10 years of a firm’s operation in Oman.

A private sector economic model that embraces small- and medium-sized enterprises as well as greater competition and entrepreneurship would help increase opportunities in Oman. Like all other Gulf economies, future employment in Oman will have to be driven be the private sector, as there is little space left to grow the public sector.

Privatization needs to continue. Last year’s successful sale of 49 per cent of the electricity transmission company to China’s State Grid is a very positive step. The electricity distribution company as well as Oman Oil are next in line for some form of partial privatization.

The next decade will require Oman to be even more adept in its competitiveness as the region itself tries to find its new bearings. Take tourism for instance; Oman hopes to double its contribution to GDP from around 3 per cent today to 6 per cent by 2040 and the industry is expected to generate half a million jobs by then. Over the next 20 years, Oman will most likely be facing stiff competition in this area not only by the UAE but by Saudi Arabia as well.

The new sultan has an opportunity to embark on deeper economic reforms that could bring higher growth, employment opportunities and a sustainable future. But he has a big task.

Three private roundtable meetings were convened in the first quarter of 2019, with the aim of generating informed and constructive new thinking on policy options and reforms that could help Sudan build a more economically prosperous, stable and inclusive nation. The roundtables were held under the Chatham House Rule.

The project sought to offer a neutral space for discussion to policymakers and influencers from a broad range of backgrounds: Sudanese government officials, opposition figures, economists, experts on Sudan’s political economy and governance, civil society figures, representatives of international financial institutions, and other international policymakers.

This paper draws together the key themes and findings from each of the three roundtables, ranging from broad structural economic issues to sector-specific priority interventions. It presents options and recommendations for Sudanese leaders, including the transitional government, in support of building a more economically prosperous, peaceful and inclusive nation.

The transition of power in Oman from the deceased Sultan Qaboos to his cousin and the country’s new ruler, Sultan Haitham bin Tariq, has been smooth and quick, but the new sultan will soon find that he has a task in shoring up the country’s economic position.

Above all, the fiscal and debt profile of the country requires careful management. Fiscal discipline was rare for Oman even during the oil price spike of the 2000s. Although oil prices only collapsed in 2014, Oman has been registering a fiscal deficit since 2010, reaching a 20.6 per cent high in 2016. As long as fiscal deficits remain elevated, so will Oman’s need to finance those deficits, predominately by borrowing in the local and international market.

Oman’s Debt-to-GDP ratio has been rising at a worrying pace, from 4.9 per cent in 2014 to an IMF-estimated 59.8 per cent in 2019. By 2024, the IMF is forecasting the ratio to reach nearly 77 per cent. A study by the World Bank found that if the debt-to-GDP ratio in emerging markets exceeds 64 per cent for an extended period, it slows economic growth by as much as 2 per cent each year.

Investors are willing to lend to Oman, but the sultanate is paying for it in terms of higher spreads due to the underlying risk markets are placing on the rising debt profile of the country. For instance, Oman has a higher sovereign debt rating than Bahrain yet markets perceive it to be of higher risk, making it costlier to borrow. Failure to address the fiscal and debt situation also risks creating pressure on the country’s pegged currency.

If oil revenues remain low, Sultan Haitham will have to craft a daring strategy of diversification and private sector growth. He is well placed for this: Sultan Haitham headed Oman’s Vision 2040, which set out the country’s future development plans and aspirations, the first Gulf country to embark on such an assessment. However, like all vision documents in the Gulf, Oman’s challenge will be implementation.

In the age of climate change, renewable energy is a serious economic opportunity, which Oman has to keep pursuing. If cheap electricity is generated it could also be exported to other Gulf states and to south Asia. In Oman, the share of renewables in total electricity capacity was around 0.5 per cent in 2018; the ambition is to reach 10 per cent by 2025.

However, in order to reach this target, Oman would have to take additional measures such as enhancing its regulatory framework, introducing a transparent and gradual energy market pricing policy and integrating all stakeholders, including the private sector, into a wider national strategy.

Mining could provide another economic opportunity for Oman’s diversification efforts, with help from a more robust mining law passed last year. The country has large deposits of metals and industrial minerals and its mountains could have gold, palladium, zinc, rare earths and manganese.

Oman’s strategic location connecting the Gulf and Indian Ocean with east Africa and the Red Sea could also boost the country’s economy. The Duqm special economic zone, which is among the largest in the world, could become the commercial thread between Oman, south Asia and China’s ‘Belt and Road Initiative.’

Oman has taken important steps to make its economy more competitive and conducive to foreign direct investment. Incentives include a five-year renewable tax holiday, subsidized plant facilities and utilities, and custom duties relief on equipment and raw materials for the first 10 years of a firm’s operation in Oman.

