Oman’s ruler approves fiscal plan to diversify revenue

Sultan Haitham is seeking to reduce high levels of government debt and bring down state spending. (Reuters)
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Updated 23 October 2020

Oman’s ruler approves fiscal plan to diversify revenue

DUBAI: Oman’s sultan has approved a medium-term fiscal plan to make government finances sustainable, state media said on Thursday, as the coronavirus crisis and low oil prices batter state coffers.

The country has long had plans to reform its economy, diversify revenues and introduce sensitive tax and subsidies reform, but they dragged under the late Sultan Qaboos, who died in January after half a century in power.

His successor, Sultan Haitham, approved a 2020-2024 fiscal plan that included increasing government income from non-oil sectors, state media reported, citing orders from the Sultan.

Oman will also accelerate the establishment of a social security system for low-income citizens who may be affected by the government’s drive to bring down the country’s debt and cut state spending, one of the orders said.

Haitham also ordered 371 million Omani rials ($964 million) of unspecified development projects to be carried out across the country.

Rated non-investment grade by all major credit agencies, Oman’s debt climbed to around 60 percent of gross domestic product at the end of 2019 from less than 5 percent five years earlier.

On Wednesday it raised $2 billion in its first international bond sale since July 2019.  People familiar with the plans had previously said Oman sought to raise between $3 billion and $4 billion in a three-part deal.

However, Oman scrapped a three-year tranche as it faces an aggressive debt repayment schedule between 2021 and 2023 and limited investor appetite for the offer, several bankers and fund managers said.

“Our estimate was that they wanted to do $3 billion. So I think the size might be a bit disappointing for them but I think they should be happier with the price,” Abdul Kadir Hussain, head of fixed income asset management at Arqaam Capital.

The country has begun preliminary discussions with some Gulf countries about financial support, according to a bond prospectus seen by Reuters. Bahrain, the only other “junk” rated Gulf country, averted a credit crunch in 2018 when it was bailed out with a $10 billion aid package from its wealthy neighbors.


Emirates stops flights to three major Australian cities

Updated 16 January 2021

Emirates stops flights to three major Australian cities

  • Flights to/from Sydney, Brisbane and Melbourne will be suspended until further notice: Emirates
  • The airline will still run two flights a week to Perth

DUBAI: Emirates has suspended flights to Australia's three largest cities as the country further restricts international arrivals over fears of new virus strains.
The Dubai-based carrier was one of the last to maintain routes into and out of the country's east coast throughout most of the pandemic but on Friday evening told travellers a handful of planned flights next week would be the last.
"Due to operational reasons, Emirates flights to/from Sydney, Brisbane and Melbourne will be suspended until further notice," Emirates said on its website.
The airline will still run two flights a week to Perth, but the cuts are another barrier for tens of thousands of stranded Australians still attempting to return home.
The Australian government responded by announcing more repatriation flights and said other carriers still flying services to the cities could fill the gap.
"The capacity that Emirates was able to use within the cap will be allocated to other airlines, ensuring that there are still as many tickets, as many seats available into Australia," Finance Minister Simon Birmingham said.
A small number of airlines - including Qatar Airways and Singapore Airlines - are still running services to Australia but local media were already reporting delays and cancellations among returning travellers.
Australia's borders have effectively been closed since March to curb the spread of the virus, with the government even limiting the number of citizens allowed to return.
Last week travel restrictions were further tightened, with arrival numbers slashed and all travellers into the country requiring a negative Covid-19 test before flying.
In making the changes, Prime Minister Scott Morrison cited a growing number of people in quarantine testing positive for new strains of Covid-19.
Fears that a variant of the virus from Britain, believed to be more contagious, had leaked into Brisbane from hotel quarantine triggered a snap lockdown in the city last week.
"There are many unknowns and uncertainties in relation to the new strain, and so that's why this precautionary approach, we believe, is very sensible," Morrison said.
Australia continues to deal relatively well with the virus, having recorded about 28,600 cases and 909 deaths linked to Covid-19 in a population of 25 million.