A special committee of the Shura Council for studying the effects of lower oil prices has recommended the merger a number of ministries and government bodies as well as an end to honorary supervisory positions in government institutions. The move comes amid a slide in oil prices that has seen state revenues plummet.
According to a statement issued by the committee, it has called for the lifting of subsidies given to government-owned companies as well as applying zero-based budgeting, in which all expenses must be justified for each new period, and every function within the organisation is analysed for its needs and costs.
Tawfiq Al Lawati, the head of the Shura Council committee, told Gulf News that merging ministries and authorities will save the state’s coffers millions of rials as well as simplify official procedures, and raise productivity.
Al Lawati added that the Omani government should rationalise spending under such exceptional economic conditions and Omani nationals should also be ready to make sacrifices to help the government in these tough times.
The committee has called for the consolidation of the government’s work by downsizing through mergers. It has made at least eight merger recommendations affecting at least 17 ministries and government authorities, and called for the establishment of new bodies and ministries to replace old ones.
It is not clear how the move is expected to affect the government workforce and the jobs of ministers whose offices may be made redundant. As in neighbouring Gulf countries, a large number of Omanis rely on the bloated public sector for employment. Following the protests of 2011, Oman’s Sultan Qaboos promised 50,000 new jobs for Omanis in the public sector, raised the minimum wage and promised to fight corruption. Experts have said that given the population growth, the Sultanate needs to create about 50,000 jobs annually to reduce unemployment, estimated at 15 per cent, from rising any further.
The budget for 2016 projects 3.3 billion Omani rials (Dh31.48 billion) in deficit, which the government says it will try to reduce by improving the non-oil revenues as well as cutting expenditure. Oman posted a budget deficit of 4.5 billion rials in 2015, as revenues declined by more than 50 per cent.
Last month, the financial affairs and energy resources council said Oman has posted a deficit of 1.6 billion rials in the first month of 2016, due to the slide in the oil prices. The council recommended reviewing non-oil revenues as well as rationalising the expenditures.
Oman has more than 60 ministries, public authorities and government’s companies.