A private sector economic model that embraces small- and medium-sized enterprises as well as greater competition and entrepreneurship would help increase opportunities in Oman. Like all other Gulf economies, future employment in Oman will have to be driven be the private sector, as there is little space left to grow the public sector.

Privatization needs to continue. Last year’s successful sale of 49 per cent of the electricity transmission company to China’s State Grid is a very positive step. The electricity distribution company as well as Oman Oil are next in line for some form of partial privatization.

The next decade will require Oman to be even more adept in its competitiveness as the region itself tries to find its new bearings. Take tourism for instance; Oman hopes to double its contribution to GDP from around 3 per cent today to 6 per cent by 2040 and the industry is expected to generate half a million jobs by then. Over the next 20 years, Oman will most likely be facing stiff competition in this area not only by the UAE but by Saudi Arabia as well.

The new sultan has an opportunity to embark on deeper economic reforms that could bring higher growth, employment opportunities and a sustainable future. But he has a big task.

Belarus’s parliamentary elections, held on 17 November, were predictably non-transparent, with numerous violations. The regime of Alexander Lukasheka allowed no opposition candidates as members of parliament – in contrast to the previous parliament, in which there were two opposition MPs. While this might seem to be a return to ‘business as usual’, three key takeaways from the elections highlight a shifting political and social landscape.

1. Lukashenka is appeasing his ruling cadre by promising to increase their role in the political system.

With several influential officials becoming new MPs, it is more likely that parliament will be more involved in any forthcoming discussion of a new constitution. Lukashenka has been promising constitutional reform for several years; he has said publicly that it will lead to an increased significance of government agencies as well as parliament. The aim of this is to keep them more engaged and on Lukashenka’s side.

In terms of the composition of the new parliament itself, there are some key differences with previous years. It is no longer a comfortable place for officials to while away their pre-retirement: many MPs are now in their fifties or younger, and have plans for careers beyond parliament.

It also looks as if small steps are being taken towards the emergence of a party system in Belarus. The leader of Belaya Rus, a pro-government association of Belarusian officials, got a seat in parliament for the first time, increasing the likelihood of it becoming a political party. The number of MPs from different parties has increased to 21 (out of 110 in total). Although these still all broadly support Lukashenka, they can differ from the president in policy positions. For example, the Labour and Justice Party, with 6 seats in parliament, supported the annexation of Crimea in 2014. Change, of course, may not necessarily be in a pro-Western direction.

Moreover, the newly elected members of parliament look more like real politicians. They go to debates, speak to independent journalists and have their own social media channels. Some have even felt able to criticize the actions of the authorities.

Similar changes have been taking place in other institutions in Belarus. The government is now more competent than it has ever been. The National Bank has managed to carry out macroeconomic stabilization on one of the most unstable currencies in Europe, while the ministries responsible for the economic development have implemented certain small-scale reforms. The Minister of the Interior has even acknowledged mistakes made by his department (under his predecessor), and undertaken to make improvements.

This has resulted in a near-comical situation, whereby the Belarusian non-state media outlets have an increasingly positive view of some state officials, such as Prime Minister Siarhei Rumas, while the state media has been scaling back its coverage of him to ensure he does not become too popular.

2. Belarus has less need for the West and is reluctant to make even small concessions.

Since the slight warming of Belarusian relations with the West in 2014, Lukashenka has been having more meetings with prominent Western officials. Western institutions began trying to cooperate more closely with Belarus, but soon saw that it was not very interested. In 2018, the European Bank of Reconstruction and Development allocated €360 million to Belarus. However, it is now considering a reduction, as reforms in Belarus have not, in its view, gone far enough. The European Union has also committed considerable time and money to regional authorities, but this has not brought any significant changes to Belarusian local government.

The absence of opposition candidates also demonstrates that the Belarusian authorities are prepared for a new deterioration of relations with the West. The authorities could certainly have afforded some opposition in parliament, especially since they themselves choose whom to appoint. Given that they did not, they either do not consider worsened relations a problem or are confident that the West will continue to cooperate with Belarus in order to limit Russian power, regardless of its violations of the rule of law.

3. There is growing popular dissatisfaction with the current regime, but the state has no good plan for how to deal with it.

Parliamentary election campaigns in Belarus are traditionally low-key, but this year they were particularly muted. The authorities tried to ensure that people knew as little about the election as possible. Campaign posters appeared on the streets just two weeks before polling day. It seems the authorities were reluctant to politicize society, as further resentment at autocratic rule is brewing.

