Steady progress
H E Ahmed bin Abdulnabi Macki, the Minister for National Economy shares his thoughts on bilateral relations, the economic crisis and Oman’s response in an exclusive interview with our guest editor, H E Anil Wadhwa

India and Oman share centuries old social and economic relations? How have these relations been strengthened during recent times?
Oman and India have distinguished historical, cultural and commercial relations, which have deep roots since a long time. These relations are continuously growing over time and can be traced in the growth of bilateral trade relations in recent years through the genuine interest of both countries to create regulated economic and commercial frameworks to improve, reinforce and foster cooperation between the two countries.

Through the meetings being held between the joint commission of the two countries various areas of cooperation have been dealt with, and many bilateral agreements have been signed between the two countries covering investment, taxation, and technical assistance. India is also a major trade partner for Oman. To boost trade relations, GCC states have started negotiations with India for concluding a Free Trade Agreement (FTA) for the best interest of GCC countries and India. Both countries are exerting more efforts to strengthen their bilateral relations in various fields, such as trade, industry and commercial services.

What are the areas in which India can contribute to the development of the Sultanate of Oman?
The governments of the two countries are doing their best to enter into joint ventures. Many projects have been established, such as the Oman-Indian fertilizer project, and others. Recent developments in the bilateral relations signify noticeable cooperation. For example, Oman and India are in the final stages of setting up a fund to be utilised for the development of infrastructure projects in both countries. Oman and India have signed two memorandums of understanding (MQU’s), one is concerned with bilateral investment, and the other is to boost manpower cooperation. These agreements and memorandums will encourage the private sectors in both countries to cooperate in promoting education, vocational training, as well as mutual cooperation in information technology (IT), health services, and telecommunication.

How can the two countries work together in promoting enhanced stability and security in the region?
Oman and India are members in United Nations, as well as other regional organisations concerned with socio-economic development, promoting collective efforts to maintain peace, stability, and security worldwide. So, Oman and India have special concerns as regards promoting and preserving stability, and they are doing their best to safeguard security in the region.

The Sultanate has pursued a path of consistent economic growth? What has been the guiding philosophy behind this model of development?
Since 1970 Oman adopted a free market economy, based on a planned approach combining both the economic and social aspects, and focusing on regional and sectoral development. The successive plans have adopted objectives, policies and mechanisms aiming at achieving growth, to transform the economy from a traditional one to a modern developed economy. The fundamental goals of the Omani economy, being the guidelines for all the development plans, necessitated a change in the government's role, shifting it from economic dominance to strategic guidance of an economy depending on stable balanced macro economic framework, a dynamic competitive private sector, skilled manpower, diversified productive base, and a high standard of living for the Omani citizens. So, the Sultanate is adopting an economic philosophy based on an indicative scientific planning approach leading for comprehensive development at both economic and social spheres.

Has the economic model of consistent yet steady progress enabled Oman to negotiate the international financial crisis in a better way?
Oman is safely overcoming the repercussions of the recent global financial and economic crisis, because of its sound financial position. This was possible due to the prudent fiscal and monetary policies being adopted, especially during the recent period of prosperity and strong economic growth. Part of oil revenue surpluses have been diverted to strengthen the reserves, and reduce public debt. This has also helped Oman to continue with the expansionary fiscal policy to stimulate growth and increase public spending. The Omani economy had a strong performance in 2008, as the gross domestic product (GDP) grew by 13 per cent at fixed prices, and 44 per cent at current prices, compared with 2007. The growth of liquidity and credit rates remained highly positive in the latter half of 2008, and the first quarter of 2009. Local demand indicators, net imports, and size of manpower in the private sector did not show any indications of recession. So, it can be said that the Omani economy has not been affected significantly by the financial markets. The Central Bank of Oman (CBO) attributes the immunity of Omani banks to their zero exposure to the toxic financial assets on one hand, and to CBO’s sound regulations on the other hand. Oman has always been prudent with its revenues and oil revenues for this year are based on an assumption of $45 per barrel. So, this year the budget is conservative, forecasting a deficit amounting to RO810mm, equivalent to five per cent of GDP. The economy is expected to register a one per cent growth in government expenditure, so as to, maintain sustained socio- economic development.

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