New Oman Crown Prince And Basic Law Works To End Political And Economic Uncertainty

Oman’s Sultan Haitham has declared an end to the former succession system created by the sultanate’s predecessor. The event’s announcements came on the anniversary of the leader’s succession, along with the proclamation of a new crown prince and Basic Law of the State, to allow for the modernization and transformation of the Gulf nation’s economic, political, and social structures.

The crown prince will be Sultan Haitham’s oldest son, Dhi Yazin bin Haitham, who was previously the country’s minister for culture, sports, and the youth. The change in the succession system presents more clarity for Oman’s future. Former Sultan Qaboos’s heir was ambiguously kept hidden from the country and royal family until after the leader’s death in 2020, and much of Qaboos’s final years were met with concern, as it was unknown whose hands the country would be placed in. Additionally, Dhi Yazin may offer promising future events for Oman in the economic department, a desperately needed guarantee after Oman has faced the worst economic plummet amongst the Arab countries since the COVID-19 pandemic has begun.

During Haitham’s succession anniversary, the leader announced in a speech that the new royal decree to be passed would allow for “a stable mechanism for the transfer of power in the sultanate.” This move has been approved by various business partners and analysts. Ubaldo Tripoli, a member of the global management consulting firm, Kearney, said: “…this strategic move strengthens confidence in the country and its progressive leadership … promising to accelerate the Sultanate’s progress towards becoming a globally competitive economy with effective governance. This, in turn, will improve the country’s credit ratings and provide it with long-term stability.”

These reviews on the economically driven moves made by Sultan Haitham greatly contrast with the previous year’s bond credit junk ratings – the low investment grade for the country, an indicator of Oman’s dwindling credit rating. According to Bloomberg, Oman has four hefty dollar bonds that will mature by 2021 and 2022. It is apparent that crucial steps must be made and taken by Haitham to fight the country’s debt. In 2020, one of the “Big Three” credit rating companies, Moody’s, spoke out about Haitham’s responses, saying he was “slow and fell short of stabilizing government debt levels.” However, the recent establishment of a crown prince is hoped to diminish uncertainty towards Oman’s future politics and leaders and allow more room for investments and economic growth.

The formation of a new succession system is not the only government renovation made by Haitham in recent times. In July of 2020, Haitham oversaw the abolishment of Oman’s labour law, which formerly required expatriates to obtain a No-Objection Certificate to receive permission from their employer if they wanted to switch their careers. Along with this, the recently passed Basic Law of the State grants “freedom of opinion and expression” to all citizens.

Oman has faced an oil crisis since 2014. The country is dependent on utilizing its oil and gas reservoirs to drive the economy. Ever since the beginning of the COVID-19 pandemic, global oil prices have dropped down, and the country has dealt with economic difficulties. Attempts have been made to secure local and international investors; however, debt continues to make up 60 per cent of Oman’s gross domestic product, according to AP News. The International Monetary Fund reported that in 2020, Oman’s economy should prepare for a ten per cent shrinkage, followed by being the only Gulf nation that would not see any economic growth in 2021. These predictions originally shaped the impending years, but after seeing the implementation of the crown prince and reshaping of decree guidelines, Oman may be able to counter these dreadful statistics.

As of now, Oman plans to implement a value-added tax law in April of this year. The news outlet, Arabian Business, believes the tax will help produce more than $780 million in 2021, which could greatly aid debt problems. The Arab country has avoided looking towards international financial assistance for quite some time, however, looking for additional aid from neighbouring countries will be critical to further counter debt and approaching bond maturity dates. There is hope for Oman to soften the blow of overwhelming charges during the country’s transitional political period.