Many Belarusians who previously supported Lukashenka now have a very critical opinion of him. Take political blogging: the most popular political blogger in Belarus is a 22-year-old man who goes by the name of NEXTA. He produces low-quality videos which are highly critical of the authorities. A film by him about Lukashenka, released a month ago, has already received 1.8 million views, even though there are only 9.5 million people in Belarus.

The authorities are not in a concessionary mood. The presidential elections in 2020 will also likely be a sham. If the authorities’ grip over the country is weakened, they will fear an outbreak of anger, resulting in widespread protests which the regime might once again have to meet with violence.

Belarus’s parliamentary elections, held on 17 November, were predictably non-transparent, with numerous violations. The regime of Alexander Lukasheka allowed no opposition candidates as members of parliament – in contrast to the previous parliament, in which there were two opposition MPs. While this might seem to be a return to ‘business as usual’, three key takeaways from the elections highlight a shifting political and social landscape.

1. Lukashenka is appeasing his ruling cadre by promising to increase their role in the political system.

With several influential officials becoming new MPs, it is more likely that parliament will be more involved in any forthcoming discussion of a new constitution. Lukashenka has been promising constitutional reform for several years; he has said publicly that it will lead to an increased significance of government agencies as well as parliament. The aim of this is to keep them more engaged and on Lukashenka’s side.

In terms of the composition of the new parliament itself, there are some key differences with previous years. It is no longer a comfortable place for officials to while away their pre-retirement: many MPs are now in their fifties or younger, and have plans for careers beyond parliament.

It also looks as if small steps are being taken towards the emergence of a party system in Belarus. The leader of Belaya Rus, a pro-government association of Belarusian officials, got a seat in parliament for the first time, increasing the likelihood of it becoming a political party. The number of MPs from different parties has increased to 21 (out of 110 in total). Although these still all broadly support Lukashenka, they can differ from the president in policy positions. For example, the Labour and Justice Party, with 6 seats in parliament, supported the annexation of Crimea in 2014. Change, of course, may not necessarily be in a pro-Western direction.

Moreover, the newly elected members of parliament look more like real politicians. They go to debates, speak to independent journalists and have their own social media channels. Some have even felt able to criticize the actions of the authorities.

Similar changes have been taking place in other institutions in Belarus. The government is now more competent than it has ever been. The National Bank has managed to carry out macroeconomic stabilization on one of the most unstable currencies in Europe, while the ministries responsible for the economic development have implemented certain small-scale reforms. The Minister of the Interior has even acknowledged mistakes made by his department (under his predecessor), and undertaken to make improvements.

This has resulted in a near-comical situation, whereby the Belarusian non-state media outlets have an increasingly positive view of some state officials, such as Prime Minister Siarhei Rumas, while the state media has been scaling back its coverage of him to ensure he does not become too popular.

2. Belarus has less need for the West and is reluctant to make even small concessions.

Since the slight warming of Belarusian relations with the West in 2014, Lukashenka has been having more meetings with prominent Western officials. Western institutions began trying to cooperate more closely with Belarus, but soon saw that it was not very interested. In 2018, the European Bank of Reconstruction and Development allocated €360 million to Belarus. However, it is now considering a reduction, as reforms in Belarus have not, in its view, gone far enough. The European Union has also committed considerable time and money to regional authorities, but this has not brought any significant changes to Belarusian local government.

The absence of opposition candidates also demonstrates that the Belarusian authorities are prepared for a new deterioration of relations with the West. The authorities could certainly have afforded some opposition in parliament, especially since they themselves choose whom to appoint. Given that they did not, they either do not consider worsened relations a problem or are confident that the West will continue to cooperate with Belarus in order to limit Russian power, regardless of its violations of the rule of law.

3. There is growing popular dissatisfaction with the current regime, but the state has no good plan for how to deal with it.

Parliamentary election campaigns in Belarus are traditionally low-key, but this year they were particularly muted. The authorities tried to ensure that people knew as little about the election as possible. Campaign posters appeared on the streets just two weeks before polling day. It seems the authorities were reluctant to politicize society, as further resentment at autocratic rule is brewing.

Many Belarusians who previously supported Lukashenka now have a very critical opinion of him. Take political blogging: the most popular political blogger in Belarus is a 22-year-old man who goes by the name of NEXTA. He produces low-quality videos which are highly critical of the authorities. A film by him about Lukashenka, released a month ago, has already received 1.8 million views, even though there are only 9.5 million people in Belarus.

The authorities are not in a concessionary mood. The presidential elections in 2020 will also likely be a sham. If the authorities’ grip over the country is weakened, they will fear an outbreak of anger, resulting in widespread protests which the regime might once again have to meet with violence.

This event is part of a series of illegal logging update meetings that will bring together more than 250 participants from civil society, industry and governments from around the world. 

Download the presentations from the event on the Illegal Logging Portal.